Portland transportation insiders have long been sounding the alarm: the city's transportation bureau is in financial free fall. But most Portlanders haven’t been in the loop about the budget crisis threatening city streets. The issue has remained mainly in the jurisdiction of Portland Bureau of Transportation (PBOT) staffers and city planning wonks.
If the bureau doesn’t receive a life raft, however, the extent of PBOT’s money woes may soon become much more apparent to the public. Right now, bureau leaders face a financial outlook requiring $32.6 million in budget cuts in fiscal year 2024-2025—nearly a third of the bureau’s $99 million annual allotment for general transportation resources. Much of the funding shortfall is due to a dramatic decline in revenue from parking fees over the past few years.
At a Sept. 26 budget work session with Portland City Council, PBOT officials laid out grim projections for the future if something doesn't give. The message? If the city's transportation bureau falls, no Portlander will be left unscathed.
In the budget work session, which came ahead of the city's 2024-25 budget planning season, PBOT leaders made their case for more financial help from the rest of the city by spelling out what's at stake.
On the line: hundreds of full-time jobs, critical maintenance work, beloved transportation programs like Sunday Parkways and the Transportation Wallet, and much more. The only way out is to raise revenues—or divert funds from other city bureaus and programs.
"There is no way to cut $32 million from PBOT's budget without deeply undermining Portland's transportation system," Commissioner Mingus Mapps, who oversees PBOT, said at the budget work session. “We can cut services or we can raise revenues.”
But city commissioners and Mayor Ted Wheeler aren’t keen on either of these options.
In May, Wheeler—arguing Portlanders were tired of the city’s high cost of living— tried to gut a council-approved, 40 cent parking fee increase that would’ve brought PBOT $24 million in much-needed revenue over the next five years. Mapps was able to negotiate approval of the parking fee increase, but at only 20 cents, cutting that revenue stream in half.
The parking fee debacle was emblematic of PBOT’s precarious situation and reignited urgency around addressing the bureau’s budget woes. PBOT leaders realized not only were the majority of Portlanders unaware of the transportation budget crisis— it also hadn’t made its way into the water cooler chatter at City Hall yet.
Backing up a bit: Revenue from gas tax and parking fees—PBOT's biggest moneymakers—has been in rapid decline since the beginning of the pandemic. There’s also been a historic drop in State Highway Fund monies available to the bureau. Because of this, the bureau has depleted $63 million in reserves since 2019. And the crisis is just beginning.
In an effort to get ahead of its financial woes, PBOT has made budget cuts totaling $20.5 million and eliminated 60 full-time positions over the last five years. But those actions haven't been enough. As transportation advocate and PBOT Bureau Budget Advisory Committee (BBAC) member David Stein told the Mercury in May, it was time to “blow it up.”
“The longer PBOT appears to be functioning, the longer people like Mayor Wheeler are going to be able to make decisions based on [that appearance],” Stein said.
Over the following months, the BBAC, which normally breaks for the summer, met regularly to figure out exactly what they could “blow up” to make the extent of the crisis known. PBOT also conducted surveys, trying to get a read on the transportation programs Portlanders find most valuable and which might be sent to the chopping block.
“In summary, our key takeaways from the feedback we've received…are to focus on the transportation service areas that support maintenance, community safety, and livability,” PBOT Director Millicent Williams said at the budget work session.
The first place for cuts: internal payroll. PBOT currently employs more than 1,000 employees across all divisions. A $32.6 million budget cut would require eliminating 127 full-time positions, mostly impacting business services and the PBOT director’s office (33 positions eliminated), maintenance operations (31 positions eliminated), parking and regulatory (23 positions eliminated), and policy, planning, and projects (24 positions eliminated). Due in part to a hiring freeze, 39 of the 127 positions on the line are currently vacant. That means 88 full-time employees could be laid off in the next fiscal year.
Next would come drastic reductions in PBOT services. One of the most notable areas where the bureau would cut services is within maintenance and engineering. Pavement maintenance, graffiti abatement on PBOT property, and vegetation management would be eliminated. Street striping would be reduced to twice a year, and snow plowing would only take place on primary routes. One proposed cut that got a lot of attention at the budget work session: emergency repair work—including landslide repair.
“I don’t see any planet on which you could cut [landslide and emergency repair work],” Wheeler said. “I mean, if a landslide happens on West Burnside or something, you're not going to attend to it? What does that mean?”
PBOT Interim City Engineer Todd Lines responded, saying "we need to come up with the funding [for fixing landslides]."
“They'll sit there,” Liles said. “Some landslides require retaining walls to construct; those are getting very expensive with the cost of inflation. It's tremendously expensive to fix.”
“Sorry I asked,” Wheeler replied.
Liles also said PBOT wouldn’t be able to maintain its Americans with Disabilities Act (ADA) ramp construction program—which the bureau is bound to by a 2018 legal settlement.
“Are you suggesting we break that settlement?” Wheeler asked.
Liles said no, but that PBOT will “need to find additional funds to construct those ramps.”
The interaction appeared to be a eureka moment for Wheeler about the purpose of PBOT’s presentation at the work session.
“So let me read between the lines: You're saying this is what it looks like, but you're in no way advocating for this,” Wheeler said. “You're lighting a fire under us and saying we need to find an alternative to fund these.”
PBOT would also cut major components of its parking and regulatory program, including parking district support, parking meter repairs, and the derelict RV program, which removes abandoned RVs from Portland streets. Six parking enforcement officer positions would be eliminated.
In any given year, PBOT receives a substantial share of its funding from parking-related revenue. Even though parking revenue is dropping for unforeseen reasons—for instance, that people now take fewer car trips downtown because of the pandemic— the drastic cuts to the bureau’s parking management services would only perpetuate the cycle of financial disarray.
Then there’s the community programming cuts. Such a drastic budget cut would mean the end of bike, pedestrian, transit, freight, and ADA coordination and engagement, public plaza maintenance and street activation, and popular, beloved community programs like Safe Routes to School, Sunday Parkways, Transportation Wallet, and Biketown for All.
All in all, as PBOT Director Williams said at the budget work session, a $32 million cut would mean the end of PBOT “as you see it today.”
“Transportation and transportation-related infrastructure is so present, it's practically invisible. From the moment that you walk out of your door, you are interacting with our transportation system,” Williams said. “Portland's ability to deliver even the most basic transportation services is at risk.”
New revenue streams
PBOT leaders have emphasized the need for long-term, sustainable sources of revenue that don’t rely on fossil fuel infrastructure like gas tax and parking revenue. But the urgency of the current situation calls for immediate reshuffling, and PBOT needs City Council support in order to stabilize the budget.
Tools the city has at its disposal include parking fees, a street fee, street damage fees, and general fund support. City Council could also restore Utility License Fee (ULF) payments to PBOT—fees collected from various agencies, including water, sewer, gas, electric, and cable, as rent for the use of the right of way. Although the program was set up to benefit PBOT, which owns much of the city’s right of way, most of the ULF revenue currently goes to other bureaus.
If ULF payments were restored to 1988 levels, PBOT could access $25 million in annual funding, at the expense of other bureaus. PBOT leaders also want access to the city’s general fund. The suggestion didn’t go over well with most of City Council, due to concerns it would reduce public safety programs paid for by general fund dollars.
“I come with a sense of concern that this has come to us late in the game. And the question before us is: are we willing to take funds out of police, fire, 911, emergency response, and general emergency management in order to fund PBOT?” Wheeler said at the budget session. “You're not the only bureau.”
Commissioner Rene Gonzalez, who oversees Portland Fire & Rescue, echoed Wheeler’s statements.
“I will not support cutting public safety to address PBOT,” Gonzalez said. “That's not palatable at this point in the city's history from my vantage point.”
Other options for funding include the Portland Clean Energy Community Benefits Fund (PCEF), which is already planning to allocate millions of dollars to programs like the Transportation Wallet and create an electric bike incentive program. PCEF leaders, who work within the Portland Bureau of Planning and Sustainability, have expressed hesitation about taking over PBOT services in the past. Their goal is to expand programs that will help lower the city’s greenhouse gas emissions, not fill in existing gaps.
At the end of the work session, participants acknowledged that they didn’t reach any major conclusions.
“There are no easy answers. What I can do in my role is to be transparent with you and let you know how we are looking at the problem,” Mapps said. “I do not expect us to find any magic bullets here…today is the beginning of the dialogue.”