Read UPDATED Article on the cuts and the reaction
This just in from Mayor Charlie Hales' office:

Portland mayor Charlie Hales is again cutting his own office's budget in order to soften the blow of the City's expected $25 million general fund shortfall for 2013-14. 

Gail Shibley, Mayor Hales' chief of staff, announced today that $395,000 for summer internships and grant management contracts will not be moving forward.  Together with the $600,000 annualized salary difference from the earlier administration, Mayor Hales has reduced his office spending almost $1 million.

A local non-profit, Worksystems Inc., was to receive two separate grants from the mayor's office. One, worth $195,000, was for the SummerWorks youth employment program. A separate contract amendment worth $200,000 would have gone toward coordination of activities and support for the Summer Youth Connect program.

"Mayor Hales knows the value of summer interships, and has great respect for the good work of Worksystems Inc.," Shibley said.  These budget decisions simply reflect the tough fiscal reality we face, and the mayor is committed to leading by example as the council begins crafting next year's budget.  Every dollar of general fund saved today can go toward the $25 million hole the city faces."

Mayor Hales reiterated his commitment to education and jobs, stating "I stand ready to advocate for workforce development resources, especially in efforts for Portland-area agencies like Worksystems Inc.  The federal and state government, along with private sector industries, are essential partners in this important work."

Even before being sworn into office, Hales cut the size of his staff from 25 to 14, saving approximately $600,000 annually on staff salaries.