As Portland leaders grapple with a major citywide budget shortfall, some have sought potential relief from one of the city’s most prosperous initiatives—the Portland Clean Energy Community Benefits Fund (PCEF). The fund, which collects a 1 percent tax on local sales at large retailers to pay for carbon reduction projects, has found major financial success while other city programs and bureaus struggle to maintain basic services. 

Councilor Mitch Green is now the latest member of City Council to suggest a PCEF-related budget salve—and he thinks his proposal will fare better than others his colleagues have recently floated. In a plan made public today, Green proposed the city take out a short-term loan from unspent PCEF funds to pay for parks maintenance programs, which are on the chopping block in next year’s budget. 

Green’s proposal comes after several other councilors have suggested their own ideas for leveraging PCEF funds to support struggling city services. Early last month, Councilors Steve Novick, Jamie Dunphy, and Angelita Morillo put forward a plan to raise the PCEF tax from 1 to 1.33 percent, with the surplus going to fill budget gaps. The councilors said the extra revenue could amount to roughly $60 million a year for the city’s general fund. 

That idea, while appealing to some who want to see the business tax’s success replicated, appears to be on shaky ground. It immediately prompted backlash from climate and social justice advocates, including Councilor Candace Avalos, who said the proposal “poses long-term risks to [the fund] and undermines the firewall established between this fund and city budget politics.” Portland’s tax-averse business leaders also didn’t like the idea. In a rare show of unity, the Portland Metro Chamber joined nonprofits APANO and Verde in a letter opposing the .33 percent increase. 

Councilor Eric Zimmerman—who chairs the Council’s Finance Committee—has also indicated a desire to use PCEF revenue for other purposes, calling the program a contingency fund. 

“We don’t have a budget problem, we have a priorities problem,” Zimmerman said in a March social media post. “I’m not asking Portlanders for more levy taxes while we’re sitting on half a billion dollars that could make neighborhoods safer, parks cleaner, and help improve responsive public safety teams.” 

But much of PCEF’s revenue is accounted for. Late last year, the previous City Council approved the fund’s five-year, $1.5 billion spending plan, with a majority of the money going to city bureaus for climate work. Green says his proposal keeps that in mind. 

“Portlanders want us to keep our parks running and invest in a clean future. We can and should do both, and this plan does exactly that,” he says. “Unlike other proposals, this doesn’t take a dime from PCEF—every dollar will be repaid before it’s needed for climate programs.” 

Green’s plan, dubbed “Healthy Parks, Healthy Climate,” proposes borrowing between $20 and $80 million starting in the upcoming budget period and putting it aside to fill gaps in the city’s discretionary general funds. This would help the city avoid “unacceptable cuts,” and buy time for Portland leaders to figure out some longstanding budget woes. 

Green, an economist by trade, says he recognizes the plan’s potential risks. But he thinks the benefits will be greater, not only for the city’s struggling bureaus, but also for PCEF itself. 

The clean energy fund looks a lot different today than it did when the program was approved as a ballot measure in 2018. Originally expected to generate less than $100 million annually, PCEF was established to pay for community-based clean energy projects, with a special focus on programs benefitting people in historically underserved communities. But with revenue far outpacing early estimates, program leaders had to make some changes. Along the way, program advocates have worked to ensure the fund stays true to its intended mission. 

Last year, as Portland City Council grappled with a smaller budget shortfall, commissioners allocated a one-time transfer of $7.6 million from PCEF’s interest dividends to the city’s general fund. Members of the PCEF Committee, the volunteer body meant to oversee the program, gave their tacit approval to the decision, but said they hoped it wouldn’t set a precedent for the city to siphon money from the program.

It appears that precedent has been set, though. Mayor Keith Wilson’s proposed Fiscal Year 2025-26 budget includes an $18.7 million transfer from the clean energy fund’s generated interest to the general fund. 

Green says PCEF is at risk, given “mounting pressure…to solve our general fund imbalance” for the next fiscal year. He says it’s worth weighing the risks of borrowing from the fund—for example, the possibility of a future City Council defaulting on the loan—with the risks of doing nothing as city leaders continue to see PCEF as a way to bail out the general fund. 

“My view is that the loan method is the best defense for PCEF as it places it in a position to support the city in a time of great need, while reasserting that our planned community driven programs are worth protecting,” Green says. 

As Wilson's budget proposal settles and city leaders hammer out the details, Green said the bridge loan may not end up being necessary. Still, he said, he "wanted to ensure we have all tools available to keep our parks and climate whole as we navigate this budget cycle." 

Green plans to present his proposal to the PCEF Committee at their meeting this Wednesday. If his plan gets the Committee’s support, he’ll bring it to City Council for discussion in upcoming budget hearings.