Portland councilor, city administrator spar over proposed homeless budget

PORTLAND, Ore. (KOIN) — Tensions erupted at Portland City Hall as a budget work session turned contentious Wednesday. 

As Portland’s new 12-person City Council works through its first budget approval process, one councilor felt the need to speak her mind, asking tough questions about where the city’s responsibilities begin and Multnomah County’s end, when it comes to the homeless crisis.  

Frustrations came to a boiling point when District 1 Councilor Loretta Smith challenged City Administrator Michael Jordan as he presented elements of Mayor Keith Wilson’s $8.54 billion budget. 

“I want to go back to the huge elephant in the room,” Councilor Smith said. “Why are we currently breaking our own IGA with the county and doing homeless services?”

Her question comes as the city’s general fund faces a looming budget shortfall of $93 million, as estimated in February 2025.

In fall of 2024, the City of Portland and Multnomah County entered a new intergovernmental agreement (IGA) focused on addressing homelessness, which includes a $31.1 million annual funding commitment from the city to the county, beginning in FY 2025-26. 

Smith questioned why the Mayor’s proposed budget slated additional millions for homeless outreach and shelter services, which the city already pays the county to tackle under the IGA. 

“The new Housing Department of Multnomah County says they do all the homeless services,” Smith said. “And instead, we have $100 million worth of Homeless Services in our budget. I’d say that that would make up the 20% that you’re trying to cut off in fall.” 

Amid a tight budget session, Smith suggested the money could be used to save some of the more than 180 jobs on the chopping block, most of which are slated to come from the water bureau and permitting department. 

“You’re saying, ‘okay, who’s more important, homeless folks or our folks?’ And you’re pitting those two against each other, and now our folks are going to have to go on the unemployment line,” Smith added. “You’re saying, ‘we need you to go in the unemployment line so we can take care of these folks that we’re not supposed to be taking care of, and that’s done by the Joint office.’ — So that is ridiculous and it is unacceptable what you put forward.” 

Although Administrator Jordan agreed Smith’s question was a valid one, he suggested the council could change the proposed budget to fit the agreement. 

However, Smith said the buck stops with Jordan and the Mayor. 

“That’s your responsibility,” Smith responded.

“Councilor, there is no way that we would continue the services that we’re trying to continue right now and have it conform to the letter of that IGA,” Jordan said. 

“Why do we even have an IGA if we’re not going to conform to it?” Smith asked. “Why is it that you all can break rules and regulations? We can’t, our employees can’t. You hold their feets to the fire, and I’m going to hold your feet to the fire. So, don’t give me a budget that breaks an IGA.” 

A handful of Smith’s constituents agreed that picking up the county’s slack could pose a problem down the line, while others called out her comments. 

“I found your line of questioning and the way you approached it towards the city administrator deeply inappropriate,” Said fellow District 1 Councilor Jamie Dunphy. 

“It’s not the city administrator’s budget that we’re considering,” Said Councilor Steve Novick of District 3. “So, I would suggest that if any of us feel the need to yell at anybody about the budget, we should yell at our fellow elected official, the Mayor.”

In response to claims that the Mayor’s proposed budget violates the city and county IGA, Mayor Wilson’s Office shared the following statement with KOIN 6 News:

“Portland currently faces an unprecedented homeless crisis with 5,398 people living unsheltered and far too many lives lost. Mayor Wilson was elected to tackle this crisis head on, and his strategy relies on collaboration among government agencies, nonprofits, advocates, community leaders, and our partner Multnomah County. The existing intergovernmental agreement (IGA) is a framework for cooperation and does not prevent us from responding to this crisis. We will have opportunities to review and refine the IGA as part of our long-term strategy, but Mayor Wilson’s immediate priority remains clear: saving lives and restoring stability for Portlanders. 

The homeless crisis has placed extraordinary strain on our community, prompting significant investment in programs that support some of Portland’s most vulnerable residents. In his budget message, Mayor Wilson emphasized that every dollar committed to ending unsheltered homelessness is an investment that restores quality of life, eases the burden on our public safety system, and ultimately bolsters our economic potential.   

The proposed funding is not as a trade-off against city jobs but as part of a comprehensive effort to generate additional external revenue from our county, metro, and state partners. That extra revenue will strengthen our city’s infrastructure and support our residents.”

When asked if the IGA should be altered and if homeless services fall under the county’s responsibilities, a representative with Multnomah County Chair Jessica Vega Pederson’s office told KOIN 6 News the Chair was too busy to respond.