Portland City Manager Jon Jennings has proposed a $221.1 million municipal budget for the new next fiscal year with the hope, he said, that it begins to get the city back to pre-pandemic levels of service, staffing and revenue.
“As we set about our budget work this year, our goal was to come up with a measured and moderate budget; one that would have as minimal of a tax rate increase as possible, which was the guidance I got from many of you, but also one that would start the process of getting us back to where we were before the pandemic hit,” Jennings told the City Council Monday.
The proposed general fund budget is up $9.3 million, or 4.6%, over the current budget, but due to federal pandemic relief funding, the municipal tax rate is expected to decrease 4% from the current $10.75 to a $10.28 per $1,000 of assessed value.
Under the proposal, the owner of a $250,000 home in the city would pay $117.50 less in property taxes next year.
That decrease, however, could be negated by Portland Public Schools’ 2021-2022 school year budget’s increased reliance on tax dollars. That $125.2 million budget proposal, which was approved by the board of education last month, is up 4.4%, or $5.3 million, over this year’s $119.9 million school budget and would result in a 5.5% increase to the school tax rate. It will be presented to the council for first reading on Monday, May 3.
Without the $8.75 million in aid from the American Rescue Plan he is using in his proposed budget, Jennings said, the municipal tax rate for fiscal year 2022 would have increased by more than 4%.
Rebounding from the impact of the pandemic, in which the city lost an estimated $28 million in revenue, will take several budget cycles, Jennings said.
The city is expected to receive $48 million in American Rescue Plan funding over the next two fiscal years, Jennings said. He and Finance Director Brendan O’Connell have come up with a three-year plan that would use $8.75 million this coming fiscal year and between $5 million and $6 million in fiscal year 2023 (July 2022 to June 2023) and $2 million to $3 million in fiscal year 2023 (July 2023 to June 2024).
How to use the remaining federal funds between now and the December 2024 deadline to spend the money will be discussed at a workshop on June 25.
His budget, Jennings said, makes investments in several key areas, including health and human services, something that mayor Kate Snyder said is in line with goals the council outlined in December.
“The city of Portland continues to invest in social services, emergency shelters, public health and long-term health of our neediest individuals,” Snyder said, highlighting the additional $2.7 million that has been proposed for the health and human services department.
The increase in health and human services includes a $2.1 million increase in the social service budget to expand general assistance and add staffing and outreach at city-run homeless shelters.
Jennings said he is “proud that Portland is a city that is committed to being compassionate, one that goes above and beyond in taking care of its people. I’m also thankful for this commitment as it has been relied upon more than ever before due to the ripple effects of the pandemic.”
Investments in the budget would allow the public works department to bring staffing close to pre-pandemic levels by hiring additional engineers, as well as an island maintenance worker and project coordinator. It enables planning and urban development to proceed with the second phase of the ReCode effort and undergo a council-mandated historic district impact study. Also under the plan, the permitting and inspections department could hire new staff members needed to manage work required by the November 2020 citizen referendum around the new rent control and marijuana licensing ordinance;
The housing an economic development department would receive additional funding for the Office of Economic Opportunity to help new Mainers find employment. The parking division would get a boost in funds for parking garage maintenance and repair projects that were delayed last year. The technology department would be able to restore positions that were cut or furloughed last year, and the executive department would get funding to hire a communications specialist.
In total, the proposed budget restores the equivalent of approximately 21 of the 65 positions eliminated last year.
The proposal dials back funding for the parks and recreation department because revenues are not expected to rebound, especially for public event rentals. The city clerk’s office would also see a funding decrease because additional money was needed last year for the presidential election.
Budget drivers also include decreased costs for employee health insurance, but a 2% cost of living increase and other wage adjustments as outlined in city employee union contracts; an additional $2.65 million in debt service due to the first payment of the the Lyseth Elementary School renovation; a 5%, or $143,000, increase to the city’s contribution to Greater Portland METRO; a close to 2%, or $136,150 increase in the Cumberland County tax assessment and a $10.5 million decrease in anticipated excise tax revenue.
The council has passed the proposed budget to the the finance committee for review.
Overall, Snyder said the budget is “a reflection of our priorities and invests strategically” in rebounding from the coronavirus pandemic.
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