Mayor Wilson focuses on resilience and grit in proposed budget as Portland faces record shortfall

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Overview

Facing a record shortfall in the general fund of more than $160 million, Portland Mayor Keith Wilson today proposed an $8.5 billion city budget for fiscal year 2026-27 that makes major cuts, while maintaining critical resources like police officers, fire stations, parks, community centers, and affordable housing.

"The stakes are high," Wilson said in a video statement. "This year, our budget must stretch farther, carry more weight, and bridge a deeper chasm."

"The stakes are high," Wilson said. "This year, our budget must stretch farther, carry more weight, and bridge a deeper chasm."

"I have done my utmost to set my colleagues on City Council up for success, and to blunt the impact of our most painful cuts," he said. "I have sought every efficiency, prioritized workers and programs, reviewed all accounts and tapped reserve funds where possible. Despite this work, councilors will still be forced to make far more difficult decisions than our city government has faced in many years."

Like many other cities, Portland's revenues have been hit hard by changes in federal tax law, economic uncertainty, and slow growth in downtown property values.

At the same time, costs are escalating. For example, the city's health insurance costs will rise by more than 20% next year.

Wilson emphasized Portland's progress in the last year and urged City Council to invest in the future. "The strongest cities are forged not by limitless abundance, but by the decisive moments when facing the deepest challenges and threats," he said.

Wilson's proposed budget:

• Keeps open all of Portland's 31 fire stations.
• Keeps open every community center and every city park.
• Keeps every Portland police officer and investigator on the job.

"We cannot put the brakes on our recovery," Wilson said. "We cannot delay our renaissance."

Wilson identified four cornerstones for his approach to the budget: "Shared vision, shared priorities, shared necessity, and shared sacrifice."

Wilson proposed some cuts to homeless services but reaffirmed his determination to help unsheltered Portlanders get off the streets.

"We cannot afford to return to an era where we found death in tents, under tarps, behind dumpsters, and beneath bridges," he said. "We cannot afford to return to an era where businesses failed, and families left."

The mayor's budget now goes to the council for discussion and amendment. The council is expected to approve a budget in late May and formally adopt it in June.

Find the Mayor's Budget Highlights and Key Adjustments

Find the Mayor's FY 2026-27 Proposed Budget

Read the Mayor's budget message

Watch the Mayor's video message

Searching for revenue

While the city's total budget is $8.5 billion, this figure includes internal transfers, utility rates, federal funds, and other revenue earmarked for specific purposes like construction or debt servicing. The $160 million shortfall lies in the city's general fund, which pays for services like fire fighters, police, and parks. For fiscal year 2026-27, the general fund is predicted to have expenses of $906 million and revenues of $743 million.

To close the gap, Wilson turned to several financial resources, including:

• Tapping $44 million from various reserves and contingency funds.
• Transferring $27 million in interest earned by the Portland Clean Energy Community Benefits Fund.
• Increasing charges and fees by $7.4 million.

To balance the budget, Wilson also proposed several cuts and savings.

Significant reductions

"The strongest cities are forged not by limitless abundance, but by the decisive moments when facing the deepest challenges and threats," Wilson said.

Here are some of the cuts and savings in Wilson's budget:

• Homeless services. No longer transferring $30.5 million to Multnomah County to provide homeless services. Instead, Portland will provide those services directly to help our most vulnerable neighbors move into permanent housing. In addition, cutting shelter services by $18 million (31%) to $39.9 million, and reducing support for street outreach services by $1.7 million (37%) to $2.8 million.
• Police. Cutting $21.7 million in materials and services, technology, administrative support, and programs such as public safety support specialists. The proposal keeps every police officer and investigator on the job.
• Fire. Reducing the number of fire engines, reducing the number of hours that some teams operate, and other reductions for cuts of $7.1 million. All fire stations remain open under this proposal.
• Parks. Operational efficiency, reducing community center operating hours, reducing maintenance, and other reductions for a total of $13 million.
• Streamlining. Saving $21 million citywide across human resources, information technology, procurement, equity, engagement and communications, and realigning into a more centralized model.
• Other reductions. Cuts to Prosper Portland, the Bureau of Emergency Communications, Portland Parks & Recreation, PDX 311, and other bureaus and offices.

Wilson recommended cuts to programs that have been largely spared from reductions in recent years, such as police and shelters. He said the magnitude of the budget gap this year requires sacrifices from every part of the city - but he designed those choices to preserve core services as much as possible.

New fees to support transportation network

Outside the general fund, the proposed budget includes two fees to help the Portland Bureau of Transportation maintain roads, bridges, signals, and other infrastructure.

• The transportation utility fee, which City Council is currently considering, is projected to raise $23.4 million through charges that would be tacked onto water, sewer, and stormwater bills starting next year. The charge would add roughly $12 a month for a single-family home or $8.40 a month for an apartment.
• The street damage restoration fee is projected to raise as much as $20 million. The fee will be paid by utilities and contractors who dig into roads to install power lines, gas lines, telecommunications cables, and so on. City Council adopted this fee April 15.

Workforce reductions

Altogether, Wilson's budget calls for 203 positions to be discontinued and 58 positions to be added. This yields a net reduction of 145 positions, some of which are currently vacant.

Structural issues

The city's balance sheet faces several structural issues that together have produced a slow-moving budget crisis. President Trump's 2025 tax act, known as the One Big Beautiful Bill Act, altered the way the federal government calculates business tax. This change alone strips the city of an expected $33 million in revenue over two years. It is also choking off millions of dollars of tax revenue for Multnomah County and the State of Oregon.

At the same time, the rise of remote work has sapped demand for office space, depressing downtown real estate values and reducing income from property taxes. Economic uncertainty has chilled the investment climate.

The road ahead

Although the city's finances are under pressure, Wilson refused to back down from his values or his vision for Portland. "Our revenue may lag, but Portland is full steam ahead," he said.

"I'm making a promise to Portland. Together, we will rise to this challenge and meet the moment with innovation, grit, patience, and compassion. We will reaffirm and sustain our successes in public safety, compassion for our most vulnerable, environmental stewardship, and economic viability."

Learn about the budget process

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