There are some very obvious reasons why Portland is facing what’s been put at (for now) a $25 million budget deficit. One of them is the new county library district, which the city estimates will cost $10 million because of property tax compression. Another is the yet-to-be finalized federal settlement with the Portland Police Bureau over its use of force, expected to cost close to $5 million.
Others, meanwhile, are entirely subtle—but very revealing about the difficult predicament the city finds itself in after years of cuts. A chart from the City Budget Office, requested by the Mercury, points out one of those factors: something called (get ready for some wonkiness) “city bureau underspending.”
To tread water while losing millions every year, city bureaus have spending more of their allotted piles of cash year, eating into cushions of money meant to keep them out of the red in the case of unexpected catastrophes or sudden bursts of overtime (like what the police bureau got itself into during Occupy Portland). City economists used to count on rolling over a certain amount of that leftover cash. They’re now counting on it less and less.
The current year could be even worse, thanks, in part, to a budget solution crafted by former Mayor Sam Adams. To scare up $2 million\, Adams and the city council told bureaus that they had to immediately hand back money they saved whenever a job went vacant during the course of the year. Those savings normally would help fill a bureau’s end-of-year cash cushion and help make next year’s budget not so bad. No longer. Adams’ plan, essentially, borrowed against it. Which could make that sharp downward slope in the chart all the worse.
Actually, no, I don’t understand why there is still a budget shortfall. Hasn’t the economy, and thus tax revenue, been improving for the last several years? How many years of economic growth are needed before there are no more budget shortfalls? 5? 10?
Most of the budget deficit is from costs that should have been covered with over sources of taxes but weren’t so Hales plan is just to cut until a bottom line is reached.
Neither the police plan or the library costs really should be coming from the general fund. Sam Adams was going to equalize taxation of cable companies to pay for the police reforms (unavoidable, and needed to happen) and supporting libraries are good but you can’t pay for them by shutting down fire stations and homeless shelters.
Ultimately, the issue is that the city needs more revenue of some form and Sam Adams was taking out of the cushion not to push cuts in the middle of a recession. (probably, the smart thing to do) However, Hales is a conservative and rather than figure out the tax situation, he is just going to cut basic services.
Ultimately, I think Portland is lurching to the right again and while there is wealth in this city, it certainly is going to be a ugly couple of years.