Multnomah County Chair Jessica Vega Pederson, center, greets volunteers and staff at the Grand Oak Shelter, a warming shelter housed in the former Andy and Bax Outdoor Store in Southeast Portland, Feb. 11, 2025.
Kristyna Wentz-Graff / OPB
The news of a $104 million deficit in Multnomah County’s homeless services budget shocked fellow metro-area government leaders last month. While that number has been reduced to around $70 million, thanks to untapped reserve funds, officials who rely on the county’s homeless response system to address the region’s sprawling homelessness crisis still have questions.
On Friday, Multnomah County Chair Jessica Vega Pederson offered some answers. In a letter to Metro President Lynn Peterson and Gov. Tina Kotek, Vega Pederson opened the books on the Homeless Services Department’s budget – and confirmed their concerns about how that money is spent.
At issue is how the county’s Homeless Services Department spends money considered “one-time,” meaning the money isn’t coming from an ongoing or consistent funding source.
The county’s own budget rules discourage using one-time funding to keep ongoing programs running, to avoid situations where critical programs are suddenly without money – like what Multnomah County is facing now.
Per Vega Pederson, one-time funding represented 45% of the Homeless Service Department’s spending in the current fiscal year, which ends on June 30. That includes programs that need ongoing money.
Metro President Peterson suggested this was the case at a meeting last month, chiding Vega Pederson for using one-time funds to prop up shelters and other homeless services that require ongoing revenue.
“She hasn’t been transparent,” Peterson said.
This problem is largely due to how the county’s homeless program is funded.
The Homeless Services Department oversees shelters, outreach work and other programs that help move unsheltered people into permanent housing. Around 70% of the department’s budget comes from the Metro’s Supportive Housing Services Fund, a regional tax on high-income households and businesses that was approved by voters in 2020. City, county, state and federal dollars make up the rest of the budget.
The Metro tax initially brought in far more cash to Multnomah County than anticipated, leaving the county awash with cash that it couldn’t get out the door to providers fast enough. Metro, which administers the tax, intervened to get the county on track to spend this extra cash on needed services.
Yet the revenue stream is no longer booming. That means programs that relied on excess revenue during the tax’s early years no longer have a funding source.
Dan Field, director of the Homeless Services Department, said Metro has long been aware that the county has used one-time funds to run homeless services programs. The county sends Metro quarterly reports on how it’s spending tax revenue. At the same time, he doesn’t think it was the wrong spending move.
“We are in a public health emergency,” Field told OPB. “We have spent a mix of ongoing revenue and one-time only revenue to meet the crises as urgently as possible. We know those dollars won’t last forever. But I don’t think the community is asking us to put those dollars in the bank while there are people on our streets that need services today.”
According to the data Vega Pederson shared, about $45 million of the department’s $102 million spending this year came from one-time funding. That’s about 43% of the entire spending plan.
The data show a similar pattern in previous years. In 2024, 44% of the department’s spending came from one-time cash. In 2023, it was closer to 30%.
This trend isn’t restricted to Multnomah County. Since 2020, Portland has relied on one-time federal pandemic relief money through the American Rescue Plan Act to patch budget gaps. With the expiration of those ARPA dollars, programs ranging from the city’s gun violence prevention office to homeless shelters are now facing critical budget shortfalls. “The loss of [ARPA] funds and programming will have significant impacts on the community,” wrote Mike Myers, the deputy city administrator overseeing public safety bureaus, in a February budget memo.
Metro has separately discussed sending money directly to Portland to pay for shelters that were funded with one-time money.
It’s still not clear how the city or Multnomah County will resolve their budget issues. Last month, Vega Pederson asked Metro for $30 million and the state for $55 million to balance the homeless services budget. In response, both Peterson and Kotek asked for budget details. After receiving the county data, neither government has signaled their cooperation.
Metro spokesman Nick Christensen said that staff are still “reviewing the numbers” sent by Vega Pederson Friday.
“We look forward to continuing conversations as we work toward a solution that will keep vital services that people’s lives are depending on intact – while addressing the broader reforms that are needed to make this program deliver,” Christensen wrote.
Metro is currently working toward a ballot measure to tweak aspects of the supportive housing tax, including a plan to strengthen financial oversight of the revenue.
A spokesperson for Gov. Kotek said she is “reviewing the information the county provided,” but noted it would be up to the state legislature to approve the funding. That process could take place after Vega Pederson is expected to release her budget in late April.
At a press conference in late February, Kotek hinted at her stance.
“[The county is] going to have to make some hard decisions,” she said. “It should not be incumbent upon the state to fill in all the gaps.”
Other county commissioners have offered other solutions to the budget gap. Commissioner Shannon Singleton, who led the Homeless Services Department for a period of time before joining the county board, has suggested withdrawing all supportive housing tax dollars from benign spent on programs that aren’t housed within the Homeless Services Department. Around $22 million is currently being spent on homeless-related programs in the District Attorney’s office, County Library, and elsewhere.
“Many of these are good programs,” Singleton told OPB earlier this month. “But if we are in a cut scenario, we should focus on spending money on the core components of homeless services. We shouldn’t be closing shelters.”
Yet Vega Pederson is banking on other governments’ help. In her Friday letter, she pushed her fellow elected leaders to pitch in.
“Thank you for your urgency in seeking to understand this financial challenge,” she wrote. “It is in all of our best interest to work together in partnership to develop our next steps.”