Portland Mayor Keith Wilson looks to slash parks, permitting to balance budget

Mayor Keith Wilson is calling for layoffs and program cuts to balance his first budget as Portland’s top official. But he’s hopeful that it still addresses the city’s biggest issues.

“A budget is a statement of your values, that’s what this budget is about,” Wilson told OPB in an interview. “It’s restoring community health and safety.”

This is the first time Wilson, a longtime business executive, has managed a government budget. And it’s a uniquely challenging one.

The city is facing an anticipated $65 million budget shortfall, due to a series of compounding issues: inflation, expiring pandemic-era federal funds, increasing health care costs, overtime costs in police and fire bureaus, and declining property and business taxes. This deficit only grew due to Wilson’s campaign promise to open 1,500 new shelter beds by the end of the year — a plan that added $28 million to the shortfall. Another unexpected expense, almost $40 million in additional shelter costs, has Wilson now needing to fill a nearly $130 million hole.

To get there, Wilson is proposing layoffs, program cuts, new fees and a heavy reliance on temporary, outside funds from other governments — some of which aren’t guaranteed. Wilson’s proposed budget also protects programs previously on the chopping block.

The $8.5 billion budget — a 4% increase from the current budget — includes discretionary and non-discretionary funds. Non-discretionary dollars make up about 90% of the entire budget and come from grants, utility fees, contracts and other revenues that are specifically dedicated for a particular purpose such as water and sewer utilities. Discretionary funds, which come from license fees and taxes, have much fewer restrictions on how they can be used. This year, the city has an estimated $804 million in discretionary general funds to spend.

The shelter plan

At the center of Wilson’s budget is his plan to open new shelter beds, four day shelters and a new storage facility by December to address unsheltered homelessness. Wilson debuted his $28 million plan in January, but he’s now cut $3 million by eliminating two day shelters and replacing them with two “outdoor managed spaces” where people can access services.

The budget includes another new shelter expense: $38 million to continue operating a number of village-style shelters. Portland expected these safe rest villages and temporary alternative shelter sites would be transferred to Multnomah County to fund and operate in July. But the county disagreed.

Wilson is confident he can cover the $63 million of the combined shelter costs without using much city money.

Metro Council has agreed to give $15 million, and Multnomah County has pledged $10 million. Wilson said he believes the state will be able to cover the remaining $36 million.

It’s not clear if Wilson will receive all the state funding he’s counting on. The money will have to come through the Legislature. Lawmakers are waiting for a May 14 revenue forecast to drop before making major spending decisions.

Wilson has repeatedly said he’s confident that money will come through. Even if it does, however, the money will only last until July 2026. Wilson, who has lamented the city’s previous reliance on these so-called “one-time” funds, said he’s already working on solutions to fund shelter programs into the following year. If his plan works, Wilson believes the money will follow.

“If Portland shows success, we are going to create our own level of following,” he said.

Cuts to parks, permitting and administration

Wilson wants to cut 180 positions.

Sixty-three of those positions are in Permitting & Development. That office is funded, in part, by fees collected from developers. But Portland’s slow pace of construction has hurt that funding stream. With fewer construction projects to review and a dip in revenue, Wilson looked to cut salaries.

“The biggest cuts are in permitting because the activity is so slow,” he said. “I’m incredibly disheartened about that because those are good people that have given a lot to Portland.”

This proposal comes days after Wilson teamed up with Gov. Tina Kotek to announce a plan to waive certain building fees to encourage new construction in Portland. He said he’s not worried that cutting jobs in that department will hamper the city if their proposal does spur new development.

“Are we going to be pushing and pressuring the system?” he said. “Yes. But that’s how you create efficiency.”

He’s also proposed deep cuts to Portland Parks & Recreation. Along with axing 47 parks jobs, Wilson is floating a significant reduction in facility maintenance, bathroom cleaning, trash cleanup and landscaping at city parks.

He said he made the tradeoff to cut these programs to preserve youth programming and community centers.

“To what extent are we willing to maintain our trees versus our kiddos?” Wilson asked.

His budget maintains funding for citywide sports programs, youth programs run by SUN Community Schools, and money to avoid closing any community centers. Yet it does propose cutting back community center and community garden hours and closing youth summer camps and other youth summer programs in 2026.

Sewer repairs, street cleaning and paving projects may all be put on hold under Wilson’s budget, and 25 Portland Bureau of Transportation jobs may be eliminated.

Wilson is also looking to slim down administrative costs to balance the budget. Notably, he’s proposing nearly $10 million in cuts to jobs that fall into a broad category, ranging from community engagement to equity work. While it’s not mentioned in his budget summary, he’s previously projected these cuts to lead to an undetermined number of layoffs in the fall.

Another way to cut costs: freezing all raises for city managers and supervisors. The more than $4 million in savings come from pausing both merit raises and cost-of-living pay increases for at least a year. This is just the latest proposed change for city managers, who aren’t represented by a labor union. Wilson required all managers to return to working in-office full-time starting last month. He said he knows that rolling back raises while making new workplace requirements may come as a blow.

“I keep thinking about all the hits that our staff are taking,” he said. “Not only that, but are they proud of the job that they’re doing?”

Wilson leans heavily on the promise of his shelter plan to “turn Portland around” in a way that makes employees proud to work for the city. Once that plan has proven to be a success, he said, then he’ll think about pay raises.

Police, homeless services and transportation prioritized

There is one area of administrative costs that is clearly protected in Wilson’s budget. He maintains $11 million in funding to support the increased size of City Council and mayor‘s office staff approved by Portland City Council in January.

Wilson also wants to boost the Council Operations Office by three positions.

While Wilson’s budget includes significant job cuts, it also adds about 150 positions. Many of these positions are in Portland Parks & Recreation and the Bureau of Planning and Sustainability. These jobs are all funded by the Portland Clean Energy Fund, the voter-approved tax on big retailers reserved for programs that cut greenhouse gas emissions.

Wilson also wants to add 11 staff to the office that does homeless service outreach and shelter management, 14 staff to Portland Street Response and 10 staff to Portland Fire & Rescue. The plan will preserve funding for a Fire Bureau program called Community Health Assess and Treat that responds to non-emergency medical calls.

The Portland Police Bureau’s budget has been cratered by overtime costs in recent years, as retirement and slow recruitment have affected the workforce. Currently, about 90 of the 877 available positions in PPB are vacant. Wilson is turning to $12 million in one-time funding to help fill those vacancies and other program gaps. He’s also turning to use one-time dollars to fill budget gaps in the city’s Office of Violence Prevention and a gun violence program called Ceasefire.

Wilson said he isn’t worried about relying too much on short-term funding to keep public safety programs afloat. He believes this year‘s funding will help hire and retain more officers to offset the ballooning overtime costs.

“The way we’ve been using overtime compromises workplace safety,” he said. “You’re going to see safer, more ready and rested team members out there.”

While he’s proposed 25 job cuts in the Portland Bureau of Transportation, Wilson hopes to add 20 more jobs to the department and pledges to restore $37 million in anticipated cuts.

How is he wanting to pay for this?

Wilson is banking on a number of new revenue streams, unguaranteed state funds and temporary cash to pay for his plan.

To backfill the PBOT budget, he’s endorsing a 25% increase in parking meter fees. He’s also proposing to hike the city’s fee on rideshare companies from 65 cents per ride to $1.30 per ride. And he’s hoping for $11 million from the state that could come if the Legislature passes its sweeping transportation package this session.

Much of his budget relies on one-time funding that expires in 2026. Along with public safety programs, Wilson suggests using expiring funds to cover the salaries for new homeless outreach staff, new firefighters, police oversight groups, and graffiti and trash removal programs.

In all, Wilson proposes using $50 million in “one-time” dollars to fund the city this year — or 6% of the city’s discretionary fund.

One revenue stream he’s not touching is the Portland Clean Energy Fund. Last year, Mayor Ted Wheeler leaned heavily on the fund’s revenues to fill gaps in the city budget, using money for programs that reduced carbon emissions. Since then, Portland City Council approved a spending plan for PCEF, which directs more than $740 million toward city bureaus over the next five years. That leaves little money left over to fill other budget shortfalls.

Yet some councilors, like Councilor Eric Zimmerman, have still suggested tapping into the funds early. Others, like Councilor Steve Novick, have proposed increasing the PCEF tax rate and using the additional revenue to bolster the general fund.

Councilor Mitch Green floated another proposal Monday — essentially using PCEF as a loan with a promise to pay back any money borrowed in the future with city resources.

But Wilson is resistant to touching PCEF.

“That tax has been so good for Portland,” Wilson said. “We need to use it for what its intent and spirit was, and that’s to reduce emissions in our city responsibly and to address those that are being harmed by the impacts of climate change. If we start adding more tax to that, we’re inviting scrutiny from others or litigation, and that may cause the whole house of cards to fall.”

Wilson said he is open to supporting other new taxes, like ones focused on funding infrastructure or streets, in the future.

Now what?

Wilson’s proposal now heads to City Council. On Wednesday, he’ll present the spending plan to the full council. Councilors will spend the next several weeks drafting amendments to Wilson’s proposal, which may change which cuts or additions are included in the budget. Councilors will vote on these amendments and the final budget in early June.

Councilors aren’t allowed to comment on the mayor‘s budget until Wednesday. But they’ve been open about what they’d like it to include.

“We need to make sure that we’re centering our investments in fairness and equity to make sure this is a city that everybody can live and thrive in,” Council President Elana Pirtle-Guiney told OPB Friday. “And, as we take cuts, those cuts aren’t falling more heavily on some communities than the others.”

Wilson said his budget reflects the input of his 12 council colleagues. He believes it’s at least 95% in line with their perspectives.

“Their DNA is all over this budget,” he said. “Now it’s time for them to really see where I missed some things and fix it.”