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City economist flags business‑license tax shortfall; staff propose earlier 2026‑27 budget calendar
Summary
City economist Peter Holzman told Portland councilors that business‑license tax volatility contributed to a $12.7 million shortfall in 2024–25 and could restrain revenue growth going into 2026–27. Staff proposed an accelerated budget calendar with a February enterprise briefing and an April 20 target for the mayor’s proposed budget.
Portland’s city economist and budget staff told councilors on Oct. 22 that a shortfall in business‑license tax collections was a principal driver of reduced one‑time resources in the fall Technical Adjustment Ordinance, and staff outlined a proposed, earlier timeline for the 2026–27 budget.
Business‑license tax shortfall
City Budget Director Ruth Levine briefed councilors that “BLT came in 12,700,000 below forecast” for fiscal 2024–25, a shortfall that contributes to the reduced available one‑time funds in the fall TAO.
City Economist Peter Holzman explained how the business‑license tax (BLT) works and why it can be volatile. He described BLT as a 2.6% tax on net income (profits) sourced to Portland consumption; the tax’s payments are concentrated among a small number of filers, which makes collections sensitive to changes in corporate profits and taxpayer behavior.
Holzman told the council that two broad factors drive BLT volatility: - Underlying tax liability (what businesses actually owe based on profit activity); and -…
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