Oak Street Village shelter complex in Portland, Ore., Feb. 19, 2025. Multnomah County's homeless services department is facing a $104 million budget shortfall in the next fiscal year.
Courtesy of Motoya Nakamura / Multnomah County
The Multnomah County agency that oversees the region’s homeless response is facing a serious budget crisis.
The county’s Homeless Services Department (formerly called the Joint Office of Homeless Services) is anticipating a $104 million shortfall in this upcoming fiscal year, which starts on July 1. This represents a 25% reduction in the department’s entire budget.
Multnomah County leaders are hoping the state and Metro regional government can help backfill the gap. In a press release, County Chair Jessica Vega Peterson said that because 40% of the state’s homeless population lives in Multnomah County, the health of the county’s homeless services should concern the entire state and region.
“With this grim budget outlook, Multnomah County cannot do this alone,” she said.
The Homeless Services Department is run by the county and oversees homeless shelters, homeless outreach work and other programs that help move unsheltered people into permanent housing. The department is largely funded by Metro’s Supportive Housing Services Fund, a regional tax on high-income households and businesses that was approved by voters in 2020. That fund covers about 68% of the annual budget for the county’s homeless services department. About 12% of the budget comes from Multnomah County’s coffers, while 9% comes from Portland’s budget. Federal and state dollars make up the rest of the spending.
According to Homeless Services Department Director Dan Field, his office is expecting a 20% decline in revenue from the housing services fund this year along with scaled-back funding from the county and city’s general funds.
“It’s a bit of a perfect storm,” Field told OPB. “Everyone’s been hit with funding challenges.”
Related: How homelessness started, grew and became a statewide crisis in Oregon
Multnomah County and the city of Portland are up against serious budget shortfalls. The county is navigating an estimated $21 million funding gap, while Portland is expecting a shortfall closer to $100 million.
Metro’s supportive housing fund is currently made up of two taxes. The first is on individuals making more than $125,000 annually (or couples making more than $200,000). Those taxpayers must pay 1% on any income made above those income levels. The second is a 1% tax on income for businesses making more than $5 million annually.
While the Metro tax initially brought in far more cash to Multnomah County than anticipated, a November economic analysis by Metro found that the income tax revenue is expected to slow over the coming years. Analysts said that slow job growth and the general volatility of income taxes — and non-job related income that wealthier residents often rake in, such as capital gains on investments — contributed to this downturn.
This budget drop reflects a pendulum swing in the Homeless Services Department budget. Just two years ago, the county was struggling to spend the revenue it received from the supportive housing tax fast enough, a problem that attracted heavy criticism and concern from the public as homelessness in the region skyrocketed.
Last year, however, the department was able to spend every dollar it had received through the tax. This means little money is left over to patch the looming budget hole.
Field said he doesn’t regret spending that money swiftly. “We have an urgent situation where people are homeless or at risk of becoming homeless in our community, and we’ve got to put those dollars to use,” Field said.
Yet the anticipated budget gap has forced Field to put some projects on hold, like a plan to build a new supportive housing complex for 221 people experiencing homelessness.
“We put a pause on that because we’re trying to absorb some of these cuts,” he said.
Multnomah County is asking Metro and the state to help fill its budget gap. On Friday, Vega Pederson asked Metro for $30 million in currently unspent supportive housing tax dollars and $55 million from the state’s budget.
“We have to acknowledge that Multnomah County is the economic and social center of our region,” Field said. “And it’s also where the challenges of homelessness are most pronounced.”
Without support, Field said, he’d be forced to cut a quarter of his office’s budget, meaning program and job losses.
It’s not clear if Metro or the state will heed this call. Both governments are facing their own budget constraints. Metro has previously disagreed with Multnomah County on the future of the supportive housing services tax. The regional government is interested in extending the tax and allowing it to be used on housing construction along with homeless services. Multnomah County has asked to keep the tax as is to ensure its programs that rely on the tax remain operational.
Metro spokesperson Nick Christensen said in a statement Friday that Metro will be “working over the coming days to come up with ideas on how to address this.”
“Our top priority — everyone’s top priority — needs to be helping people get housed and sheltered, and maintaining our successes,” Christensen said.
Oregon Gov. Tina Kotek said she hasn’t had enough time to consider the funding request, having only learned of it on Thursday.
“I made addressing homelessness and housing affordability a clear priority in my budget in response to the crisis at hand, which is impacting every corner of the state – not just Portland,” she said in a statement. “I am not prepared to take a position on whether to send one more state dollar to Multnomah County unless and until my office and the Legislature have clear answers.”
Related: This key piece of Oregon Gov. Tina Kotek’s housing effort has finally launched
County leaders said Friday that they are extending an olive branch toward the city and asking for Metro support to bolster Portland’s dire financial picture as well. Field, the county homelessness leader, said one-third of the requested money from Metro would be funneled to the city.
Portland needs the help.
More than a quarter of Portland’s estimated budget shortfall includes the anticipated cost of Mayor Keith Wilson’s new shelter plan. That $28 million plan aims to create at least 1,500 new shelter beds, four new shelters open during the day and four new storage facilities.
The public will get a first look at how Wilson’s funding plan could affect the city’s budget next week. The city administrator’s office will release an early draft of budget recommendations on Friday.
This story will be updated.