Multnomah County projects $21.2 million FY26 general‑fund gap; officials point to property‑tax and PERS pressures

Multnomah County budget staff on Tuesday told the Board of Commissioners the county faces a $21.2 million starting deficit for fiscal year 2026 and that preserving current service levels will require roughly $30.4 million in new revenue.

"Our updated starting point for 26, we anticipate to be a $21,200,000 deficit," said Jeff Renfro of the county Budget Office. He added that property taxes — about two‑thirds of discretionary general fund revenue — are only expected to generate about $8,000,000 of new revenue in the coming year, creating the primary shortfall.

The projection is part of a five‑year forecast that, under a status quo expense trajectory, would see the shortfall grow to an estimated $52.4 million by 2030. Renfro told the board that Oregon's PERS (Public Employees Retirement System) rate changes and personnel cost growth are key drivers of rising expenses. "This is really where we're gonna have to do our our hardest work," he said about FY26.

Why it matters: the general fund provides discretionary dollars for core safety‑net and public‑facing services; budget decisions next winter and spring will determine which programs the county can sustain. Renfro said the county must legally balance its FY26 budget and that doing so will change the trajectory of future expenses, easing later‑year pressures depending on choices made this cycle.

Revenue considerations: Renfro flagged several updates to the current‑year forecast. He said the county is increasing its property‑tax forecast by $1.8 million and has incorporated stronger motor‑vehicle rental tax receipts (nearly $2 million) as an ongoing assumption because of higher rental prices and airport recovery. By contrast, the county reduced its US Marshals revenue assumption by $2 million after average daily bed use fell to the teens, from historical averages near 95.

Expense drivers: personnel costs represent nearly two‑thirds of the general fund, Renfro said, and the forecast assumes a 5.72% increase in personnel costs for FY26 (a 2.7% cost‑of‑living adjustment plus an estimated 2.62% PERS contribution increase). He also warned that several large union contracts are open and that prior rounds of bargaining added roughly $18 million in ongoing expense when multiple contracts were negotiated simultaneously.

Concentration and volatility: business income tax (BIT) revenue — roughly 26% of discretionary general‑fund revenue — has recovered and is forecast to grow, but Renfro emphasized its concentration: the top 10 payers typically provide 15–20% of BIT receipts and the top 300 around 60%, leaving the county exposed to large swings if major payers change profitability or location.

Next steps: staff outlined a budget calendar that begins with the chair's proposed budget release on Dec. 6, department submissions on Feb. 14, and a statutory adoption deadline in mid‑May. The board and staff will use scenario planning and updated data — especially on property values and PERS assumptions — as they develop balancing choices.

The board did not take formal votes on any policies during the briefing; staff said they will return with detailed options and memos that disaggregate underspending and one‑time resources in the coming weeks.