Multnomah County library district projects $2.3 million FY27 deficit as post‑bond costs rise

Multnomah County library officials warned the Board of Commissioners on March 3 that Fiscal Year 2027 will be a stress test for operations as the library brings all 19 locations fully back online and absorbs higher post‑bond operating costs.

Annie Lewis, introduced as the county’s director of libraries, said the FY27 forecast shows a $2.3 million deficit and reflects a convergence of slower property‑tax growth, sustained wage and benefit inflation and updated internal service charges for facilities and IT. "You can see the forecasted $2.3 million deficit in FY27," Lewis told the board.

Why it matters: the district’s revenue is overwhelmingly property tax, and Jeff Renfro, the county economist, told commissioners that recent and expected declines in assessed‑value growth — combined with the end of large urban renewal (URA) contributions — reduce the budget cushion the district previously relied on. "Almost all of the district's revenue comes from property tax generated by the library's independent taxing district," Renfro said, noting that earlier URA windfalls (Interstate, Macadam, et al.) are largely exhausted.

The primary cost pressures are personnel and internal services. Katie Shaefer, the library finance and facilities director, said roughly two‑thirds of the budget is personnel and that FY27 personnel costs are about $5 million higher than projections made a few years ago because of sustained inflation, minimum wage increases and higher PERS and health‑care costs. Lewis added that the median budgeted wage for a library staff position has risen about 32% in five years while assessed property tax revenue rose about 23% in the same period, widening a structural gap between revenues and expenses.

Facilities and IT internal service rates are also rising as renovated and new buildings open. Staff said facilities costs could rise roughly 15% year‑over‑year in FY27 as buildings such as the new East County Library come online, and IT internal service costs may jump further in FY28 when device counts for newly opened locations are included.

How staff plan to respond: presenters said their model assumes holding the levy at $1.22 in FY27 and moving to the voter‑approved maximum of $1.24 in FY28 — a 2‑cent increase they estimate will generate about $2 million — which helps return the forecast to surplus in FY28–FY29 under current assumptions. Staff cautioned, however, that PERS amortization pressures could push the budget back into deficit around FY30.

Fund balance and capital needs: the briefing noted a healthy district capital fund (about $73 million in the FY26 adopted budget) built in part from underspending during bond closures. Staff emphasized the fund’s importance for future life‑cycle replacements and long‑term capital needs, particularly for Central Library, and said they will use fund balance for limited‑duration positions, interim facilities and equipment lifecycle costs while they continue refining operating assumptions.

Board reaction and next steps: commissioners asked for more detail and cross‑jurisdictional coordination should the county consider future bond or levy measures. Lewis and finance staff said they will return in May with the proposed FY27 budget and additional analysis on staffing, internal service rates and longer‑term fiscal strategies.

The briefing did not include any formal votes. The library team said the May budget presentation will outline specific near‑term actions and follow‑up items for the board to consider.