Multnomah County, OR. Multnomah County is facing a new round of budget challenges as updated financial projections show a $10.5 million general fund shortfall for Fiscal Year 2026–27. The forecast, presented Thursday, Nov. 13 to the Board of County Commissioners, warns that without significant intervention the deficit could grow to $33.8 million by FY 2029–30 before tapering to $15 million in FY 2030–31.
If realized, the deficit would mark the second consecutive year in which the county must confront a major general fund imbalance. The Board previously closed a $15.5 million gap for the current fiscal year, while also enacting midyear reductions after the county received less state and federal funding than anticipated and saw declining revenue from the region’s homeless services tax.
County Economist Jeff Renfro attributed the worsening forecast to the erosion of the county’s largest discretionary revenue source: property taxes. Residential values remain steady, but Portland’s commercial market, especially downtown, continues to deteriorate as employers adjust to remote work. Some buildings are now valued at less than half their 2019 real market value, and owners are increasingly seeking reassessments that will permanently reduce assessed values and long-term tax collections.
Renfro noted that he had previously expected commercial values to reach bottom in FY 2025–26, but current models show the downturn persisting into at least FY 2026–27.
At the same time, county expenses continue to rise. Personnel costs, two-thirds of all general fund spending, are climbing due to cost-of-living adjustments in labor contracts, inflation-indexed compensation, and growing contributions to the Oregon Public Employees Retirement System. Every one-percent increase in base pay adds roughly $4.1 million in spending, and each percentage point increase in PERS rates adds another $2.9 million.
With thousands of employees represented by unions now in active negotiations, Renfro said additional cost pressure is likely.
Other pressures include slowing employment in the Portland metro region, which remains one of only five major U.S. metropolitan areas losing jobs. Limited new development, stagnant business investment, and the continued drag of the downtown office slump all contribute to weaker-than-expected growth.
Though domestic travel through Portland International Airport is recovering, it remains just shy of pre-pandemic levels.
The county’s general fund represents about 25 percent of its broader $4 billion budget. Restricted funds, including state and federal pass-through dollars and Metro voter-approved taxes like Supportive Housing Services and Preschool for All, cannot be redirected to help close the shortfall.
Budget deliberations for FY 2026–27 will begin in November and continue through spring, with final adoption expected in June 2026. County leaders signaled they will evaluate a mix of service changes, program reductions, and financial strategies to protect essential operations.
Public work sessions and hearings will be posted on the county’s budget website as the process begins.
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