Portland Mayor’s Nighttime Shelter Plan Sparks Budget Battle as City Faces $92.8 Million Shortfall

Portland Mayor Keith Wilson’s nighttime shelter program is expected to become a heated topic of debate next month when residents can participate in joint discussions with the City Council on solving its $92.8 million budget shortfall.

This surfaced on Friday when the city administrator, Michael Jordan unveiled the pending budget crisis. He said the mayor would probably succeed in obtaining some funds for his shelter project but thought it unlikely that the full amount would be made available.

Jordan told city councilors that the budget shortfall could be trimmed down to $57 million by instituting $17 million cuts at city agencies, with $18 million generated by the Portland Clean Energy Community Benefits Fund – a climate tax paid to the city council by certain businesses situated within city limits.

The budget shortfall is made up by a $40.8 million budget for new projects, with the $28 million lion’s share for the nighttime shelter program; an end to $29.6 million one-time funding; and a $19.4 million decrease in revenue by the general fund. This is largely the result of property tax revenues and business fees not keeping pace with forecasts.

Portland’s Growing Homeless Crisis Costs Millions of Dollars

Portland, together with many U.S. states, is facing a growing homeless crisis and, apart from Mayor Wilson’s nighttime shelter program, the city needs $31 million from Multnomah County to cover the current cost of its shelter system. However, county and city leaders cannot reach an agreement on who is responsible for footing the bill.

Jordan reports that daily discussions are taking place, but whether the county and Portland reach a consensus on which party is responsible for the payment as stipulated in the intergovernmental agreement remains unanswered.

It was recently reported that Multnomah County has put a 200-shelter bed project on hold as it also faces a budget deficit crisis.

The city administrator told the city council that Portland had built systems to cope with homelessness and livability with one-time funding. However, this source of income has dried up and the city now faces the challenge of keeping the system operative in the future.

Another area of concern regarding the budget deficit is city council employment levels. Jordan said it is too early to predict how many posts, if any, could be affected.

The biggest issues are the general fund’s public safety demands for overtime costs in the police and fire departments, the Parks Bureau, and the end of one-time funding from the federal government’s COVID relief programs.

Portland public meetings will be held in March and April, with a balanced budget presentation by the mayor early in May.