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City finance director presents fiscal‑impact estimate for proposed $20 minimum; projects 67¢ mill‑rate effect over three years
Summary
Finance Director Brendan O'Connell presented a fiscal impact memo on a proposed $20 minimum wage. Staff estimated a 67‑cent increase in the municipal portion of the mill rate over a three‑year period starting in FY27; an illustrative $500,000 homeowner impact was $333 over three years under staff assumptions.
The Finance Committee on June 18 reviewed a fiscal‑impact assessment prepared by city finance staff for a proposed $20 minimum wage measure.
Brendan O’Connell, the city’s finance director, told the committee that because of updated implementation dates there would be no fiscal impact in FY26. Under the staff assumptions, the estimated effect on the municipal portion of the mill rate is 67¢ over the three‑year fiscal‑impact window used for the memo (FY27 through FY29). O’Connell said that estimate would translate to roughly $333 for a homeowner with a $500,000 home when summed over the three years.
Methodology and assumptions: staff grouped city employees into wage bands (below $20, $20–$25, $25–$30 and above $30 per hour) using the most recently completed fiscal year. They noted many employees below $20 per hour are part‑time, seasonal or temporary (recreation, concessions, election workers). For employees in the $20–$25 and $25–$30 bands, staff assumed those workers would seek the same dollar‑amount increase in each year to maintain wage spacing relative to the new minimum; for employees above $30 staff assumed half those dollar increases. The memo also applied standard estimates for benefits and assumed routine COLA increases in subsequent years.
School district: Portland Public Schools staff told the committee they did not have a full set of comparable calculations for school employees above the $20 threshold; the school superintendent indicated no significant impact for employees currently under $20 per hour but the district had not completed the full banded analysis.
Timing: O’Connell said the FY27 impact is the first year that could show fiscal effects under the proposal; because the effective dates were adjusted, the city expects no FY26 budget exposure from the measure. Staff will supply the fiscal‑impact memo to the full Council; the Council will consider whether to place the measure on the ballot and related timing questions.
Next steps: the minimum‑wage fiscal note will be available to Council and potentially the public; Council members and staff discussed procedural timing needed to place a measure on the November ballot and agreed to track statutory deadlines. Public comment on the fiscal note and the Council’s ballot decision will be scheduled at the Council meeting where the item is considered.
