Portland officials Tuesday revealed early warning signs of a sizable shortfall for the city’s budget next fiscal year as taxes and fees that pay for essential municipal services are projected to shrink amid local economic headwinds.
The City Budget Office estimates a general fund deficit of at least $66.9 million, according to a new revenue forecast, a figure that could increase further in the coming months.
That amount is equivalent to about 8.4% of the projected $795.5 million needed next year to cover the fund’s anticipated expenses, the analysis shows.
The city’s general fund primarily supports police, fire, parks and homeless services. It also pays for a bevy of popular initiatives including gun violence prevention programs, commercial sidewalk cleanings, litter collection and graffiti removal.
“Portland is not alone in facing these forecasted funding challenges,” City Economist Peter Hulseman said in a statement. “Communities across the U.S. are seeing slower revenue growth and rising costs, and Portland’s forecast reflects similar trends.”
Tuesday’s revenue forecast did not look at potential funding shortfalls in other service areas such as transportation, permitting and water and sewers.
Nor does it account for the tens of millions of dollars the city received on a one-time basis last year from Multnomah County, the state and Metro to help fund Mayor Keith Wilson’s plan to open new overnight shelter beds and keep Portland’s existing outdoor shelters open.
According to the forecast, the city is projected to see steep declines in revenue that comes from Portland’s business license taxes ($20 million), utility license and franchise fees ($9 million), property taxes ($7.7 million) and transient lodging taxes ($6 million), among other sources.
Federal tax cuts championed by the Trump administration, a drop in the city’s population during the pandemic, as well as declining job activity and development have all contributed to Portland’s revenue challenges, Hulseman said.
“Across the three main local indicators — employment, population change, and housing — Portland has essentially been in a recession since 2023,” he wrote.
In addition, budget officials expect to see a host of rising city expenses that will further strain the general fund, including more than $10 million in health care and cost-of-living adjustment increases, the analysis shows.
City budget officials plan to update their forecast in February and April.
Last year, officials initially predicted a $27 million general fund shortfall for Portland, a figure that later climbed to $100 million. That in turn ignited a bruising budget season this past spring that culminated in a mix of layoffs and fee increases to balance the books.
©2025 Advance Local Media LLC. Visit oregonlive.com. Distributed by Tribune Content Agency, LLC.
King County dams holding as rains continue to pummel region
Patrick Malone / The Seattle Times (TNS)
An atmospheric river on Tuesday continued to swell rivers, topple barriers, shave roadways and force evacuations. But through it all, two major dams in King County have done their jobs to protect Western Washington.
Seattle-based U.S. Army Corps of Engineers spokesperson Shelia Fourman said both the Howard A. Hanson Dam, 35 miles east of Tacoma, and the Mud Mountain Dam, southeast of Enumclaw, are “currently operating as designed.” Two other dams that are being closely monitored by the Washington State Department of Ecology appear stable.
The Howard A. Hanson Dam began operating in 1962 for flood control. It provided a bountiful safe haven in the lower Green River Valley and Duwamish River Valley leading up to Elliott Bay, a zone where 200,000 people now live and work, including agricultural areas around Auburn and Kent. The area is home to one of the largest networks of warehouses and distribution centers on the West Coast, according to King County’s 2024 flood management plan.
If the Hanson Dam failed, that could all be washed away. So when concerning conditions were discovered during a similar atmospheric river event in 2009, flood control improvements were made to the dam.
“A failure of the Howard Hanson Dam would produce devastating consequences to the regional economy,” according to the 2024 King County flood management plan. “Major employers such as Boeing, REI, distribution centers for Amazon and Walmart, and many other companies that comprise the second largest warehouse and distribution network on the west coast would be impacted by a dam failure, along with major roadways and rail lines, municipal offices, and an array of other important infrastructure.”
The risk of failure at the Hanson Dam appears low at the moment, Fourman said Tuesday afternoon. As of 9 a.m. Tuesday, the dam was at 43% of its capacity, and its water level had dropped 26 feet since last week. The dam hit a record 74% capacity on Friday.
The Corps of Engineers, which reduced flow over the weekend, has “a small range of flexibility” to release water from the reservoir while still abating flood risk, Fourman said.
“We are constantly evaluating changing conditions as atmospheric river storms stack up one behind another,” Fourman said. “But the risk of dam failure has not changed.”
The corps on Tuesday reduced flow from the Mud Mountain Dam, after a military-grade barrier was breached by the White River overnight in the city of Pacific, causing evacuations.
Fourman said releases from the Mud Mountain Dam did not cause the breach in Pacific. Rather, “sustained high flows in this unprecedented flood event do stress the rivers and the infrastructure around them.” At the time of the breach, flows from the Mud Mountain Dam were lower than they had been for several days prior, Fourman said.
“We are tracking the situation at Pacific as it relates to outflows from Mud Mountain Dam, said Travis Ball, Corps of Engineers Seattle District chief of hydraulic engineering. "After being notified of the breach, we reduced outflows at Mud Mountain Dam to help support repair efforts and response actions. That reduced outflow will remain in place until we receive confirmation from our ground crews and emergency management partners that conditions are safe to resume normal flood operations.
Department of Ecology spokesperson Andrew Wineke said in an email Tuesday that conditions remain stable but are being monitored at the Lake Sylvia Dam near Montesano in Grays Harbor County and the Tortorice Dam on private property near Sultan in Snohomish County.
Cracks were discovered earlier this year at the Sylvia Dam, and it has been monitored by the state throughout the recent storms. “There have been no changes in the structure that would cause us to have concern about dam failure at this point in time,” Wineke said.
The Tortorice Dam has been the subject of repeated site visits from Department of Ecology staff since its spillway clogged with debris. The property owner installed a pump, which so far is keeping water from overtopping the dam, Wineke said.
“Residents should stay vigilant and know that dams and levees can reduce flood risk but not eliminate it,” Fourman said.
© 2025 The Seattle Times. Visit www.seattletimes.com. Distributed by Tribune Content Agency, LLC.
