The following is an update on the County’s five-year economic outlook delivered in November 2018.
The American economy is still booming, but Multnomah County continues to face a significant budget gap thanks to inflation, Public Employee Retirement System costs and limited revenue. That was the message at Tuesday’s board meeting as the Multnomah County’s budget experts delivered an update on the County’s five-year general fund forecast.
The good news? The projected deficit for fiscal year 2020 has declined from $5.9 million to $3.6 million. The bad? The County still faces a $35 million gap over the next five years.
“We still end up at the same point in five years, and that is we will be facing about a $35 million or 5 percent gap,” Mike Jaspin, the County’s budget director, said. “We can just cut at a slightly slower rate in the next couple of years.”
The reason for the slightly lower deficit: adjustments to the County’s business income tax forecast. Business income tax revenue is expected to steadily increase over the next 15 years. But that doesn’t solve the real problem, which is Multnomah County’s structural deficit.
Currently the cost of providing services is rising faster than the money that’s available. Multnomah County receives the bulk of its revenue from property taxes. But 1990s ballot measures prevent the County from collecting property taxes based on homes’ real market value. To continue to serve the most people with the limited money that’s available, the County needs to trim costs.
“Given what the forecast shows, we need to keep focused on the long term, whether that is finding more revenue or structuring the programs we will be able to fund long term in a sustainable fashion,” Jaspin said.