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City economist: HR 1 contributed most of this year's shortfall; five-year forecast remains balanced under current appropriation policy
Summary
City economist Peter Holzman told the Portland City Council that a recent state tax change known as House Resolution 1 reduced city business-license tax receipts enough to turn a projected surplus into a current-year shortfall; the five-year forecast is balanced on current appropriation levels but gaps appear under current service assumptions.
City Economist Peter Holzman presented an updated five-year general fund forecast and told the Portland City Council that a state tax change he labeled House Resolution 1 (HR 1) largely explains a current-year shortfall.
Holzman said the Legislative Revenue Office estimated HR 1's statewide impact at about $362 million and that, by his analysis, the change translated to roughly $21.4 million for the city this fiscal year. "Based on these estimates, had HR 1 not become law after the April 2025 forecast, there would be no current year deficit," Holzman said during his slide presentation.
Holzman framed the forecast with an explicit reminder that the forecast follows the council's financial policy: it models current appropriation levels (CAL), not current service levels (CSL). "My forecast by…
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