What’s happening with tax money meant for Portland area homeless services?

Voters in the Portland metro region passed a tax in 2020 to fund homeless services. But Multnomah County is far behind in spending the hundreds of millions of dollars that tax has generated. Clackamas and Washington counties also have unspent tax money. Now, the Metro regional government wants to divert some of those dollars to build more affordable housing. We’ll talk with Willamette Week reporter Nigel Jaquiss who’s been following the developments.

Note: This transcript was computer generated and edited by a volunteer.

Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. In 2020, voters in the Portland metro region passed a bond intended to significantly boost funding for homeless services. In some ways, it’s worked even better than intended. It’s raising hundreds of million dollars more than initially anticipated. But there’s a catch - a lot of that money is not being spent. Multnomah County, in particular, has been slow to get its money out the door. In response, Metro regional government leaders are suggesting a big shift. They want to use some of the unspent homeless services money to build more affordable housing instead. Nigel Jaquiss has been covering this issue as a reporter for Willamette Week, and he joins us now. It’s good to have you back on the show.

Nigel Jaquiss: Thanks for having me, Dave.

Miller: Let’s start with the basics here. How much homeless services money is the Multnomah County-run Joint Office of Homeless Services actually using?

Jaquiss: So far, through six months of this fiscal year, they’ve only spent about 22% of their allocation. That equates to about $40 million, and even among that $40 million, they spent $10 million in one chunk, writing a check to the United Way for what’s called capacity building. In essence, they’ve given money to the United Way to distribute it to dozens of nonprofits to hire more people and build more computer systems.

Miller: So about one out of every $5 has been spent. But that is, in some ways, an exaggeration of the impact of that small amount of money.

Jaquiss: That’s correct.

Miller: Can you remind us, what is this money supposed to be spent on? Four years ago - it was May of 2020 - voters said yes to this hundreds of millions of dollars a year in new taxes, especially for higher earning folks or corporations. What did we think we were going to be getting?

Jaquiss: The ballot measure calls for 75% of the money to be spent providing services to people who are chronically homeless. So those are the people that we see in RVs, we see sleeping under bridges, we see sleeping under blue tarps. And the idea would be to get that money on the street immediately and to help those people transition into housing.

Miller: This has been an issue for a couple of years now. There have been a lot of articles in Willamette Week and other papers about it. There have been audits about it. I should say that the other two metro region counties, Clackamas and Washington Counties, haven’t spent all the money that has been allotted either, but Multnomah County’s Joint Office is by far the lowest performing, in terms of spending this money. What are the challenges?

Jaquiss: I think what happened is that this money became available during the pandemic, initially, when, as you’ll recall, very few people were coming to work and where we saw a lot of people walk away from their jobs. These are social services jobs that don’t pay very well in the first place. They require workers to engage in some pretty traumatic work, working with people who have been chronically homeless. They have many, many challenges. So in short, it’s been difficult for the nonprofits who do most of this work, to attract and retain staff.

Miller: What has been done at the county level to change this? I mean, I remember we had the county chair, Jessica Vega Pederson on about a year ago or so, maybe less, when there were some really damning articles and she said, “Something’s going to change, we’re gonna figure this out.” One of the issues at the time was, as you said, pay. It’s been a while at this point. I mean, why haven’t things gotten better?

Jaquiss: Well, I think that there’s a real shortage of people who want to do this work. The county has said in a variety of ways that they’re gonna expedite getting money on the street, they’re gonna be more flexible in the way they contract, they’re gonna listen more to the nonprofits, but I just don’t think it’s happening.

At the same time, it’s fair to point out that the amount of money that the county anticipated to receive…we’ve seen much, much more money come in.

Miller: Why is that?

Jaquiss: Well, the economy has performed much better than economists expected in 2020. In the depths of the pandemic, people were very pessimistic about what a post-pandemic Portland and US would look like. But personal income, which is the biggest part of what pays for this tax, has far exceeded expectations. Also corporate profits, which are the other big part of this tax, have also exceeded expectations and they continue to do so despite the doom and gloom that we’ve read, the small loss of population. So we’ve really had the double whammy of nobody wants to work or nobody’s available to work, and a lot more money to spend.

Miller: And no kicker for this. We’re not talking about state budgeting, and so more money came in than expected and it is staying in the coffers.

Jaquiss: Yeah, and it is fair to note, as you alluded to earlier, Washington County, for instance, through the first six months of this year, spent 40% of its money. Clackamas County, which has been a reluctant partner in this whole enterprise, spent 25% of its money. So other people are getting money out the door.

And another thing that is worth thinking about is that we had a large homeless problem in this county long before this tax passed. We had a robust group of nonprofits that do this work. So there is capacity in the community, there’s knowledge in the community. We just haven’t been able to connect that knowledge with the money.

Miller: What exactly is Metro proposing? What would they do with this money? And we’ll get to what it would take for that to actually happen.

Jaquiss: Just to remind listeners that in 2018, Metro passed a Housing Bond, it raised $653 million. They’ve allocated pretty much all of that money now. They’ve actually built more units than they proposed to do. And they’re looking at the money that is flowing in. They administer the Homeless Services Tax. They’re seeing about $100 million a year more than was projected flowing in. And so they’ve said, look, we’ve still got a massive shortage of affordable housing in this community. Let’s bond against some of the excess revenue, if you will, the money that we didn’t anticipate getting, and let’s re-allocate that money instead of just sitting on it, which is what the counties are doing now. Let’s put it to work by building more affordable housing.

Miller: The county had a work session recently that you reported on. What did you hear from county leaders about this idea, including people like Sharon Meieran, who doesn’t really waste an opportunity to point out the ways that she thinks the chair is letting the county down? That’s the job that she wanted.

Jaquiss: Commissioner Meieran and Commissioner Julia Brim-Edwards, who’ve been vocal critics of the county’s slow spending of Joint Office money, both reacted pretty negatively to Metro’s idea. They both said, “This is our money, keep your hands off it,” in essence. So you do have a situation where the county is clearly failing to spend the money, yet the two biggest critics on the commission, Commissioners Meieran and Brim-Edwards, have said no to Metro.

Miller: I understand the Metro idea - that this money is not being spent, let’s put it to good use right now. But what is the argument for putting it to good use in a completely different way? I mean, surely there could be other ideas for speeding up the way this money could be spent on homeless services, but that’s not what they’re saying. They’re saying, “You’re not using this money on homeless services, let’s use it for something else.”

Jaquiss: Well, I think at the core of Metro’s idea is that what we’re really talking about here is homelessness. So if people are chronically homeless, let’s build more housing units - and you can build a lot of units with $100 million a year. I think they have now seen three years of evidence that the counties can’t keep pace with this revenue. And I think that they are also not sure that the counties are ever going to catch up with it. So why not try something that does address the root issue here, which is homelessness?

Miller: Does it matter that county leaders don’t like this idea? I mean, is this completely up to voters?

Jaquiss: Well, what’s happened is, on March first there was a group of all the interested stakeholders who came together to start talking about this. Metro has made it clear that their idea would be to go to the November ballot and ask voters, who are actually paying for this - it’s not the county’s money, this money belongs to voters, it comes from voters. The idea would be to go to the ballot in November and ask voters what they think.

Does it matter that the county doesn’t like it? I’m not sure that it does. I think Multnomah County’s political capital is at a pretty low level right now with voters. So if Metro can make a compelling case that they can do a better job of allocating this money, I think there’s a reasonable chance that they could convince voters of that.

Miller: You know, it’s interesting…I’m curious about your memory of this, because for years now, there’s been a kind of debate which a lot of people who are deep in the homelessness response world say is an artificial debate. It’s been about permanent housing, affordable housing, or emergency versions of housing.

To me, this is a slightly different version of that. It’s services versus housing. But I can’t think of a time when voters themselves have been asked this question: Should we take money that you’ve already approved, and shift it from one way to address this overall emergency to another? Am I wrong there? I mean, will this be the first time that voters will have that sort of stark decision?

Jaquiss: It’s the first time certainly in my recollection. Yes. I mean, you and I know that the usual issue with government services, that the government says, “we don’t have enough money to do the job we want to do.” So this is a very different construct where the government is essentially saying “we have more money than we can deploy, let’s try another idea.”

Miller: Nigel, thanks very much.

Jaquiss: Thank you.

Miller: Nigel Jaquiss a reporter for Willamette Week.

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