The city of Portland is expecting a challenging budget year as it continues to grapple with an influx of asylum seekers in need of shelter, inflation and revenue sources that haven’t completely recovered since the coronavirus pandemic hit.

“We’re facing some incredibly big challenges that we’ve never really felt before,” said Finance Director Brendan O’Connell during a meeting with the City Council’s finance committee last week. “A number of my staff have been here for 20-plus years and this is the most challenging budget they’ve seen.”

Interim City Manager Danielle West is expected to unveil her proposed budget at the April 11 council meeting. The budget is typically adopted in May or June around the same time the school budget goes to a voter referendum. Superintendent Xavier Botana is proposing a $132.9 million school budget that includes a 4.1 percent increase in the school portion of the tax rate.

The current city budget is $212.2 million, a little less than half of which is funded by taxes, while the school budget is $126.5 million and almost 80 percent comes from taxes. The tax rate is $12.99, which for the owner of a $365,000 home amounts to $4,741 in taxes. The proposed school budget would add 28 cents to the tax rate and $102 to the annual tax bill on the $365,000 home.

At the finance committee meeting, O’Connell said the challenges the city is facing include an influx of asylum seekers from African countries that the city has been sheltering in hotels for the past several months. During the week ending March 19, the city was housing 624 people in hotels and another 63 people at its family shelter. An additional 266 people were served that week at the city-run Oxford Street Shelter.

Currently, the city is being reimbursed 70 percent of the cost of emergency housing by the state and the remaining 30 percent by the federal government using Federal Emergency Management Agency funds authorized to help communities respond to the pandemic. The federal funding has been renewed twice and is currently set to expire July 1.


A bill before the Maine Legislature sponsored by Rep. Michael Brennan, D -Portland, seeks to increase the state reimbursement up to 90 percent starting in July. “I can’t emphasize how important that bill is going to be for the state and for Portland and for all of our neighbors where these asylum seekers are staying,” O’Connell said.

“That’s going to be a critical piece of the budget. Just the increase we might see if the city had to shoulder 30 percent of this burden by itself would be a much higher tax rate increase than I think anyone would be willing to accept here in the city and we might have to cut services.”

Inflation is another challenge, particularly around the wages needed to attract workers. “One example is in solid waste,” O’Connell said. “We haven’t been able to fill our solid waste, our trash collection positions. We’ve had to outsource that at significantly higher costs. We’re trying to attract folks into these vacant positions, but we’ve had to raise wages higher than inflation just to remain competitive.”

Some revenue sources also haven’t recovered since the onset of the pandemic, though there are areas where the city is seeing improvement. Parking revenues, for example, are “doing fantastic,” O’Connell said. “People are visiting downtown in record numbers and we’ve started to see people return to garages.”

Concerts and events are returning to normal and the city’s parks department is also doing well with revenues. But cruise ship revenues have not bounced back. “With omicron creating a new wave this past fall, cruise ships have had trouble booking passengers,” O’Connell said. “We have a reasonably decent slate of ship arrivals scheduled for this year but I believe not all those ships will actually come into port. The bounce-back in cruise ship revenues has really been a lot slower than we anticipated.”

City councilors and Mayor Kate Snyder on Friday echoed O’Connell’s concerns.


“I do believe it will be a very tough budget year,” Snyder said. “I think that, like on the school side, we have significant pressures related to wage competition, inflation, the cost of fuel and the cost of goods.”

She said the council also realizes those costs are impacting residents and their ability to shoulder a tax increase. “We’re certainly feeling it at the gas pump, the grocery store and with heating fuel,” Snyder said. “I think any appetite for an increase is something we will have to really work to understand.”

Councilors last week also received an update from Botana and members of the school board on the school budget. Councilor Mark Dion, who chairs the finance committee, said the school budget is conservative given the challenges of inflation and cost of living increases. “It appears they did their best to contain costs given this inflationary period we find ourselves in,” he said.

But there was also a tense moment at last week’s meeting when Councilor Tae Chong asked the superintendent if the number of students who attend school or are absent each day impacts the budget. When Botana told him it doesn’t, Chong said he had been told otherwise by a state lawmaker and another school administrator. He proceeded to ask further questions about attendance until Dion stepped in and said he wanted to redirect the meeting to its focus on budget information.

Chong later apologized, but said he was frustrated because he had met with Botana along with University of Southern Maine President Glenn Cummings and Educate Maine Executive Director Jason Judd last winter to talk about building on the school district’s equity work. The meeting came after Chong last fall wrote a column in which he said the city’s schools are “broken for students in poverty and for Black and brown students.”

Chong said there were a number of proposals that wouldn’t cost the district that came out of the meeting, but they never came to fruition. “If the community is trying to offer up help to improve our programming and they could be free or come from other revenues, I’m wondering … how can the community help?” Chong said.

Botana, in an email Friday, said two of the proposals Chong mentioned, for an ELL certification program and a mentoring program involving USM students, are works in progress though he said he had never heard of a third proposal for a walking school bus with a donation from Hannaford.

Councilor Roberto Rodriguez said he is thankful for the budget presented by the superintendent. “There aren’t any huge new investments,” Rodriguez said. “It’s a budget that tries to reaffirm what we’ve done over the last several years and it also recognizes the financial challenges we have from the municipal side as well.”

Rodriguez said it’s still too early to know what the city might settle on in terms of an overall tax increase. “We have a couple things we’re still waiting to find out about, including Rep. Brennan’s bill to increase our (General Assistance) reimbursement from the state. Hopefully that follows through, but we are obviously looking at really difficult decisions.”

Related Headlines

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.