In an effort to encourage new housing construction and provide modest financial relief to Portlanders, the Portland City Council approved a $7.1 billion budget Wednesday, May 17 that calls for lower water and sewer rate hikes, and no increases to charges for housing developers.

Citing an exodus of residents and businesses from Portland in recent years, Mayor Ted Wheeler proposed late-stage budget changes that would slow utility rate increases for water and sewer, while halting any increase in parking meter rates. The mayor said “affordability” was a key driver in the city’s population loss.

“We want people to stay, and I think people acknowledge that we are at an inflection point in our city,” Wheeler said. “Studies now show that people are choosing not to stay here. They’re moving their households. They’re moving their places of employment and they are choosing to invest elsewhere….”

Wheeler referenced population research from Portland State University, which estimates Portland lost about 4,800 residents from 2020 to 2022. U.S. Census Bureau figures indicate the decline could be closer to 17,450.

“In the near term, I’m asking us to hold the line and do everything we can to [entice people] to come here, to stay here, to invest here, to bring their employees back to the city of Portland,” Wheeler added.   

The council enthusiastically approved Commissioner Carmen Rubio’s proposal to keep a number of system development fees related to parks, water, sewer and transportation at the current rate, in an effort to encourage new housing construction. 

Commissioner Mingus Mapps was the lone “no” vote on the city budget. Mapps lambasted Wheeler’s proposed budget amendments, saying they’d be worse for city residents than the incremental fee increases the mayor wants to prevent.

Mapps, who oversees the Portland Bureau of Transportation, the water bureau, and environmental services bureau, said curbing fees wouldn’t put much money back in people’s pockets, but it would cost city bureaus millions in lost revenue, leading to staffing cuts and infrastructure project delays. 

“My no vote is a red flag and a warning to Portlanders,” Mapps said. “For reasons that still mystify me, this budget contains terrible decisions around funding infrastructure, both in the water and environmental services space, in order to literally save pennies.”

Sewer work in Portland in 2019. The city's sewer operating fund revenues will be less than initially budgeted, after the council approved a budget with lower utility rate hikes. Bureau of Environmental Services photo

Before the council's vote to approve the 2023-24 budget, the mayor's office noted each city bureau was asked to submit their funding requests without adding any new ongoing or one-time funds. The budget noted inflation and deferred infrastructure maintenance were concerns. Still, Wheeler lobbied for cuts to new revenue.

Wheeler’s budget amendments will leave the Portland Water Bureau with a projected $2.4 million revenue dip and $8 million less in revenue for the city’s sewer operating fund. To compensate, the bureaus could enact a hiring freeze, or delay projects that have yet to start. 

A majority of the budget discussion centered on the need to stabilize funding and revenue for the Portland Bureau of Transportation. Wheeler proposed cancelling a planned 40-cent-per-hour parking rate hike in PBOT’s service area. Mapps instead suggested the rate hike be halved, at 20 cents per hour. Mapps’ proposal was approved by everyone but Wheeler.

Wheeler’s budget summary said the 2023-24 spending plan was bolstered by “new revenue from business license taxes and the return of property taxes from the closure of Urban Renewal Areas.”

The extra money helped balance the budget and pay for projects focused on homelessness, police, economic recovery, and livability, Wheeler’s office noted in budget documents. 

The 2023-24 budget also includes funds for the implementation of charter reform, which Portland voters approved in 2022. 

Homelessness and housing

The budget includes $43.3 million for the city to continue operating 400 congregate shelter beds through the Joint Office of Homeless Services, and additional funds for the expansion of the city and county’s Street Services Coordination Center, which aims to streamline efforts to get unhoused residents into shelters and connected with vital services. 

The city notes 3,400 affordable housing units are already slated to be developed, with more than 625 more units coming before the end of the year.

Police and prosecutions

Amid Portland Police Bureau’s plans to hire 300 new officers by mid-2025, the latest budget adds $5.3 million for 43 new PPB positions and stolen vehicle recovery work. City budget leaders also say the city will partner with the Multnomah County D.A.’s Office to ramp up retail and vehicle theft investigations and prosecutions. 

Portland Street Response

No new funding will be allocated for Portland Street Response, the city’s crisis response program that dispatches EMTs and licensed mental health professionals to people in mental or behavioral health crises. 

The budget does include $2.6 million for vehicles to reinstate Portland Fire & Rescue’s rapid response vehicle program. The program uses smaller, non-fire equipped vehicles to respond to calls that require less staff and resources. 

Litter, graffiti cleanup and aesthetic improvements

Next fiscal year’s budget also maintains $21.7 million for graffiti removal and trash collection, done primarily through the Homelessness and Urban Camping Impact Reduction Program and the Public Environment Management Office. It also includes $2 million for citing and removing “derelict RVs” from Portland’s streets and $400,000 to fund neighborhood clean-up events led by nonprofit SOLVE. Another $800,000 will fund efforts to stabilize small businesses, hold events, and add decorative lighting to areas throughout the city to encourage shopping and visiting.

The council is expected to adopt a final budget June 14, after it undergoes review from the Tax Supervising and Conservation Commission.