Cities pitch their plan for state homeless spending

By PETER WONG
Oregon Capital Bureau

Officials from Oregon’s 241 cities have renewed their call for direct state aid, based on population, as the best way for Oregon to reduce the number of unhoused people and provide more shelter and services.

Their plan, which they unveiled last fall and restated Wednesday, calls for an annual allocation of $40 per resident – with a minimum of $50,000 per city – plus about $150 million for one-time construction costs associated with shelters. Based on a 2022 population count by Portland State university, the annual request for state aid amounts to $125 million in each of the next two years.

Mayor Teri Lenahan of North Plains says cities have demonstrated they are accountable for large-scale spending under two federal laws — the CARES Act of 2020, passed at the start of the coronavirus pandemic, and the American Rescue Plan Act of 2021.

“Our proposal is asking that funds be directly allocated to cities. Why? Because cities have a proven track record to receive, implement and report on dollars,” said Lenahan, who is president of the Oregon Mayors Association.

“Alternatives like competitive grants and county allocations heavily favor larger cities with staff to manage those applications and programs. That is not afforded to smaller cities in Oregon. If funds go only to cities with highly visible challenges, the root causes of homelessness are left untreated.”

Lenahan was one of 25 members of a task force that came up with the plan, which is endorsed by the League of Oregon Cities. Among its other members are mayors in Portland, Gresham, Hillsboro, Beaverton and Tigard.

But Gov. Tina Kotek, in her remarks an hour afterward to a League of Oregon Cities gathering at the Salem Convention Center, said only that she would meet with task force members for a further discussion. She declined to offer specifics of her own spending proposals for the next two-year state budget, which are due by Feb. 1.

In remarks lasting just six minutes, Kotek said this:

“You are on the ground. It is a statewide problem. Homelessness in this state may look a little different in every community, but it is there. We have an issue with housing supply in every corner of our state. We need to take both of those issues on with the urgency they demand.

“My pledge to you is that we will be doing this together,” she said. “I hope by the end of the legislative session, you will see resources that will help you do the things you need to do.”

Kotek’s spending proposals will be in addition to her request for $130 million to be drawn from the current two-year budget, which ends June 30.

She restated housing and homelessness, mental health and substance abuse treatment, and aid for struggling students as her first-year priorities.

Kotek, in an executive order she signed Jan. 10 on her first full day as governor, designated five urban areas for special attention: the three-county Portland metro area, Salem, Eugene/Springfield, Medford/Ashland, and Central Oregon. One of the orders did acknowledge that Oregon’s 2022 point-in-time count of homeless people – which put 4,000 of the 18,000 statewide outside those five areas – was “an underestimate.”

Money competition

The proposal by the mayors and the cities will compete against others as lawmakers face the prospect of a $3 billion gap between current and projected tax collections and lottery proceeds, the most flexible sources of spending in the state budget. The state also receives billions from federal grants and other sources that are largely earmarked for specific purposes.

Two more economic and revenue forecasts are due, the latest by May 15, before lawmakers make final decisions on the 2023-25 budget.

More than 200 officials from 80 cities heard Kotek and legislative leaders speak as they gathered to advocate for eight league priorities, among them maintaining tax incentives for economic development and boosting state support for local public works – including those required to accommodate more housing.

“Our collective efforts will yield good outcomes so that our beloved Oregon might be great,” Hillsboro Mayor Steve Callaway, the league president, said in opening remarks.

The mayors’ group is an affiliate of the league.

During a news conference before the remarks by Kotek and legislative leaders, city advocates offered additional comments about their request for state aid.

“I feel that the funds we are requesting in our proposal actually can be used equitably for the cities,” Lenahan said. “It’s a very equitable approach for cities to use the funds for the needed construction projects and the response to homelessness or for prevention of people being homeless.”

Other city advocates said that no matter what form additional state spending takes, the public should not expect dramatic results immediately.

“To me it’s clear that throwing money at this problem is not going to be an immediate solution,” said Hermiston Mayor Dave Drotzmann, also a task force member and league vice president. “Our goal is to try to get more people transitioning out than coming in. For decades as a state, we have underfunded housing and homelessness.

“The good news is that we are in alignment. Cities, the Legislature and the governor are working in the same path.”

Patty Mulvihill, League of Oregon Cities executive director, said other local governments on the West Coast are facing the same difficulties.

“What you are hearing is … that this is a long-term funding need. This is not an overnight success. There is also not a one-size-fit-all solution,” she said. “What we are seeing is … that we have to have flexible funding that locals can identify how it will be best used.”