Portland is trapped between two structural forces.
First, the Oregon Public Employees Retirement System (PERS) carries a $29.4 billion unfunded liability, roughly equal to the state’s entire biennial General Fund. The system lost $8 billion in 2022, and employer contribution rates continue to rise because the state constitution protects existing benefits.
Salem now pays $11 million more annually for pensions than it did just years ago. Gladstone School District’s PERS costs rose from 3% to 19% of payroll. Statewide, school districts face a $670 million increase in pension obligations in the 2025–27 biennium. These payments take priority in every budget, automatically crowding out other services. This is austerity on autopilot.
Second, Oregon’s property tax system caps assessment growth at 3% annually and limits total taxes as a share of market value.
When market values collapse—as they have downtown—taxes must fall.