Portland’s finances over 10 years, 1997 – 2006

Portland’s Auditor has an interesting new report posted on the City’s Financial Condition (pdf), reviewing data and trends from 1997 to 2006. I’ll give you my brief version of the 20 pages here, but the Auditor’s report has some nice pie charts and graphs so you may find that easier to read in the long run.

Our city’s population increased 11% over the ten years, giving us about 15% of Oregon’s total residents. The city has about 439,000 jobs, a number which has stayed about the same. Unemployment went up over the ten years, but is now at 5.2% on a downward trend.

General property tax revenues remained the largest single source of operating revenue for the City of Portland in 2006, but its percentage of total revenues decreased from 31% in 1997 to 24% in 2006. Property values increased a whopping 69% over the ten years, but assessed value went down 4% due to Measure 50. Property taxes dedicated to funding the Fire and Police Disability and Retirement Fund rose 38%, while property taxes going to the General Fund went up less than 1%. Overall property tax revenues rose 10%, user charges rose from 5% to 8%, and business licenses and permit payments rose 20% (much from increased collection rates) over the ten year period. User charges/fees averaged $55 per resident in 1997, $95 in 2006. The three highest-generating user fee categories: parking fees and fines, development inspection fees, and parks fees and concessions.

Over the ten years, spending per Portland resident rose 14%, from $1,044 in 1997 to $1,195 in 2006. The level of city staffing remained constant at about 10 employees per 1,000 residents. Employee compensation took 68% of all general expenses in 1997, falling to 62% by 2006. Average employee compensation rose 6% over the ten years, but wages/benefits for public safety employees rose 12% while that of all other employees went up only 1%. Over ten years. One percent over ten years is not very much. Average annual inflation nationally was close to 3% per year over this timeframe, so a 12% raise over the decade didn’t keep pace, either. [update 5/1/07: I missed the detail in the introduction saying the report’s numbers are all in 2006 dollars. See comments.]

In long term obligations, the City is looking good for PERS (Public Empoyees Retirement System) pension funds, having issued $300m in bonds in 2000 to cover its future liabilities. On the separate Fire and Police Disability and Retirement Fund, the outlook is still expensive despite the partial fix in the ballot measure passed last year. That partial-fix will increase property taxes in the short term while decreasing them eventually. The core problem is that little was done to address the $1b unfunded liability in 1997, so it grew to $1.8b by 2006. “Shoulda been done long ago”, to quote Neil Young. Despite these pension obligations, the City has had Moody’s top AAA bond rating since 1973.

Overall expenses by major service category:
Public Safety – 51% in 1997, 48% in 2006.
Legislative/Administation – 11%, stayed constant.
Transportation – 20% in 1997, 24% in 2006.
Community Development – 9%, stayed constant.
Parks & Recreation – 9% in 1997, 8% in 2006.

It’s even worse than the numbers show for Portland Parks, because while its total spending rose 5% over the ten years, per capita spending decreased 5%. Transportation expenses rose 60%, much of it due to the tram.

And on that merry note, I will stop, suggesting once again that a browse through the original Audit may provide further information/entertainment for you. PortlandOnLine is often difficult to negotiate and makes it hard to locate specific items a citizen may be looking for, but it’s pretty cool to happen upon a page like this and have so much research presented in an easy-to-understand format.