Portland Mayor Ted Wheeler Says City Faces $5 to $25 Million in New Budget Costs

In the midst of a boom, the mayor is asking bureaus to cut 5 percent. PERS, labor costs and a expanding response to homelessness are top items that have increased in the city budget.

Mayor Ted Wheeler is asking city bureaus to propose 5-percent cuts even as the Portland economy continues to boom.

Increased labor, pension and inflation costs, among others, will mean the city needs to spend between $5 to $20 million more in next year's budget, he wrote in a budget guidance memo to the bureaus on Friday.

"We are now well into the ninth year of economic expansion, and the majority of Portland's economic indicators are at an all-time high," Wheeler wrote. "Despite this great abundance, the City's budget continues to operate at a deficit as costs continue to grow faster than revenues."

The exercise has become a regular ritual at City Hall. This is the third year in a row that bureaus have been asked for cuts.

The two prior years, budgets were stable, but before that the city also cut for multiple years.

In his letter, Wheeler also laid out his priorities for areas where increased budget allocations might be considered: