Portland’s city manager unveiled a general fund budget of $269 million on Monday amid several challenges including rising inflation, an influx of asylum-seeking families in need of shelter urgency and persistent staff shortages.
“Overall, I think it’s a reasonable budget considering everything we’re up against,” acting city manager Danielle West said during a city council meeting Monday night.
West’s proposed budget, which is now up for review by the council’s finance committee, includes a 5.5% landside tax rate increase. In conjunction with a proposed school district tax rate increase of 4.1%, the combined tax rate increase would be 4.8%. That would represent an increase of about 62 cents on the current tax rate of $12.99, or a tax increase of $226 on a $365,000 home.
The $269 million does not include an additional $65 million for self-funded corporate accounts, such as the Portland International Jetport and sewer and stormwater fees, bringing the total budget excluding school expenses to $334 million.
The general fund, which serves as the basis for the tax levy, is up nearly 27% from the current year’s $212 million, though that doesn’t include the additional $20 million the council approved on an emergency basis this month to cover increases to the city’s general assistance budget due to the large number of asylum seekers arriving in Portland.
General assistance expenses will be reimbursed by the state and federal government this year, although part of the challenge with next year’s budget is that federal reimbursement dollars, currently covering 30% of emergency housing, are due to expire at the end of June.
GA BUDGET INCREASE
“(The General Assistance budget) has been a big driver in this budget process and one of the hurdles on top of the 7-8% inflation we’re facing right now,” West said.
In a memo to council sent ahead of Monday’s meeting, West said the city is currently providing shelter for 1,602 people overnight using its Oxford Street and family shelters and hotels in six communities. She said increases to the Department of Health and Human Services budget account for nearly 80% of the city’s total budget increase.
“It is currently projected that the annualized cost of providing additional hotel rooms just to those who have already reported to the Portland AG office will now exceed $45 million, more than double the HHS budget for the city in a single year,” West wrote in the memo. . “Of course, this figure does not take into account future arrivals, and the city has seen almost 100 people arriving per week over the past month, so the cost could continue to increase significantly in the coming months.
On Monday, the city learned it would be eligible for part of $10 million in one-time public funding to meet emergency housing needs for the homeless. Governor Janet Mills also included $22 million in her supplementary budget to create an emergency housing relief fund in MaineHousing to help address homelessness.
West said the state could have done more to help the city, especially with general assistance reimbursement rates, but the one-time funds and $22 million for emergency housing should help. some relief.
“I know everyone, especially our legislative delegation, our lobbyists, our staff and others worked very hard to try to get everything we could,” West said. “We just haven’t gotten everything we could, so we have to try to find ways to move forward and fill the gap that we have left. We will do that with the finance committee over the next weeks. “
The budget presented Monday does not include any loss of full-time equivalent employees, and West said she is trying to be mindful of the staffing challenges the city faces. The city currently has nearly 250 vacancies out of a staff of 1,400, including director of economic development, chief of police and chief executive.
“It was a priority of mine to try to find ways to retain employees,” West said, adding that it included cost-of-living increases ranging from 2 to 3 percent for union and non-union employees. .
The budget also includes funding for some of the board’s staffing priorities, including $150,000 for the creation of a Diversity, Equity and Inclusion Office and additions to the staff of the Office of sustainability.
To help generate revenue and offset costs in other areas, the proposed budget includes increases to parking rates in the Old Port and Commercial Street areas, which would increase from $0.50 to 2, $50 per hour, and a $0.50 increase in the cost of the purple service Pay-As-You-Throw trash bags, which currently cost $1.50 for a 15-gallon bag or $3 for a 1-gallon bag. 30 gallons.
Other items that will help offset costs include $5.5 million in American Rescue Plan Act funds used for revenue replacement and a planned $2 million increase in state revenue sharing. .
The budget now heads to the council’s finance committee, where West said more work will be done to address current challenges. “It has been a very difficult and challenging, but very rewarding process and I appreciate all the work the city staff do on a daily basis,” she said.
Mayor Kate Snyder, who was not at Monday’s meeting, is expected to present her comments on the budget at next week’s council meeting.
“We all know this year is going to be tough,” Councilor Tae Chong said. “People need to understand that inflation is 8.5% and we are looking for a 5.5% increase and as the city manager said we are trying to keep people on our staff. … We’re trying to keep the city running, and running as well as it does.
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