In an early disclosure practically unheard of during past administrations, Mayor Charlie Hales this morning has tipped his budget cards a bit—revealing that Portland's presumed $25 million budget deficit may actually drop to $21.5 million.

Hales' office sent out a statement describing the mayor as "cautiously pleased" about the update, which also suggests the city might even squeeze out a modest amount of one-time money—$800,000—the city can use for projects like helping the police bureau avoid laying off newly hired—and actually diverse—cops.

Bureaus had been told to whack 10 percent from their budgets, a $38 million cut, more than the city's deficit, and then duke it out with the public and the city council over the remaining $13 million in scraps. An extra $3.5 million to work with, plus the one-time money, could help blunt proposed cuts like closed fire stations, closed women's shelters, and closed community centers.

“While the budget preview is good news, the city still faces a shortfall and we still cannot use deficit funding,” Hales said in prepared remarks. “The new projection, if accurate, softens the impacts of the decisions we face.”

Deficit updates used to be something of a state secret in city hall. That began to change last year when Commissioner Dan Saltzman pushed a rules change that requires the city to publicly release new numbers every year by December 31 and April 30. Former Mayor Sam Adams had a reputation for holding onto the spring number—the one the city officially builds its budget around, and a potential game-changer in budget negotiations—until the last possible moment. The council typically approves a budget in May.

In the city's statement, economist Josh Harwood and city budget director Andrew Scott both say things might still shift before the end of the month. A few things changed, according to Harwood's staff:

• The consumer price index for the area—AKA inflation—came in lower than forecasted

• Health care premium costs came in lower than expected.

• Property values, for tax purposes, are up.

• "Compression"—the tax-limiting system voters approved in the 1990s, which forces governments to squabble over the division of a finite pie of property taxes—may not cause as much pain next year as previously expected. Early forecasts had the city facing a $10 million hit because of Multnomah County's voter-approved library district. Harwood tells the Mercury the budget office is now writing in $9 million, with the caveat that the increase in property tax values still leaves a lot of uncertainty.

“This is just a step in the process,” Scott said, also in prepared remarks. “The full forecast, including that of the volatile business licenses tax, will be released at the end of the month.”