Mayor Ted Wheeler’s once-grim outlook on the city’s upcoming budget has grown sunnier, thanks to an assist from the federal government.

Wheeler’s proposed $5.7 billion budget for the 2021-2022 fiscal year, released Thursday, restores funding for city programs previously on the chopping block while avoiding large-scale investments in law enforcement.

Wheeler’s proposed budget will need City Council’s approval before going into effect on July 1, 2021.

The city's general fund has lost an estimated $100 million from the COVID-19’s pandemic impact on city revenue streams, like Portland's business and lodging taxes, including a predicted $20 million gap in the ‘21-22 budget.

Wheeler, with the help of the City Budget Office, was able to patch that deficit with mandatory 5 percent budget cuts across most city bureaus, a freeze on cost-of-living wage increases for certain employees, $14.2 million in new taxpayer revenue from the parks levy approved in November, and funds promised through the America Rescue Plan Act (ARPA), the federal COVID-19 economic recovery package signed into law by President Joe Biden last month.

In total, the city expects to use $29.3 million in ARPA dollars to backfill the coming year’s budget, which accounts for about 30 percent of all ARPA funds Portland expects to receive. Those remaining federal dollars will be allocated through Portland City Council in a separate process over the summer.

In a statement accompanying his budget proposals, Wheeler described the APRA assistance as a “bridge to the economic recovery” the city faces in the wake of COVID.

“The investments I have proposed reflect the city’s core values of anti-racism, equity, transparency, communication, collaboration, and fiscal responsibility,” wrote Wheeler. “Our responsibility this year is to ground ourselves in these values and to thoughtfully, carefully reorient our resources to invest in high-value actions that will help us begin to build back better.”

Wheeler's proposed budget centers on what City Council has identified as its current priorities: Addressing homelessness, community safety, and economic recovery. Here's a breakdown of how he'd like to see those issues financed in the coming year:

Addressing Homelessness:

Wheeler proposes using $2 million in ARPA dollars to create more homeless shelters, while using $250,000 in city funds to develop "housing support services" for transgender Portlanders seeking affordable housing. He also proposes a $2.4 million investment in the city's current "hygiene stations"—the portable hand-washing stations and portable toilets dispersed across the city during COVID.

Wheeler suggests using $1.3 million in general fund dollars to pay to "clean up" homeless encampments, a contentious process that has largely been put on hold during the pandemic.

Community Safety:

"Community safety" is a comfy term that includes the juiciest piece of Wheeler's proposed budget: police spending!

Wheeler has proposed a significant reduction in ongoing dollars from the city's general fund towards PPB. But to understand the cut's significance, it's important to first understand some city budget wonkiness: At the beginning of each budget process, the City Budget Office gives each city bureau a rough estimate of how large their budget could be for the next fiscal year, based on inflation and expected city revenue.

That "base budget" for the Portland Police Bureau (PPB) for '21-22 came in at $202.1 million. Following that estimate and adding in the mandatory 5 percent reduction, PPB requested a budget of $197.5. Wheeler's proposed budget for PPB comes in at $199 million. This number, importantly, does not include budget dollars that don't come out of the city's general fund (like the city's "police special revenue fund"). With those extras funds added, the total proposed budget for PPB comes in at $228.8 million.

In budget documents, Wheeler touts a proposed "$9 million" in cuts to the PPB budget, which refers to PPB budget's reduction compared to the base budget—not the bureau's requested budget.

Wheeler makes those cuts with overtime reductions and avoiding personnel costs required to fill the bureau's currently vacant police officer positions. His budget instead asks the bureau to create a plan to eliminate those vacant positions by this fall. Wheeler also has placed a freeze on all cost-of-living wage increases for city employees who aren't represented by a union or are in a union with an open contract. This includes the Portland Police Association (PPA), the union that represents all rank-and-file PPB officers that's currently in the middle of negotiating its contract with the city.

But Wheeler's budget does expand PPB staff. His proposed budget steers $5.3 million in city dollars to support the "accelerated hiring" of 30 patrol officers to avoid next year's predicted officer shortage. Wheeler also suggests tripling the current number of Public Safety Support Specialists (PS3s for short), a relatively new unarmed PPB position meant to respond to low-level crimes. The proposed $1.8 million would expand the PS3 team of 11 to 33. The budget would fund five additional employees in PPB's records division and three positions in the bureau's Office of the Inspector General, which analyzes officer use-of-force and other reports.

Wheeler also earmarks $4 million in PPB dollars to use to support the creation of Portland's new police oversight board, which won't be in operation until next year.

"Community safety" also includes Portland Fire and Rescue's (PFR) budget. Wheeler proposes using $977,000 to fully fund the Portland Street Response pilot program for the duration of the year-long program, which began in February. Wheeler avoids closing any fire stations or reducing needed station staff, two reductions that the fire bureau floated in February as a way to meet the 5 percent budget reduction requirement. To meet those cuts, Wheeler proposed decommissioning a fire boat and several support positions within PFR, many of which are currently vacant.

Wheeler's budget also dedicates $1.4 million to the city's "Community Safety Transition " department, a new office created to streamline work being done by the city's bureaus involved in community safety, like the PPB, PFR, Bureau of Emergency Communications, and Bureau of Emergency Management. That office, which is run by former Portland Fire Chief Mike Meyers, currently lives in the city's Office of Management and Finance. Wheeler proposes cutting two PPB staff to pay for a new analyst position for the Community Safety Transition office.

Economic Recovery:

Wheeler's proposed budget increases the budget for Prosper Portland (the city's economic development bureau) to support local businesses impacted by COVID and bolsters public spending in programs that clean up trash and graffiti, and oversee homeless encampment sweeps.

Specifically, Wheeler suggests putting $500,000 in general fund dollars toward grants for small businesses that need repairs (a nod toward the property destruction caused by protests in the past year), $100,000 to support local music venues through Music Portland, and $192,000 to bolster the city's Film Office. Wheeler also flags $250,000 to support the technology needs of small businesses and individual community members.

Wheeler proposes using federal APRA funds to invest $165,000 in programs to "bring residents, businesses, and visitors downtown and to the city's business corridors," $530,900 in support services for Portland's business district associations, and $700,000 in resources for Portland's minority chambers of commerce.

The proposal also puts $3.4 million toward the Office of Community and Civic Life's graffiti removal program and $300,000 toward the Office of Management and Finance to hire contractors to clean up trash across the city. (In Wheeler's budget press announcement, he indicates that this work will specifically be done by "homeless people.")

Next Steps:

Wheeler's budget is now set to be picked apart by his City Council colleagues during a May 4 work session. That 9:30 session won't include public comment, but can be streamed on the city's YouTube page. That work session will be followed by a May 5 public hearing at 6 pm, when Portlanders can offer feedback on Wheeler's proposed budget. Members of the public interested in testifying must register by 4 pm on May 4. Portlanders can also watch that hearing via the city's YouTube page.

City Council is scheduled to adopt the budget during a June 17 council session.