Portland City Administrator Michael Jordan, second from right, listens to public testimony concerning his potential re-appointment during a City Council meeting, Feb. 5, 2025, Portland, Ore. Jordan outlined the city's budget situation in a meeting Feb. 28, 2025.
Anna Lueck for OPB
Portlanders got a first look Friday at the potential budget cuts needed to close an estimated $93 million budget gap this year. From slashing nearly 100 transportation jobs to cutting parks programs and community centers, programs in nearly all city departments are on the chopping block.
“There aren’t really any good choices here,” said City Administrator Michael Jordan at a press briefing. “It’s about where you will find the money to balance the budget.”
Jordan unveiled an updated estimate of Portland’s budget woes Friday — along with potential ways to cut costs — ahead of Mayor Keith Wilson’s draft budget proposal in May.
The report brings some good news: The city has walked back last month’s prediction of a $100 million budget hole to an estimated $93 million. That gap in its general fund is based on several factors: inflation, expiring pandemic-era federal funds, increasing healthcare costs, overtime costs in police and fire bureaus, and spending tied to public labor union contracts. Property and business tax payments, which make up 75% of city revenue, have also plummeted in recent years as office vacancies have increased. This gap also includes $40 million in new costs that remain unfunded, like Mayor Keith Wilson’s $28 million homeless shelter proposal, a $1.7 million plan to expand Portland Street Response staffing, and other programs.
This shortfall reflects just a piece of the city’s budget concerns, however.
The $93 million gap is specific to the city’s discretionary fund, which comes from property and business taxes, license fees and revenue from other governments, which make up about 10% of the city’s budget. The city’s current $8.2 billion budget relies on about $732 million in discretionary general funds. The general fund pays for parks, police, homeless services and other critical services and is discretionary, meaning there is some wiggle room in how politicians spend.
The other 90% of the budget is non-discretionary funding, made up of federal and state grants, utility fees, contracts and other revenues that have to be spent on specific services. For instance, water and sewer bill revenues must be spent on water and sewer operations. According to Jordan, the city is facing a separate $84 million gap in its non-discretionary fund, due to declining permitting fees, parking registration fees and utility revenues.
To balance the general fund gap, Jordan suggests cutting $22 million from the transportation bureau’s street maintenance and repair programs, slashing $19 million in parks services by reducing community center hours and eliminating summer programs, and eliminating nearly 300 jobs across all city bureaus. The proposal also suggests using at least $19 million in revenue from the Portland Clean Energy Fund, the tax on large retailers meant to fund renewable energy projects, to help fill some of the shortfall.
PCEF played a similar role in the current year’s budget. Facing a $70 million deficit, then-Mayor Ted Wheeler decided to use revenue from the energy fund to patch its budget hole. Yet the decision was met with skepticism from some PCEF advocates who felt the funds were misused.
Jordan’s proposal also includes a number of budget cuts he identifies as “not recommended.” That includes nearly $40 million in cuts to police, fire, Portland Street Response, and the 911 call center – cuts that public safety unions and advocates have lobbied against in recent weeks. Jordan also discourages $640,000 in cuts to the city’s programs that remove homeless encampments, graffiti and trash in public spaces. Jordan said these proposed cuts can still be considered by the mayor or city council and included in the final budget.
“We just didn’t recommend the [cuts] because we’re pretty sure that most people in Portland want to maintain public safety,” said Jordan. “But there’s still a [budget] gap. And part of the way to fill that gap might be a discussion about public safety.”
Even if all of Jordan’s proposals – the recommended and not-recommended ones - were adopted, city council and Mayor Wilson would need to find around $60 million, or make more cuts, to fill the budget shortfall.
Jordan called the proposal package a “starting point” for more budget adjustments. That includes potentially restructuring the new structure of city administration, which breaks bureau oversight into six departments. On Friday, Jordan confirmed that the city is considering dissolving at least one of those departments called Vibrant Communities – which oversees the parks and arts bureaus. Jordan is also working with bureaus to potentially cut internal administrative jobs – like communications, human resources, equity, budgeting – to save money. Those cuts might not come until future budget years, however.
“We’re at a moment in time where we’re going through a transition in government,” Jordan said. “These discussions are ongoing.”
While some of the city’s budget shortfall comes from expiring federal pandemic relief funding, it doesn’t reflect any potential cuts to federal funding under the new presidential administration. Jordan said that’s because it’s too much of an unknown factor.
“Trying to predict how those things will go is just a fool’s errand, I think,” said Jordan. “However, we do recognize, given the atmospherics at the federal level, that we run some risks there. And so we’re certainly considering that.”
City council members are beginning to react to the news. In a statement emailed to OPB, Councilor Steve Novick wrote, “Although nobody wants to cut any of those things, the math is unavoidable.”
Council President Elana Pirtle-Guiney pledged transparency in the budgeting process.
“Even as we have to make difficult decisions, our choices should leave the city stronger for years to come,” she told OPB over email. “Responsible budgeting means centering the long-term impacts and staying future-focused for a better Portland.”
Councilor Eric Zimmerman, who chairs the city’s Finance Committee, is already proposing adjustments. He pointed to the proposal’s reference of more than $500 million extra in clean energy fund revenues.
“I am alarmed that PCEF has a half billion dollar contingency fund line item in the same budget document that proposes cuts,” Zimmerman said. “We don’t have a budget problem, we have a priorities problems.”
Portland’s budget process looks a little different this year. The voter-approved changes to city government that went into effect last month restructured the city’s bureau management, placing a new city administrator in charge of all departments and their budgets. In the past, bureau oversight was divided up among elected city council members, who would be responsible for submitting budget proposals. Those proposals – along with public feedback at town halls and in other forums – would inform the mayor’s proposed budget, which would need city council approval to go into effect.
Under the new government, budget recommendations are coming straight from the city administrator’s office, and they’re far more fluid.
“When we had gone to the public in the past, it was already cooked, it was already balanced,” said Jordan. “We’ve decided this year that we’re gonna go to the public with the kind of tipping point questions that we would really like their feedback on. What’s most important to you? If we have to cut a budget, which one would you cut?”
Like in the past, the mayor will be responsible for drafting a final balanced budget, and that will need council approval to go into effect. Wilson is scheduled to release his proposed budget on May 1.
Wilson said, in writing his first budget as mayor, he’ll be focused on several top priorities.
“I will be guided by the issues I was elected to address—ending unsheltered homelessness, restoring public safety, promoting green leadership, and reviving our local economy—while ensuring the voices of Portlanders are included in this process,” he said.
Members of the public will be able to give feedback on the budget recommendations and proposed cuts at a number of public meetings scheduled over the next two months.
