Although city revenues are growing at a record pace, the Portland City Council has authorized so much unfunded spending recently that it must either cut $4 million in ongoing programs or raise that much more to balance the budget over the next five years.
Although city revenues are growing at a record pace, the Portland City Council has approved so much new unfunded spending recently, it must either cut $4 million in ongoing programs or raise that much more to balance the budget over the next five years.
That is the conclusion of the General Fund Forecast for the next five year released late Friday by the City Budget Office. It predicts that revenues will continue to increase because of the improving economy, but not enough to pay for all the new programs the council has recently authorized in a flurry of end-of-the-year votes.
"Absent other policy decisions, we estimate the City would have had $8.3 million in additional ongoing resources in FY 2017-18," the forecast says.
But, according to the forecast, "over the last few months the City has pledged $12.3 million in additional ongoing spending beginning next year that has not been offset with other reductions. As a result, the City will need to cut $4 million in ongoing programs to balance the five-year forecast."
The forecast says the additional unfunded spending commitments include:
• $6.6 million for a new contract with the Portland Police Association approved in October once it is fully implemented.
• A $3.5 million increase in the Portland Housing Bureau's intergovernmental agreement with Multnomah County to provide homeless services.
• $1.2 million for a new public campaign financing program approved by the council this week.
• Although not an appropriation, $1 million in reduced revenues from fee waivers to support affordable housing in a new Inclusion Housing program expected to be approved next week.
• $2 million for other, relatively small changes.
In contrast, the council only increased anticipated revenue above projected growth levels by $1.5 million by phasing in a business income tax surcharge on companies which pay their CEO's more than 100 times the median wage of their workers.
The forecast says the potential $4 million gap is largely a result of Portland's popularity.
"Many of the problems facing the City — high housing prices and speculative real estate investment, homelessness and economic displacement — are a byproduct of this robust growth," the forecast says.
The forecast also found the city will have an addition $18.8 million in one-time revenues not availalbe for existing programs or the fiscal year 2017-2018 budget that begins on July 1, 2017.
You can read the forecast at here.