Years of historic revenue shortfalls have left the Portland Bureau of Transportation with a gaping $32 million hole in its operating budget and leaders say beloved community events, critical safety projects, and dozens of jobs are on the chopping block.
This financial crisis has forced Portland officials to quickly choose between making severe budget cuts to the transportation bureau or identifying a new source of funding to keep the agency afloat.
“Portland’s ability to deliver even the most basic transportation services is at risk,” said PBOT Director Millicent Williams at a Tuesday council meeting. “The fact is that we have a severe structural imbalance in how transportation is funded in our city.”
PBOT is one of the city’s largest bureaus, with more than 900 employees. Only $142 million of PBOT’s $509 million budget is allowed to be spent on maintenance and bureau operations, and much of that so-called discretionary budget is reserved for paying off debts and other funding commitments. That leaves about $99 million left to run PBOT’s basic services.
The bureau’s discretionary budget comes from two main sources: state and local gas taxes and parking fees. But these funding sources have dipped in recent years, as Oregonians have switched to more fuel-efficient vehicles and a global pandemic slowed the number of drivers on the road and paying for parking. In the meantime, the bureau has relied on annual budget cuts and layoffs and nearly depleted its $63 million of bureau emergency reserves to stay running. Yet those short-term solutions are no longer enough to patch the bureau’s funding gaps.
On Tuesday, Williams explained to council members that without a new funding source, PBOT will be forced to gut dozens of transportation programs and lay off at least 89 employees.
“We’ve already been belt tightening for five years in this bureau,” Williams said. “There are no easy cuts remaining. It is not easy to find cuts in one area that won’t have a ripple effect throughout the whole bureau.”
The $32 million package of cuts includes routine road, bridge and sidewalk maintenance, traffic light repairs, street sweeping, graffiti removal and pedestrian and bicycle safety programs. It also pulls funding from community bicycle programs, like Sunday Parkways and Safe Routes to School, and departments that respond to maintenance requests and safety concerns from the public. Most of the proposed staffing cuts come from maintenance and administrative departments.
“We will not be the bureau that you see today if all of this moves forward,” Williams said.
The presentation places the responsibility on city commissioners to find dollars to keep these programs whole. Williams offered several suggestions, which included slimming other city bureau budgets to supplement PBOT or asking other bureaus to pitch in on programs like homeless campsite cleanups, community events or graffiti removal. Another suggestion: That the city follow through on its 35-year-old promise to steer 28% of annual revenue generated by a tax on utility companies that operate in Portland to PBOT’s budget. That 1988 funding plan has consistently fallen short, with much of that revenue going instead to public safety bureaus.
The idea was swiftly rejected by both Mayor Ted Wheeler and City Commissioner Rene Gonzalez.
“I’m not willing to take most of the [proposed PBOT] cuts,” Wheeler said. “But I’m not willing to take resources away from public safety.”
Portland’s ability to fund basic street maintenance is a political issue that stretches back decades yet permanent solutions remain scarce.
Former Mayor Sam Adams proposed, then backed away from a plan to raise money for street paving projects in 2008. In 2014, then-mayor Charlie Hales and City Commissioner Steve Novick spent the better part of a year campaigning for more money for the city’s transportation bureau, specifically to fund street maintenance and safety projects.
The pair held public meetings throughout 2014 and brought forward a plan to tax Portlanders and business owners to help pay for street repairs and safety projects. They pulled the plug in early 2015 because they couldn’t get a third vote on the City Council to pass their proposal. Portlanders went on to pass a 10-cent-per-gallon gas tax in 2016, which was renewed in 2020.
The gas tax, which most recently generated $18 million, was never intended to or capable of bridging the bureau’s funding gap.
Now another generation of Portland politicians is tackling the same issue.
Earlier this year, City Commissioner Mingus Mapps floated a citywide “transportation utility fee” that could bring in an estimated $35 million annually to go toward street maintenance. That tax, which would have cost homeowners about $96 a year, didn’t gain traction in city hall. In May, PBOT’s revenue streams suffered another loss after City Council walked back its plan to increase city parking meter costs by 40 cents per hour in the upcoming fiscal year. Instead, commissioners limited that increase to 20 cents — costing PBOT an estimated $4 million in anticipated revenue.
Mapps is still looking toward other solutions. On Tuesday, he said he’s working with PBOT to decide whether or not to increase the citywide gas tax next year, when it will seek voters’ renewal. But that could come at a cost.
“Frankly, what we can’t afford to do is have this be turned down by the voters,” Mapps said. “That would be yet another truly devastating blow.”
Williams also suggested tapping into the Portland Clean Energy Fund, which offers grant funding to programs that reduce greenhouse gas emissions. That fund, approved by voters in 2018 and operated by the Portland Bureau of Planning and Sustainability, has brought in tens of millions more dollars than anticipated.
“Given that the transportation sector contributes 40% of carbon emissions and most of PBOT’s work allows people to take less carbon intensive modes, we continue to see a lot of overlap between some of our programs and services and PCEF,” Williams said.
City Commissioner Carmen Rubio, who oversees the sustainability bureau, said she’s open to talking about ways the energy fund could support PBOT’s climate-conscious programs.
PBOT may start slashing jobs and programs as early as spring 2024, without financial intervention from City Council. City commissioners are expected to discuss the bureau’s budget crisis further at a council budget meeting later this week.
Mapps said he’s certain there’s no “silver bullet” solution to solve the budget shortfall.
“There are no easy answers,” he said. “I expect this budget cycle to be the most painful that any of us have faced during our time on this council.”
Editor’s note: The city will not fill 38 vacant positions in the transportation bureau as part of the proposed budget cuts. A previous version of this story characterized those as job cuts.