To confront an emerging budget shortfall, the City of Portland will freeze most hiring, reclassifications, and discretionary overtime spending for the remainder of the current fiscal year, which began July 1. The freeze takes effect Oct. 1, with exceptions made for frontline public safety roles and other critical needs.
The decision follows a forecast from the City Budget Office projecting a significant gap in the General Fund—driven by a $12 million shortfall in Business License Tax revenue, unusually low year-end underspending, and the financial impact of a large legal settlement.
City Administrator Michael Jordan outlined the cost-saving measures in a Sept. 17 memo to city staff. “We want to be transparent about both the challenges and the steps we’re taking to address them responsibly,” Jordan wrote. “These temporary measures are designed to help us avoid more severe impacts later and ensure we can continue delivering the services our community depends on.”
The freeze will not affect recruitment already in progress, and hiring for critical public safety roles in police, fire, and 911 dispatch will continue. For all other roles and overtime use, an exception process is being implemented. Criteria for exceptions include compliance with Council directives, regulatory mandates, cost-avoidance concerns, critical services, or stable, non-General Fund revenue.
As of Sept. 5, Portland had 662 vacant positions, representing roughly 9% of its workforce. Of those, 137 are in frontline public safety roles. Freezing vacant positions—excluding those in police, fire, and 911—could save an estimated $6 million in General Fund spending and up to $20 million in other funds between October and June.
Citywide overtime costs in FY 2024–25 totaled $56.5 million, with $46.5 million incurred by police, fire, and BOEC. Public safety overtime spending has decreased slightly year over year, but other bureaus saw a 4% increase in overtime compared to the prior fiscal year.
The freeze on hiring, reclassifications, and discretionary overtime will remain in place until the FY 2026–27 budget is adopted or until the City determines the budget is stable enough to lift the restrictions. Updates on cost savings and workforce impacts will be presented to City Council in January.
City Council is scheduled to discuss the Fall Budget Technical Adjustment Ordinance during a work session on Oct. 22. A vote is expected at the Council meeting on Nov. 5. Agendas and meeting materials are available at Portland.gov/Council
