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Home›Tax Haven›City of Portland faces tough choices as it works to finalize budget, mayor says

City of Portland faces tough choices as it works to finalize budget, mayor says

By Judy Grier
May 3, 2022
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The City of Portland faces tough choices as officials scramble to close a $2 million gap in the proposed budget and set out a spending plan for the coming year, Mayor Kate said. Snyder to city councilors and members of the public Monday evening.

“We’re going to have to either raise taxes, cut services, both, or fundamentally change the way we do things, all in the context of us wanting to comply with our state’s general assistance obligation, and we let’s do it,” Snyder said. “We won’t stop, but we have tough choices to make.”

Snyder said she plans to bring a resolution to city council in the coming weeks asking for the support of a task force focused on developing solutions to the issues facing the city as it tries to plan and comply with its general support obligation. Under state law, municipalities are required to provide general assistance to people who are unable to meet their basic needs such as housing, food, and electricity.

The state is reimbursing 70% of those costs and the federal government is also assisting with reimbursements currently, which means ratepayers aren’t picking up on the big increase the city is seeing to pay for hotels and motels to house the homeless and asylum seekers. However, federal funds will expire at the end of June, posing a significant budget challenge for the coming year as the city experiences record numbers of people in need of shelter and services.

“We have a significant and time-limited opportunity before we meet here next year, looking at the fiscal year 2024 budget, to bring together federal, state, and local stakeholders to address structural and budgets we face as a city and as we seek to provide shelter and services to over 1,600 people each night,” Snyder said.

The mayor’s remarks at Monday night’s council meeting came as the city considers a $269 million budget proposal from interim City Manager Danielle West. West’s proposed budget, which was unveiled to council and the public last week, contains a 5.5% tax increase on the city side of the budget as well as a $2 million shortfall that the city ​​hoped to be compensated by an increase in the general budget. Reimbursement of assistance at the state level.

The council is considering whether to reduce or eliminate the use of hotels as emergency shelters, which would significantly reduce the general assistance budget; make $2 million in budget changes or increase the tax rate further; reassess the approach to homelessness and emergency housing; or a combination of these options to make up the shortfall.

“We’re really at a point where it’s not going to happen easily,” Snyder said.

West’s proposed 5.5% increase, combined with the Portland School Board’s approved $133 million budget, would result in an overall tax increase of 4.8%, or 62 cents over the current tax rate from $12.99. That would be a $226 tax increase on a $365,000 home.

The city’s budget increases are largely due to inflation and general assistance, and West said last week that she’s also looking to address ongoing staffing shortages by including increases in the cost of the life of 2 to 3% for employees. The city is considering raising parking rates in the Old Port and Commercial Street areas and increasing the cost of Pay-As-You-Throw trash bags to help generate revenue in other areas.

SCHOOL BOARD ASKED TO CUT $1 MILLION

Last week, members of the board’s finance committee recommended the school district cut its budget by $1 million after discussing whether the district could review federal funds from the American Rescue Plan Act to offset part of the increase in school taxes. The school board is due to consider the recommendation on Tuesday.

School board president Emily Figdor on Monday evening urged the board not to cut $1 million from the district’s budget and said it would not be viable to use one-time funding for ongoing expenses. She said the district is seeing a $2.6 million drop in state funding, largely due to an increase in Portland’s valuation, and unlike the city, the district is limited to the sole state funding and local taxpayers as sources of revenue.

“I understand that you feel particular pressure on the city budget, in part because the city serves a rapidly growing asylum seeker population, but you have just begun your budget process,” Figdor said. “You only heard from a few of your department heads. You haven’t had the opportunity to dig, probe and learn the details of your budget. It is premature to conclude where your budget will end up.

The city faced a tax rate increase of just under 1% last year, but a last-minute increase in public funding for schools allowed the district and council to approve a revised plan. that eliminated any tax increases in last year’s budgets. However, some residents still faced increases in their tax bills due to a citywide property reassessment.

The board is expected to gather additional public comment and vote on the school’s budget on May 16. Council is also scheduled to hold a first reading and public hearing on the city budget on May 16 and is expected to vote on the city budget on June 6. The school’s budget will go to a citywide referendum on June 14.


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