FILE - The entrance of the Northrup Shelter, an emergency overnight shelter in Portland, Ore. on Thursday, Nov. 27, 2025. The shelter is one of several opened since Portland Mayor Wilson entered office in January 2025,
Saskia Hatvany / OPB
Portland’s budget woes are worsening, and this raises big questions about how the city pays for programs that address homelessness.
On Wednesday, the city’s budget office announced the city needs $169 million in additional money to keep current programs running in the next fiscal year, which begins on July 1.
This is far higher than the roughly $67 million anticipated shortfall outlined in December.
That number didn’t include programs that rely on funds that were only covered for one year. Those programs fall into two politically contentious categories: Homeless response and public safety.
According to the Wednesday budget report, the city needs to find $54 million dollars to keep city-run homeless shelters running next year. That includes both the new overnight-only shelters, a central piece of Mayor Keith Wilson’s campaign pledge, and the city’s nine alternative shelters, largely made up of tiny home villages.
Portland also needs to find $13 million to keep the city’s current street cleaning and tent removal services afloat.
The funding gap includes over $30 million in one-time funds that support several public safety programs. That includes money to maintain gun violence and self-defense programs, funds that pay for 12 firefighter positions, and $11 million to support police overtime costs.
Budget shortfalls have become an expectation in Portland City Hall as of late.
Much of that is due to previous decisions to fund new programs with short-term federal pandemic-related funds – without identifying a long-term funding plan. But the region’s larger economic issues, like declining tax revenues, a dip in new construction, and stagnant population growth, also contribute to the budget situation.
All the while, the city’s costs grow.
Inflation has made employee health care, salaries, city technology, and other materials more expensive.
The new numbers make clear which funding debates will rise to the top this budget season. Threats to cut or augment police funding – as a way to express an opinion on police work – have become commonplace during budget season in City Hall.
And already, councilors have expressed hesitation in continuing to back Mayor Wilson’s shelter plan.
In December, Council President Jamie Dunphy told OPB he wouldn’t support a budget that funds the new shelters for a second year.
The budget news came hours before Dunphy and other councilors were set to debate a plan to use unspent Portland Housing Bureau funds on programs that help people from becoming homeless.
Last year, Wilson scrambled to bring in money from the state and other local governments to pay for his new overnight shelter program. But that cash was only pledged for one year.
The budget report didn’t suggest how the city could find funding to fill the gap. But it acknowledged that talks have begun behind the scenes.
“Discussions are already occurring about options to fund those programs that do not involve making reductions to other City services,” reads the report. “The result of those discussions will be reflected in the Mayor’s Proposed Budget.”
City councilors are expected to discuss this new funding gap at a Feb. 25 council meeting. Wilson will release his proposed budget in April.
