TL;DR (generated · confidence: high)

The City of Portland's Business License Tax (BLT) is its most volatile major revenue source, projected at $220 million for FY 2026-27 and comprising ~30% of discretionary General Fund revenue. The Mayor proposed an $8.7 million initial contingency reserve (4% of BLT collections). City Council directs the Budget Office to develop a comprehensive Business License Tax Revenue Stabilization Reserve proposal by FY 2027-28, modeled on Multnomah County's 15% BIT reserve, with a phased build-out plan over three fiscal years through FY 2028-29.

Key points (each cites a PDF page):

BLT is the City's most volatile major General Fund revenue source, historically declining 15–20% in single fiscal years during economic downturns (p. 28 ↗)
BLT revenues represent close to 30% of General Fund discretionary revenue and are projected to reach $220 million in FY 2026-27 (p. 28 ↗)
Mayor's Proposed Budget includes $8.7 million initial set-aside to BLT contingency reserve (equivalent to ~4% of projected FY 2026-27 BLT collections) (p. 28 ↗)
CBO must develop proposal by FY 2027-28 budget adoption, modeled on Multnomah County's 15% BIT reserve target per GFOA best practices (p. 28 ↗)
Proposal must include contingency target percentage, phased 3-year transition plan (by FY 2028-29 or sooner), withdrawal criteria, and replenishment policy (p. 28 ↗)

Amounts: $8.7 million · $220 million · 4% · 15% · 15–20% · 30% · Programs: Business License Tax (BLT) · Business License Tax Revenue Stabilization Reserve · City Compensation Set-Aside (CSA) · Multnomah County Business Income Tax (BIT) reserve · Government Finance Officers Association (GFOA) · Parties: City of Portland · City Budget Office (CBO) · City Administrator · Chief Financial Officer

Budget Notes

Source: PDF p. 28 ↗ · raw: 28

Breadcrumb: Budget Notes

City of Portland Fiscal Year 2026-27 Proposed Budget Budget Notes Mayor's Proposed Budget Notes City Operations Business License Tax (BLT) Revenue Stabilization Reserve The Business License Tax (BLT) is the City of Portland's most volatile major General Fund revenue source. BLT collections are driven primarily by the net income of pass-through entities and large national and multinational corporations, and are therefore highly sensitive to national economic cycles, taxpayer behavior, financial market conditions, and federal tax policy changes. Historically, BLT revenues have declined by as much as 15–20 percent in a single fiscal year during economic downturns. BLT revenues now represent close to 30 percent of General Fund discretionary revenue and is projected to reach $220 million in FY 2026-27, making the General Fund increasingly exposed to the inherent volatility of this revenue source. The Mayor’s Proposed Budget included an initial set-aside amount of $8.7 million to a BLT contingency reserve from a portion of the prior City Compensation Set-Aside (CSA) account which is no longer needed for that purpose as the City transitions to a base budget that better tracks current service levels and personnel cost projections. This initial BLT reserve funding amount is equivalent to approximately 4% of projected FY2026-27 BLT collections. Council directs the City Budget Office (CBO), in consultation with City Administrator and Chief Financial Officer, to develop a proposal for a Business License Tax Revenue Stabilization Reserve. The proposal should be modeled upon the similar and currently existing Multnomah County Business Income Tax (BIT) reserve target of 15% and should be consistent with reserve- related best practices and recommendations of the Government Finance Officers Association (GFOA). The proposal shall be delivered to Council no later than the adoption of the FY 2027-28 budget and shall include: (1) a recommended contingency target, expressed as a percentage of projected annual BLT collections; (2) a phased transition plan to build the BLT reserve to that target level over a period of three fiscal years (by FY2028-29) or sooner; (3) rules governing how BLT collections above forecast are treated relative to the reserve target and reserve funding when needed; (4) withdrawal criteria that specify the conditions under which withdrawals from the BLT reserve are recommended to offset a BLT shortfall, and (5) a recommended replenishment policy for when and how funds should be replenished after withdrawals. 28

Parent: Portland FY 2026-27 Proposed Budget · PDF: p. 28 ↗