News May 20, 2015 at 4:20 pm

Inside the Black Box


They can talk all they want, in public or in private, but none of the City's elected officials have a clue as to how to create wealth.

Listening to Hales gloat and stroke his ego on OPB radio yesterday while trying to take credit for this budget surplus I couldn’t help feel that this anticipated spending had more to do with his angling for reelection than anything else. Given it was only two short years ago that the city was said to be suffering from one of the largest budget deficits in history, I’ve long felt this boom/bust merry-go-round is mostly just smoke and mirrors.

Just last month the Oregon Supreme Court ruled that much of the PERS cuts our former Governor and Legislature tried to ram-jam upon retirees is illegal. This is anticipated to reinstate an estimated $4-billion statewide in obligations for the near future. My understanding is that many public agencies have prematurely factored in the savings they expected from these cuts into their projected budgets before this was able to work its way through the courts. Therefore, it would seem this forecasted “surplus” Hales is trumpeting is at least in part based on savings that will never materialize. Do you have any idea how much of this projected surplus is based on this counting your chickens before they hatch scenario?…
Zipitup: We wrote about Mayor Hales budgeting for the PERS reforms before they were a done deal in 2013.…

My understanding, from talks with the city's budgeteers, is that there will be increased costs as a result of that dice rolling, but that it won't much eat into the new "ongoing" money the city has found from surging business taxes and other sources. In fact, that ongoing money could even go up if the office finds more than expected, they say. That said, I had the same question you did: How much of our current plush situation is from an economic upswing, and how much is due to the "prudent management" (I don't recall the actual verbiage the mayor used) he touted? I'm guessing the vast majority is favorable tax receipts.
Thanks for the reply and the link. I guess we'll have to wait and see come July when they have to start paying it back. I'm still skeptical that Portland's chunk of that $4-billion will be as easily swept under the "plush" rug as they predict.

Please wait...

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