Oregon cities faring better, but face revenue squeeze

According to the League of Oregon Cities’ 2015 “State of the Cities” report, while declining revenues have leveled off for cities in Oregon, future revenues are expected to fall short of service level needs because of statewide limits on property tax collections.

“While fewer cities had to make additional cuts in services in personnel in 2014, the structural imbalance in Oregon’s property tax system continues to result in deferred maintenance of streets, equipment and buildings as revenues are insufficient to meet the inflationary pressures on city costs despite the previous several years of reductions in personnel and lowered service levels.” said LOC Executive Director Mike McCauley.

The League’s third annual report examines the fiscal health of Oregon’s 242 cities, combining survey data from 141 cities with an in-depth analysis of five years of annual financial data from 50 cities located throughout the state.

The 2015 report finds:

– City revenue declines are leveling off. After several years of reductions in service and personnel, 60 percent of responding cities indicate they currently have about the same ability to meet their financial needs as compared to the previous fiscal year. Meanwhile, 63 percent anticipate having the same ability to address their financial needs in the next fiscal year compared to this year. As a result, service levels, while reduced, have stabilized.

– Due to Oregon’s limitations on property tax collections, future revenues are expected to fall short of service level needs. This will require cities to identify alternate revenue streams – such as increased fees – as they struggle to maintain current service levels.

– The current mental health system in Oregon provides insufficient resources to address the immediate needs of people in crisis. As the system fails persons in crisis, the lack of funding and services is also impacting city services, particularly law enforcement.

– Finally, although cities expect to maintain current service levels, it is being done through fee increases and by continued or increased deferral of maintenance on roads, bridges, sidewalks and other transportation infrastructure.

The full report can be found at the League’s Website.