The budget knife, once again, is about to turn inward.
Remember this spring when the Portland City Council was cheering its good budget fortunes, for the first time in several years, with the mayor ladling out millions in cash for well-intentioned projects? The good times appear to be coming to a very quick end.

According to a draft budget memo obtained by the Mercury—and also according to a statement from Randy Leonard during this morning city council's meeting that stunned some city hall staffers—most city bureaus that draw from Portland's general fund are being asked to draw up plans for cuts as deep as 8 percent. (They're also being asked to plan for cuts of 4 percent and 6 percent—giving council some flexibility next budget season.)

That could affect fire station operations, police staffing, mental health programs, parks hours, housing inspectors, city support staff, etc. Really unpleasant stuff.

What's more, according to the memo: Bureaus may not be allowed to ask for any new funding for any new programs. It's underlined. They will not be considered. Unless, that is, there are cuts made to pay for them. Exceptions will be made for current programs that get funded every year with "one-time" money.

So what went wrong so fast? The memo makes some points. For one thing, finance officials have all along warned the city that the recent multimillion-dollar budget surplus was ephemeral. Some $9 million was socked away for a rainy day fund, and it's a good thing it was. State and federal cuts will limit funding for some city programs. The threat of a local recession looms—cutting previous projections for business license tax revenues. Inflation could bump up employee salaries. And a possible library levy on the county ballot next year could cut $5 million to $6 million from the city's general fund.

Leonard made his statement during discussion of whether the city should pony up $41,000 to help Multnomah County pay for two advocates for domestic violence victims at the city/county Gateway center. That's a big priority for Commissioner Dan Saltzman, and it was a lovefest until Leonard spoke up to warn that as many as three fire stations could close, under a preliminary scenario of worst case cuts to the fire bureau.

Some city hall types didn't see this coming. The mayor seemed disturbed to have the news emerge without his sanction. Asked outside the council chambers during a break, Nick Fish said "I've known for some time."

Fish went through the same list of factors mentioned in the budget memo. But he also said the picture would become more clear later this fall and next spring, after the city's regularly scheduled budget updates.

"Prepare for the worst," Fish said, "but hope for the best."