City Council approves $8.5 billion budget to close historic shortfall for fiscal year starting July 1

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Facing a record shortfall of more than $160 million in the general fund, the Portland City Council approved an $8.5 billion city budget for fiscal year 2026-2027 that makes major cuts, while preserving services such as fire stations, parks, and police officers.

Over two days of discussion, councilors considered more than 40 amendments to the budget proposed by Mayor Keith Wilson - often sparking passionate debate. Many proposed amendments resulted in 6-6 ties, falling one vote short of the seven required to pass.

"Today was long and contentious, but I'm grateful for my colleagues who show up every day, committed to make Portland better," said Council President Jamie Dunphy, a District 1 councilor who represents East Portland. "Onward to the next phase."

Watch the council debate (part 1)

Watch the council debate (part 2)

The budget now goes to the Tax Supervising and Conservation Commission for legal review. The council can make further adjustments to the approved budget after that, so long as the change to any individual fund does not exceed 10%. In June, the council will formally adopt the budget so it's ready to take effect on July 1 - when the new fiscal year begins.

"Portland confronted one of the most challenging budget deficits in our history this week," said Mayor Wilson. "My proposed budget sought every efficiency, prioritized workers and programs, reviewed all accounts and tapped reserve funds where possible. I'm grateful that the vast majority of my proposal remains intact. In reviewing the budget, councilors were forced to make far more difficult decisions than our city government has faced in many years. It was an emotional and difficult task, and I'm grateful we were able to preserve critical park, public safety, and homelessness programs Portlanders rely on most."

Learn about the budget process.

Amendments

The mayor's proposed budget closed the shortfall by reducing services, tapping reserves and contingency funds, transferring interest earnings, and increasing charges and fees.

Councilors restored some of the proposed cuts and in some cases provided additional funding for services by drawing further from contingency funds or reducing support for other programs. They approved more than a dozen amendments, including:

• Morillo 1. Restoring $2.5 million to Project Ceasefire, Portland Street Response, CHAT and Summer Free for All by reducing support for councilors' personal security.
• Green 4. Directing the city administrator to cut management positions to save $3.3 million.
• Kanal 2. Preserving a fire engine in Station 22 by drawing $2.5 million from a newly created Business License Tax Reserve Fund.
• Pirtle-Guiney 1. Restoring $100,000 to Prosper Portland's Workforce Development Program by drawing unspent funds from Councilor Elana Pirtle-Guiney's office.
• Smith 1. Restoring $532,000 to the SummerWorks workforce training program by drawing from a cannabis tax reserve fund.
• Dunphy 1. Supporting Neighborhood Prosperity Networks with $197,000 previously proposed for the Office of Civic Life.
• Smith 2. Supporting the Inclusive Business Resource Network program by drawing $192,000 from a cannabis tax reserve fund.
• Koyama-Lane 2. Restoring $3.2 million to Urban Forestry by drawing from the Portland Clean Energy Community Benefits Fund.
• Novick-Morillo 1. Creating a City Data and Privacy Office by allocating $800,000 from various sources.
• Green 3 and Green 6. Providing $1 million for public bathrooms, free laundry, free showers, and other services for unhoused people by reducing support for camp removals.
• Pirtle-Guiney 2. Restoring $15,000 in after-school programming at community centers on the 8 in-service day closures by adding personnel costs.
• Koyama-Lane 7. Restoring $257,000 to Portland Parks & Recreation programs that support the fitness programs for seniors by drawing on funds from the Parks Levy and charges for the service.
• Dunphy 2. Restoring $157,000 to Small Arts Grants by reducing support for transition costs when new councilors are elected.
• Kanal 3. Transferring $450,000 from the golf contingency fund to support the Small Donor Elections Program.
• Dunphy 4. Restoring police desk clerks and youth outreach staff by pausing $1 million in cost-of-living pay increases and merit pay for higher-earning city employees.
• Koyama-Lane 6. Rebuilding a picnic shelter in Montavilla Park by drawing $755,000 from a Parks Levy.

Note: these summaries don't capture all the details of every amendment.

See the proposed amendments

(Note that this list does reflect late-breaking changes to some amendments.)

Changes to workforce

Testifying before council, Deputy City Administrator Tracy Warren estimated that job reductions in the newly approved budget would impact about 100 employees. This figure is only preliminary, however. City officers will need time to assess the cumulative impact of the amendments on services and staffing.

Financial crunch

Portland entered this year's budget cycle facing a record general fund shortfall of more than $160 million, a moment Mayor Wilson described as one where the City's balanced budget must "span farther, carry more weight, and bridge a deeper chasm than we have previously demanded of city government."

The deficit stems from years of lagging revenues, rising costs, and fiscal pressures shared across regional governments, leaving the City with fewer partnership opportunities than in previous years. The mayor's proposed budget outlined the difficult reductions required to close the gap while maintaining core public safety, shelter and park services.

The City maintains several reserves and contingencies to provide for multi-year projects, such as construction, as well as for unexpected events, such as unforeseen expenses or revenues that fall short of projections. For example, the sewer system operating fund includes a reserve in case vital components of the City's sewer system need urgent repair. These funds are critical factors in maintaining the City's credit ratings - which determine the interest rates the City has to pay on its bonds.

Make your voice heard

Here's how to share your feedback on the budget with the council:

• Comment on a specific budget item or the budget in general.
• Sign up to speak at the June 10 City Council Budget Committee Meeting. Virtual or in person.
• Sign up to speak at the June 17 City Council Budget Committee Meeting. Virtual or in person.
• Contact an elected official.