In the midst of an unprecedented crisis, Mayor Ted Wheeler has proposed an equally unprecedented annual city budget.
"This is unlike any budget I’ve ever produced," said Wheeler in a morning press conference. "But, here’s the thing: Some structures that existed before need to be challenged. There's deep inequity in our society and it's only been exacerbated by COVID-19."
The proposed $5.52 billion price tag for fiscal year 2020-2021, which begins on July 1, is a 5 percent reduction from the 2019-2020 budget.
Wheeler, who's responsible for drafting an annual budget that Portland City Council will eventually approve, has proposed a budget that attempts to fill an unexpected $75 million shortfall due to revenue loss tied to COVID-19. The majority of the budget gap—$59 million—was pulled from emergency reserves, funding expected not to be spent in the current fiscal year, and other savings.
The rest of the funding gap will come from $29 million in cuts.
In April, Wheeler announced that the 1,700 city employees who do not have union representation would be facing wage freezes (including cost-of-living increases) and a series of unpaid days off to stem the financial impact of COVID-19 on city finances. In particular, any of these non-represented employees making between $61,000 and $87,900 must take five furlough days before the fall. Those making over $87,900 must take ten furlough days. Wheeler has offered to waive his salary for the remainder of 2020.
The city is now negotiating with the nine unions that represent the remaining 4,600 city employees to have all city workers adhere to the same wage freezes and furlough plans.
If they do, the city could close $9 million of that budget gap. If unions refuse to allow their members to follow furlough orders and pay freezes, the city will have to make 9 million dollars worth of layoffs. Those conversations with union leaders are currently underway, and Wheeler says he hopes they'll be resolved by June 10, the day City Council is scheduled to approve the final budget.
Wheeler has also filled the budget shortfall by slimming the city's overall budget for material and services costs, and cutting funding used to account for inflation on purchases.
He's also proposed some direct program cut. The draft eliminates the Portland Police Bureau's (PPB) pending $1.8 million body camera pilot program and $2 million to replace PPB's records management system, RegJIN.
The final cut decision is up to city bureaus to hash out. Wheeler has asked each bureau to find ways to reduce their budgets by 5.6 percent in the coming fiscal year—a cut include employee payroll reductions. However, bureaus won't be required to make those cut suggestions until this fall, during a regular budget check-in. By then, the city's budget office will have a clearer understanding of how COVID-19 has impacted the city's revenue streams, which could result in fewer—or larger—bureau cuts.
Wheeler's proposed budget isn't all cuts; the draft also includes a slice of new spending. A few highlights:
- $1.6 million for new sidewalk curbs to meet Americans with Disabilities Act (ADA) standards
- $6.2 million in funding for the Joint Office of Homeless Services (which is co-funded by Multnomah County)
- $2.9 to support legal negotiations with public safety unions
- $250,000 for the Oregon Worker Relief fund, a program to support undocumented Oregonians who've been laid off but don't qualify for unemployment benefits
- $200,000 for legal representation of low-income refugees facing deportation
- $75,000 to Albina Vision Trust to conduct community engagement work around the future of the Albina neighborhood
- $480,000 to keep the Columbia Pool operating
- $327,782 to programs limiting diesel emissions from city construction operations
- $547,000 in grant dollars for organizations led by minority community members
None of Wheeler's budget includes the $114 million in funding the City of Portland received through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. CARES funding is specifically meant to cover funding directly connected to COVID-19—like housing and food assistance or personal protective equipment (PPE)—and it cannot be spent on lost revenue already accounted for in a city's current budget. Importantly, that means it can't cover salaries for furloughed employees.
City Budget Director Jessica Kinard said those dollars will be divided up in a process separate from the city budget talks.
"The approach that we’ve taken at the city is to have a holistic conversation with our council about where their priorities lie," said Kinard during the press conference. "We're trying to make sure we’re allocating the resources in a way that's as impactful as possible "
Portlanders will have an opportunity to give input on Wheeler's proposed budget next week, during a virtual public hearing on May 12 from 6:30 pm to 8:30 pm. Members of the public can submit testimony by filling out an online form by 4 pm this Friday, May 8.