The City Council voted 4-1 on Wednesday to instead set aside $200,000 for organizations that provide reproductive care.
The sole "no" vote was by Commissioner Mingus Mapps, who said he was "mystified" by the allocation of funds.
"Our city is overwhelmed by multiple crises. This council should focus on solving those," he said. "We have a gun violence crisis. We have a homelessness crisis. We have a trash crisis. And we have a pandemic."
Mapps said he opposes the Texas law that went into effect earlier this month.
Portland has purchased nearly $35 million in goods and services from Texas over the last five years, spokeswoman Heather Hafer said.
"Will what we do today fundamentally change the mindset of Texas legislators? Probably not," Portland City Commissioner Jo Ann Hardesty said. "But what it will do is send a very strong message, to the people of Texas, that we don’t abandon them just because unfortunately they have the leadership that they have."
Texas’ Heartbeat Act, which took effect Sept. 1 after Republican Gov. Greg Abbott signed it into law in May, bans abortions in the state after about six weeks.
Critics have argued that many women don't realize they’re pregnant within that amount of time, and have objected to the law lacking exceptions for cases of rape or incest.
‘It will spread’
"I’ve heard some suggest that this (law) has no bearing on our local community ... I could not disagree more," Portland Mayor Ted Wheeler said during a meeting Wednesday. "If this Texas law, restricting the rights of women, is allowed to stand then it will spread to other states — it will jeopardize Roe v. Wade and it will impact our constituents here in the city of Portland."
Wheeler posted several tweets about Wednesday's resolution, writing it was his "duty and honor" to vote for it.
"We will not be silent in the face of oppression and control," he tweeted. "We will speak out, act, and hold other states accountable for the disproportionate harm they inflict on communities of color, women, gender non-binary individuals, poor working families, and immigrant communities."
Wheeler announced the city’s now-derailed plan to boycott Texas businesses earlier this month.
‘A complete joke’
Texas Lt. Gov. Dan Patrick mocked the boycott plan as a "complete joke" on Twitter after Wheeler made the original announcement.
"A city led by depraved officials allows lawlessness, putting their citizens in grave danger. A boycott will hurt them, not us. Texas’ economy is stronger than ever. We value babies and police, they don’t," he wrote.
The boycott would have banned the purchase of goods and services by Portland from Texas and bar city employee travel until the legislation is reversed or overturned.
Wheeler appeared to have publicly announced the ban before officials had hammered out the details of how a Texas boycott would work.
During Labor Day, city officials met with reproductive health care providers and advocates to discuss the boycott. Wheeler said advocates "disagreed with some elements of" the ban and suggested alternatives.
The Associated Press contributed to this report.