The City of Portland Is Getting More Federal Money Than Expected, but Still No Guidelines on Spending

The budget picture for next year is also slightly less gloomy than previously.

Mayor Ted Wheeler arrives at a press conference in Portland, OR to give an update on the spread of COVID-19 in Oregon. (SIPA USA/ Justin Katigbak
By Nigel Jaquiss

The Portland City Council met online in a work session this morning to discuss next year's budget, which has been radically altered by the COVID-19 shutdown.

For a change, the news today was actually mostly good.

Elizabeth Edwards, the city's government relations manager and its point person on the federal CARES Act, which provides various forms of COVID-19 relief, told the council that Portland will be receiving $114 million, a nice bump up from the roughly $100 million the council was told about  initially. Edwards also said that federal officials, who are trying to get an unprecedented amount of money out the door, still haven't provided clear direction on how the money must be spent.

The broad outlines call for the money to be spent on new and anticipated expenses caused by the COVID-19 crisis, i.e., not used to backfill budget shortfalls.

But city officials are waiting to hear exactly what qualifies as an appropriate use of the money.

"We now have $114 million sitting before us," Mayor Ted Wheeler said to his colleagues. "The bad news is, we don't know how we can use it."

City economist Josh Harwood also provided a more precise projection for the 2020-21 budget, which officials are preparing now for the fiscal year that begins July 1. In previous weeks, Harwood and city budget director Jessica Kinard have told the council to prepare for a $100 million shortfall next year in the city's general fund budget.

Today, Harwood said he now thinks the damage will be closer to $75 million (the city's discretionary general fund this year is $584 million.) Harwood said he anticipates about a $45 million shortfall in the city's business income tax; a $20 million hit on hotel and short-term lodging taxes; and another $10 in delayed property tax and utility license fees.

But Harwood cautioned the council that since Gov. Kate Brown's stay-home order is only a month old and nobody knows when life will return to normal, his projections are tentative and subject to significant change.

"It's still pretty early and things are pretty fluid," Harwood said.

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