In a Nov. 5 board meeting, Multnomah County Budget Director Christian Elkin and Multnomah County Economist Jeff Renfro shared an updated five-year budget forecast with the Board of Commissioners, centering on the COVID-19 pandemic’s effects on County revenues.
Though the pandemic is forecast to cause an immediate budget deficit of just under $9.2 million in Fiscal Year 2022, County budget experts expect a full recovery by FY 2024 and a significant budget surplus of $47.4 million by FY 2026.
According to Renfro, in FY 2021, Multnomah County used $19 million in one-time-only resources to fill a funding shortfall during the pandemic. Renfro says County officials hoped revenue would recover by FY 2022 as businesses reopened.
But even though economic recovery from the pandemic has been quicker than most economists anticipated, it was not enough to increase revenues to cover ongoing expenses. And yet, despite any short-term deficits, Renfro remains optimistic about the County’s long-term revenue recovery.
“We are assuming some significant motor vehicle rental tax recovery and also dissolution of some large Urban Renewal Areas in the Portland area,” he said at the meeting, noting both “are going to add quite a bit of property tax revenue to the forecast.”
Renfro also covered employment impacts for specific groups during the forecast. Women and people from Black, Indigenous and People of Color (BIPOC) communities were most severely affected by pandemic-related layoffs, with female workforce participation dropping to just 55 percent.
Renfro attributes the decline in female workforce participation to the “new normal” of online school, where many parents have been forced to act as caretakers and tutors for their children, as well as the large share of female employment in some of the worst-hit industries.
“If you look at survey data, the division of labor in the American household is changing pretty rapidly, but women still do more of the household work and more of the childcare than their counterparts,” he said. “It seems likely, as children are having to stay home from school and do remote learning, that women have been disproportionately staying home with their children and dropping out of the labor force.”
As County budget experts continue planning for FY 2022, significant uncertainties remain, notably the timing and scope of additional federal assistance.
“A significant uncertainty right now is the election results. A couple of weeks ago, when the polling suggested Democrats would have control of the House, Senate and presidency, economic forecasts expected some pretty significant stimulus after they all took office,” Renfro said. “Now with what looks like split control of the Senate and the presidency, that picture looks a lot murkier.”