The city of Portland faces difficult choices as officials work to resolve a $2 million gap in the proposed budget and set a spending plan for the coming year, Mayor Kate Snyder told city councilors and members of the public Monday night.

“We’re either going to have to raise taxes, cut services, both or fundamentally change the way we do things, all within the context of we want to comply with our state’s General Assistance obligation, and we do,” Snyder said. “We won’t stop, but we do have some difficult choices to make.”

Snyder said she plans to bring a resolution to the City Council in the coming weeks asking for support for a task force focused on developing solutions to the issues the city faces as it tries to plan for and comply with its General Assistance obligation. Under state law, municipalities are required to provide General Assistance for people who are unable to cover their basic necessities such as housing, food and electricity.

The state reimburses 70 percent of such costs and the federal government is also assisting with reimbursements currently, meaning taxpayers aren’t shouldering the large increase the city is seeing to pay for hotels and motels to house the homeless and asylum seekers. However, the federal funds will expire at the end of June, posing a significant challenge for the coming year’s budget at the same time the city is seeing record numbers of people in need of shelter and services.

“We have an important and time-limited opportunity before we’re here again next year, contemplating the fiscal year 2024 budget, to convene stakeholders from the federal, state and local level in order to address the structural and budgetary challenges we as a city face and as we seek to provide shelter and services for over 1,600 people each night,” Snyder said.

The mayor’s remarks at Monday night’s council meeting came as the city is contemplating a proposed a $269 million budget from Interim City Manager Danielle West. West’s proposed budget, which was unveiled to the council and the public last week, contains a 5.5 percent tax increase in the city side of the budget as well as a $2 million shortfall that the city had been hoping would be filled by an increase in General Assistance reimbursement at the state level.


The council is looking at whether to reduce or eliminate the use of hotels as emergency shelter, which would significantly lower the General Assistance budget; make $2 million in changes to the budget or further increase the tax rate; reassess the approach to homelessness and emergency housing; or some combination of those options to address the shortfall.

“We really are at a point where this isn’t going to happen easily,” Snyder said.

West’s proposed 5.5 percent increase, taken in conjunction with the Portland school board’s approved $133 million budget, would result in an overall tax increase of 4.8 percent, or 62 cents on the current tax rate of $12.99. That would be a tax increase of $226 on a $365,000 home.

The increases in the city budget are largely being driven by inflation and General Assistance, and West said last week that she also sought to address persistent staffing shortages by including cost-of-living increases of 2 to 3 percent for employees. The city is looking at increasing parking rates in the Old Port and Commercial Street areas and increasing the cost of Pay-As-You-Throw trash bags to help drive revenues in other areas.


Members of the council’s finance committee last week recommended the school district reduce its budget by $1 million after discussing whether the district could look at federal American Rescue Plan Act funds to offset some of the school-side tax increase. The school board is scheduled to take up the recommendation Tuesday.


School board Chair Emily Figdor asked the council Monday night not to cut $1 million from the district’s budget and said it would be unsustainable 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 only state funding and local taxpayer dollars as revenue sources.

“I understand you’re feeling particular pressure on the city budget, in part due to the fact the city is serving a rapidly increasing population of asylum seekers, but you’ve just begun your budget process,” Figdor said. “You’ve heard from only a couple of your department heads. You haven’t had an opportunity to dig in, probe and learn the details of your budget. It’s premature to conclude where your budget will end up.”

Last year the city was facing just under a 1 percent increase in the tax rate but a last-minute increase in state funding for schools allowed the district and council to approve a revised plan that eliminated any tax increase in last year’s budgets. Some residents still faced increases in their tax bills however due to a city-wide property revaluation.

The council is scheduled to take additional public comment and vote on the school budget on May 16. The council also is expected to hold a first read and public hearing on the city’s budget on May 16 and is expected to vote on the city budget June 6. The school budget will go to a city-wide referendum June 14.

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