On Thursday, Oct. 30, the Board of County Commissioners approved a budget modification that partially closes a $28 million funding gap in the Homeless Services Department’s FY 2025-26 budget.
In a 3-2 vote, the Board approved a plan to use other funds to backfill $20 million, preserving shelter beds that were at risk of closing and keeping more than 1,000 people currently served by rent assistance programs in their homes.
The decision was the last step in the Board’s work to rebalance the County’s budget due to significant state and federal funding reductions.
The Homeless Services Department’s FY 2026 budget, totaling $310 million, was adopted in June 2025 by the Board of County Commissioners. The budget estimated that the department would receive $54 million from the state of Oregon based on Gov. Tina Kotek’s recommended budget.
However, the final amount budgeted by the state was much lower than anticipated, meaning the department is receiving closer to $26 million — leaving a $28 million shortfall.
The $20 million backfill ensures 1,051 people who moved into housing through state funds programs are able to remain there. It also keeps open 214 shelter beds that would have otherwise had to close.
The backfilled funding will also ensure 320 additional people can be supported in leaving homelessness for housing through state-funded programs this year. However, an additional $8.7 million that had been budgeted for rapid rehousing programs — equating to about 732 additional housing placements — are no longer funded in FY 2026.
No existing shelter beds will close, and the department will end the year having added 815 out of the 1,000 new shelter beds aimed for in the Community Sheltering Strategy — a goal set at a time when the budget was not facing severe reductions.
Anna Plumb, interim director of the Homeless Services Department, said adding any additional shelter units would have required reducing the budget, in turn, for sustaining people in housing — cutting off rent assistance that’s sustaining people in permanent housing, thus increasing homelessness.
“Those goals were set when we had a significantly different funding scenario in our community. We are responsible to fund a balance of services that helps people stay safe but also gets them into housing,” said Plumb. “We made the decision that our first priority is to sustain folks in their housing. So we're using the funding to do that.”
Backfill funding sources
The County is pulling from several sources to backfill the $20 million, including:
- $6.4 million that was budgeted for the East County Homelessness Resource Center, a planned village shelter and day center project that is no longer moving forward. The decision not to move forward with the project was made in coordination with Multnomah County Chair Jessica Vega Pederson and Commissioner Vince Jones-Dixon, who led an engagement process with his district in East County.
- $4.9 million reallocated from other state resources, including $3 million that would otherwise go toward state-funded shelter in FY 2027, and $1.7 million in carryover from the state’s rehousing initiative that was originally earmarked for households in FY 2027. The state agreed to provide an additional $200,000 to fund six households in long-term rent assistance programs.
- $3.8 million in unbudgeted carryover Supportive Housing Services dollars from the previous year.
- $4.4 million in cost savings from changing the model of 140 budgeted shelter units from site-based shelters to flexible motel vouchers.
- $500,000 reallocated from programs that help place people in shelters into housing.
Future funding challenges anticipated
Plumb cautioned that additional funding challenges are ahead and could continue to grow, pending more changes in the local economy or new impacts from the federal government. “This budget modification balances our budget for the next fiscal year… but we anticipate further reductions in funding this next fiscal year, FY 2027,” she said.
“Our goal as a department is to review and recommend what our core services are and what we need to do as a department to support folks ending their homelessness and to reduce homelessness in our community,” Plumb continued. “We are anticipating a lot of conversations with our partners about how we can all work together in a constrained resource environment to provide a holistic and balanced homeless services system that provides the array of services our community needs to reduce homelessness across the board.”
Provider testimony
Several representatives from service providers who are contracted with the Homeless Services Department provided testimony about the budget modification.
They acknowledged the difficulties of budget reductions, but warned that reducing housing placements in order to preserve shelter beds could create bottlenecks.
“We’re concerned that the proposal from HSD lacks balance and concentrates nearly the entire reduction in contracted services for housing placement and rapid rehousing programs — programs that truly and sustainably end homelessness, and that open up shelter beds in fully funded shelters,” said Andy Miller, executive director of Our Just Future. “As a shelter operator, we know firsthand what happens when housing placements stop: Morale in shelter declines. Shelter participants begin to lose hope when they do not see people moving out of shelter.”
Philip Berlin, a housing supervisor for Self Enhancement Inc., echoed those concerns. “Without placement and retention services, shelter becomes a holding pattern, and not a pathway to permanent housing,” he said.
Providers also warned that the cuts could have wide-ranging effects.
“Any cut to one part of our system has ripple effects throughout our system,” said Laura Golino de Lovato, executive director of Northwest Pilot Project. “What I would like to ask is for the board to delay the vote on this until we have a better understanding of the scope of these cuts and give providers an opportunity to weigh in, so they have the least harmful impact on our community.”
Plumb said provider-level impacts won’t be fully decided until after the budget modification is finalized. “Having the budget modification approved so we have clarity on the cuts we need to take is what we need in order to then design those provider-level cuts,” Plumb said. “That’s sort of the bind we’re in — we need to know with clarity what we’re doing financially so that we can then design those cuts thoughtfully.”
Plumb also warned that delaying the vote could create a bigger budget hole. “Waiting longer means that we still are not making the cuts that we need to make, and we are not asking people to pause placements that they might need to make in order to meet that cut,” Plumb said.
Board vote and comments
The Board of County Commissioners approved the budget modification with a 3-2 vote, with Commissioners Meghan Moyer and Julia Brim-Edwards voting against it.
Commissioner Moyer said she was uncomfortable moving forward with a strategy that could create a deeper hole for next fiscal year.
“I am really uncomfortable with the degree we are creating an epic cliff for next year. And I’m also pretty uncomfortable not understanding what the cuts to existing providers actually mean,” Commissioner Moyer said. “I’m struggling to think about how we can get through this year, but also how we will approach next year.… I still feel unsure about where we’re going.”
Commissioner Brim-Edwards raised concerns about how the County is not delivering on the goals of the Community Sheltering Strategy, including adding 1,000 shelter beds and moving 40% of people in shelter into permanent housing.
“I’m concerned that the County made commitments that it’s not upholding,” she said. “I am also concerned that borrowing from future years will create a larger cliff in future years. Overall, it is crucial for the County and City to have a comprehensive strategy that will lead to a meaningful reduction in homelessness with better pathways to long-term, stable housing.”
Commissioner Shannon Singleton voted in favor of the budget modification, and also moved forward a budget note that provides further direction for the department related to placing people in shelters into housing.
“I feel like we’re getting sucked back into a shelter vs. housing conversation, which we all know is a false and arbitrary dichotomy. It’s important to remember that our Community Sheltering Strategy isn’t just about shelter beds — it’s also about placement out of shelter,” Singleton said. “We really need to look at that whole sheltering strategy, and where we’re going to move this work forward in our FY 2027 budget.”
The budget note directs the Homeless Services Department to “look at mid-year unspent resources and prioritize those dollars for housing placement out of shelter.” It also requests that the department provide a briefing to the Board of Commissioners with an update to understand where the department is going in regards to metrics related to placement into housing out of shelter, placement into housing from the streets, and a review of the department’s forthcoming shelter assessment report.
The Board unanimously approved the budget note.
Commissioner Jones-Dixon, who also voted in favor of the budget modification, urged the Homeless Services Department to continue its engagement work with providers to shape budget decisions moving forward.
“My concern is with the $4 million and the provider piece, and the lack of communication around the rebalance, specifically,” Jones-Dixon said, referring to the $4.5 million being cut that’s already been included in provider budgets. “I’ve heard from providers about them having to redo [their budgets].… That’s my chief concern.”
The department agreed to do further engagement with providers after the budget modification moves forward.
Chair Vega Pederson acknowledged the challenges and thanked the department for their work on the rebalance.
“The state made significant changes from the governor’s budget, specifically in housing placement and retention and prevention, and those are where we saw the biggest hits, so we’re trying to mitigate that here,” said Chair Vega Pederson. “I really want to appreciate HSD, but also all the departments, for offering creative solutions in a tight resource environment.”
