Portland budget holds the line on taxes, but requires layoffs

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With the city budget upended by the coronavirus pandemic, Portland city councilors on Monday night approved a spending plan that doesn’t raise taxes but requires 65 layoffs.

Councilors unanimously approved a budget that was slightly larger than what City Manager Jon Jennings proposed in August, after both the Finance Committee and City Council added amendments.

The result is a tax rate of $23.31 per $1,000 of assessed value for fiscal year 2021 – the same as the 2020 rate, and slightly larger than what councilors heard at their last workshop.

City Manager Jon Jennings, bottom of the screen, speaks during the City Council’s remote meeting on Monday, Sept. 20. Councilors adopted a nearly $257 million budget for fiscal year 2021 that doesn’t increase property taxes but does eliminate 65 city jobs. (Portland Phoenix/Colin Ellis)

Councilor Nick Mavodones, who chairs the Finance Committee, said many of the 65 city jobs being eliminated are already vacant, but there are still employees who will be laid off because of revenue shortfalls.

“Any budget is always an estimate,” he said. “This one may be more precarious.”

Councilor Belinda Ray, a member of the Finance Committee, proposed a handful of amendments to the budget, including successfully adding $56,000 for renting eight portable toilets for the city’s homeless to use. This is in response to complaints about people urinating and defecating in public, often in Deering Oaks Park.

Councilors also approved an amendment that will increase parking rates by 25 cents, which is estimated to provide $225,000 in revenue.

Ray said street parking is still considerably cheaper than parking in a garage, so raising the cost to $2 an hour was appropriate. She compared it to a “gas tax” that may ultimately help discourage people from parking downtown, in favor of walking or biking.

The amendment passed 5-4, with Councilors Spencer Thibodeau, Kim Cook, Mavodones and Mayor Kate Snyder opposed.

“This is very chancy,” Mavodones said, noting the pandemic has already been harmful to downtown businesses. “I think banking on parking revenue is sketchy at best. It’s well-intentioned, but we can’t bank on this.”

Jennings said he hopes this budget is a “one-year aberration,” and said it is the city’s preference to get back to a system of “modest” annual tax increases.

Councilor Justin Costa said the budget makes the best of a bad situation.

“This is a terrible budget and this is the least bad option,” he said.  

Jennings also said it is possible the city may have to come back to the council for further cuts if revenue projections don’t hold up, or if there’s a second wave of the coronavirus.

Other amendments added $150,000 for legal services for the upcoming Charter Commission and for contractual services for the recently formed Racial Equity Steering Committee, which will review the June 1 protest where police and protesters clashed.

The council removed $12,000 that had been earmarked for travel and food expenses for councilors, and after some discussion and a 5-4 vote, added $7,800 for stipends for members of the Racial Equity Steering Committee.

Ray said she heard several times from committee candidates that a stipend was needed, even though other boards and commissions don’t receive stipends. She called this “a unique circumstance,” noting that even though the work will be done remotely, people still have children who must be cared for or other work they may have to sacrifice.

Other councilors, however, disagreed.

Thibodeau said he understood the spirit of the amendment, but said he is a strong proponent of volunteer service. He said people do not join committees and commissions for money, and he assumes most people would consider that before applying to join one.

“Folks are putting forward a tremendous effort,” he said. “And we recognize people for their effort, we need people to step forward. When we start paying, I think we do start muddying it. The decisions we make do set precedents.”

Mavodones, Cook, Thibodeau, and Snyder opposed the amendment. Councilor Pious Ali, who serves on the committee, voted in favor but said it would not be right for him to accept the stipend.

Another Ray amendment returned two park positions to the budget, including a sustainability associate, for a total of around $110,000.

The total budget is $256.7 million, or nearly $7 million less than the current operating budget. It includes $202 million in general fund expenses and $108 million in non-property tax revenue. Prior to the pandemic, the city had been expecting that revenue to total $120 million.

The budget also includes the $119.9 million school budget voters approved in July.

Jennings had been prepared to propose a 1.8 percent tax increase before the pandemic forced the city to reset its financial expectations. Nearly every city department had to make budget cuts, including Jennings’s office, which took a 20 percent reduction. Almost every other department was asked to present a 5 percent budget cut, with Health and Human Services the only department that saw significant increases.

To offset revenue losses, the city has furloughed more than 600 employees over the last six months, which city officials said has saved up to $150,000 a week during the pandemic.

City Council favors June election for Charter Commission

Portland City Councilors rejected a budget amendment Monday that would have called for a special Charter Commission election.

The amendment would have added $38,000 to the budget for a special March 2021 election to fill the nine remaining seats on the commission.

Instead, councilors decided the best option for the vote is the regularly scheduled June election.

Councilor Kim Cook said she had hoped the election could have been held Nov. 3, but that became impossible because of the time required to allow candidates to circulate nominating petitions before the election.

“I’m not convinced March is significantly better than June given the cost,” Cook said, adding she was “disappointed” by the delayed guidance the council received early in the process. “I think March and June are both too late, but I’d prefer to save the extra funds.”

Brendan O’Connell, the city finance director, said the cost of a special election would have added one cent to the property tax rate.

Councilor Nick Mavodones said June was acceptable because city residents are accustomed to voting in June on the annual school budget, rather than “some random February or March” day.

Councilor Spencer Thibodeau said waiting until June makes sense, especially since the threat of COVID-19 probably isn’t going to be gone by March.

“I hope and pray we’ve got our arms around that by June,” Thibodeau said. “But quite honestly, we’ve got people who will be trying to knock on doors in wintertime. I think it makes all the sense to wait to June.”

Thibodeau said he recognized this is not the outcome many people wanted. But he said the country is “about to have one of the most important elections in November,” and adding another important election in the middle of winter didn’t make sense.

Mayor Kate Snyder said a November election just wasn’t a possibility given the timeline constraints. She said March is one of the state’s snowiest months, so she worried about people being able to access the polls. She also said a June election gives more time for candidates who may not have a lot of name recognition to be able to build support.

“I know it’s not ideal or perfect,” Snyder said. “But it’s just a few more months.”

The creation of a 12-member Charter Commission was approved by voters in July. Three council appointees have already been named, and the remaining members will be elected in the same manner as city councilors and School Board members: one from each of the city’s five voting districts, and four at-large members.

— Colin Ellis