Mayor Charlie Hales takes right approach on budget surplus: Editorial



Portland Mayor Charlie Hales wants to use a one-time budget surplus to reduce city debt. It's a good idea.

(Benjamin Brink/The Oregonian)

Perhaps the most positive sign from

' first 8 1/2 months in office has been his disciplined approach to the city budget. Until now, it wasn't entirely clear whether that discipline was a matter of necessity or a matter of principle. After all, it's relatively easy to show financial restraint when you don't have any money to spend -- even if some past city councils have done their best to prove otherwise.

So the recent revelation that the city finished the most recent

, which ended June 30, with a one-time budget surplus of about $11 million presented the mayor with a test of sorts. By proposing that the city should make paying off debt a priority, Hales passed with flying colors. In another encouraging sign, the other four members of the council appear to agree with the mayor.

Disagreements surely will emerge as the council decides which debts to pay off and how to spend the money freed up in the future budgets by the debt reduction. A minority of the one-time surplus also may be applied to current needs, rather than debt, and commissioners have different opinions on what the priorities should be.

We'll reserve judgment on specific proposals until more details emerge, but instead will suggest a couple of guidelines for the council to consider as it makes decisions.

Use the money where it will deliver short- and long-term benefits. City budget director Andrew Scott said the city is looking first at debt that could be paid off over the next few years rather than just paid down. Two examples are debt owed on 1990s City Hall renovation and payments still due on a dispatch system for the

Once the debt is paid off, that money would be available for other budget uses. If the city applied the $11 million to bigger, longer-term debts it would again have to find revenue to make the payments after the one-time surplus evaporated.

The same sensible approach should be applied to any purchases made with the surplus. The money should be used only for one-time expenditures, not on projects that would create financial obligations beyond the next budget year.

The city certainly will hear many ideas over the next few weeks about what it should do with the one-time money -- about half of which was the product of reduced city spending since March. Readers already have made suggestions in response to a

Lower water rates. (The Water Bureau needs a long-term fix.) Use it to replace the arts tax. (That one is tempting). Return the money to taxpayers. (Another kicker is the last thing we need.)

Two things are certain, though. It's more pleasant to decide how to spend unexpected money than to decide what to cut in the wake of unexpected shortfalls. And if the council continues to show fiscal discipline, it will slowly earn more trust from taxpayers.