Eugene faces $11.5 million budget gap ahead of workshop

Eugene families could feel the next round of budget pressure first in the places they use most: libraries, parks, recreation programs and the city staff who answer calls when something goes wrong. At a June 8 work session, Mayor Kaarin Knudson, councilors and city staff were shown a forecast that pushed Eugene’s projected annual budget gap from $2.2 million to $5.1 million, after three revenue sources came in below December expectations.

The city responded by pausing hiring on most vacant positions, while exempting sworn police officers, firefighters, paramedics, 911 dispatchers and temporary summer program staff. Eugene also set $3 million in departmental spending targets for the rest of the 2025-2027 biennium, and said those steps could trim the annual gap heading into the 2027-2029 cycle to $4.4 million.

The pressure is structural. Eugene says the cost of delivering services rises about 3.5% a year while revenue grows about 2.8%, and the city says Oregon property tax limits under Measures 5 and 50 restrict how much it can collect. The 2025-2027 budget totals $1.9 billion across all funding sources, but the General Fund is about $380 million, roughly 20% of the total, and pays for day-to-day services such as police, fire, libraries and parks. Since 2010, the city says it has made $94 million in reductions, revenue changes and operational efficiencies.

The budget choices also overlap with voter-approved funding that will need to be replaced or renewed. Eugene’s Community Safety Payroll Tax brings in $23.6 million a year and expires Dec. 31, 2028. The Parks and Recreation Levy raises $5.3 million annually and also expires in 2028, while the Library Levy brings in $4.3 million a year after voters renewed it last month through 2030. Council had already directed City Manager Sarah Medary on Jan. 15 to return two budget-reduction scenarios to address a forecasted $11.5 million annual gap, and the council later adopted the 2025-2027 budget on June 23, 2025, with $4.7 million in new revenue, $3.8 million in service reductions and $2.2 million in reduced investments.

The next public test comes at the June 30-July 1 workshop on service frameworks and the strategic plan, with more council discussion set for July 13. For Eugene, the question is no longer whether the gap exists, but which visible services residents will notice first when the city tries to close it.