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Board approves amendment to City of Portland IGA so county can be billed for actual Preschool for All administrative costs
Summary
Multnomah County voted to amend its intergovernmental agreement with the City of Portland to raise the administrative 'not to exceed' cap so the city can allocate the county's proportion of actual Preschool for All tax administration costs; the change would raise the cap to $9.8 million and require a FY26 budget modification of roughly $553,000 from the Preschool for All fund.
The Multnomah County Board adopted an amendment to the county's intergovernmental agreement (IGA) with the City of Portland governing administration of the Preschool for All personal income tax.
Eric Arellano, the county's chief financial officer, explained the amendment responds to a mismatch between initial cost estimates and actual collections: preschool tax receipts have been about 52% of total personal income tax collections rather than the 47% estimated in 2021. That difference, Arellano said, created an "artificial cap" that prevents the city from billing the county for the county's share of actual administrative costs. The proposed amendment raises the IGA not‑to‑exceed amount to $9.8 million beginning in fiscal year 2026 and adds CPI indexing to reflect annual cost growth.
Arellano said if the board approves the IGA change, he will return with a budget modification to raise the FY26 administrative appropriation from a budgeted $6.8 million to an estimated $7.3 million — a roughly $553,000 increase funded from the Preschool for All fund balance, not the general fund. Arellano warned that declining to approve the amendment could disrupt services if the city had to reduce administration to match the existing cap.
Commissioners raised technical questions about indexing and funding sources, and several members thanked Arellano for briefings. The board approved the resolution. Arellano said he will return with a separate budget action to implement the FY26 appropriation change.
