This week, Oregon lawmakers finalized a significant budget, allocating billions of dollars for various projects and critical needs across the state. The budget package includes funding for affordable housing, construction initiatives at Portland State University, and enhanced wildfire fighting resources.
These end-of-session budget bills, often referred to as the “Christmas tree bill,” are traditionally characterized by their wide-ranging expenditures that reflect the priorities of key legislative leaders and prominent members of the budget-writing Ways & Means Committee.
Among the noteworthy achievements for House Republicans this session were substantial allocations for local infrastructure. Representatives Jeff Helfrich and Greg Smith successfully secured $105 million in bonds for the replacement of the Hood River-White Salmon Interstate Bridge. Meanwhile, Representative Bobby Levy celebrated a significant victory, obtaining $2.5 million to install plumbing at the Union County fairgrounds, highlighting its status as the only county fairgrounds in Oregon lacking running water and sewage facilities.
Levy emphasized the importance of this funding for both Union County and the city of La Grande, stating, “This is a big deal for Union County and the city of La Grande.”
The budget also features niche allocations aimed at addressing specific community needs. Among these are $200,000 for a mental health crisis line dedicated to agricultural and forestry workers, nearly $4 million for a business incubator located on the Warm Springs reservation, and $3 million earmarked for various festivals at Portland’s Tom McCall Waterfront Park. Additionally, $10 million has been set aside for the much-anticipated James Beard food market in downtown Portland.
Further, the Oregon Department of Forestry received $4 million for new wildfire surveillance cameras, while around $8 million was allocated to support theaters and museums throughout the state. This includes $350,000 for a new facade and signage at Salem’s Elsinore Theatre and $325,000 for an art museum in Coos Bay.
In stark contrast to the contentious transportation negotiations that marked the end of the session, the budget discussions exhibited a spirit of bipartisanship and cooperation. Smith, who serves as one of the vice chairs on the Ways & Means Committee, praised committee co-chairs Rep. Tawna Sanchez and Sen. Kate Lieber for their collaborative approach. He noted that they frequently communicated with him and other Republican members, ensuring they felt included in decision-making processes — a refreshing change, according to Smith.
Reflecting on this cooperative atmosphere, Smith remarked, “The interest of government is openness and transparency. You represent that.”
House Speaker Pro Tempore David Gomberg of Otis reciprocated the praise, acknowledging the constructive role of Republican lawmakers. He expressed gratitude for their willingness to engage positively rather than solely opposing initiatives, calling it, “often more challenging” for those in the minority.
Despite the collaborative spirit, not all lawmakers were satisfied with the allocations made in the final budget. Senator Lew Frederick, a Democrat from Portland, expressed disappointment that significant projects in his district did not receive funding. He specifically mentioned the long-anticipated redevelopment of a vacant block that once served as the center of a Black commercial district in Northeast Portland, emphasizing that the effort has been in progress for over six decades.
Frederick stated, “Expect to hear more from me about this. It’s not whining, it’s saying: ‘Okay, look. You gotta do something. We’ve waited long enough.’” This sentiment underscores the ongoing challenges faced by some communities in securing necessary development resources.
Similarly, Sen. Fred Girod, a Republican from Silverton and co-chair of the Ways & Means Capital Construction Subcommittee, acknowledged the tough realities of budget negotiations this year. He informed his committee that the likelihood of any individual lawmaker having their favored projects funded was notably diminished.
Girod revealed that he received requests totaling $2 billion for lottery funds. After addressing what he deemed obligatory projects, he noted that only a few hundred million could be allocated for additional requests, stating, “We left a lot of really good projects on the table, and we’ll be the first to admit it.”
The budget discussions were complicated further by a significant drop in anticipated revenue. During the budgeting process, a state revenue forecast indicated a $500 million decline in personal income taxes, resulting in a 2% reduction in general fund revenue, totaling $37.4 billion. This marked the first time since 2011 that the May budget forecast showed a decline compared to March, with the exception of a temporary dip during the COVID-19 pandemic.
Budget writers devoted numerous months to crafting agency plans, only to re-evaluate them in May due to this downturn. As a result, funding decisions became increasingly tight, with budget writers striving to maintain most agencies at their current service levels, which represent the costs for maintaining existing operations.
In making tough choices, few policy option packages — or requests for new spending — were funded. When new allocations were made, they were often offset by respective cuts elsewhere within agencies.
Lieber highlighted the most painful cuts were faced by budgets tied to the Fund for Student Success, financed by corporate activity taxes. That fund, which is essential for programs like literacy initiatives, school social workers, and early learning, experienced a $200 million reduction from initial expectations. To mitigate some of the impact, budget writers utilized $100 million from reserves, but still faced challenges in managing the necessary cuts.
One notable casualty of the budget constraints was Oregon’s Outdoor School, which saw a $12 million reduction, amounting to a loss of nearly 20% of its budget for the next two years. Additionally, funding for a grow-your-own teacher and administrator initiative was eliminated altogether, leaving new applicants without support.
Lieber characterized the decision-making process as “awful” and “terrible,” reflecting the difficult trade-offs presented by the budgetary landscape. The omnibus end-of-session money bills provided a way for lawmakers to replenish funding that had been excluded from agency budgets while also funding politically motivated projects that could bolster their favor with constituents.
Notably, lawmakers allocated a $10 million boost to the Oregon Conservation Corps, a job training initiative where young individuals engage in fire prevention work by clearing hazardous brush from rural areas — an effort celebrated for its success. Additionally, the budget featured $11 million earmarked for eviction prevention funding, despite substantial cuts to related programs earlier in the budget process, which drew criticism from Governor Tina Kotek and tenant advocacy organizations.
While both Lieber and Girod expressed satisfaction with the funding packages, they acknowledged the challenges faced by lawmakers this year. Girod identified housing as a predominant concern but lamented that substantial funding for housing initiatives comes at the cost of resources for law enforcement, corrections, and education — sectors he believed warranted greater investment.
The funding contemplated for housing initiatives includes a historic allocation of $650 million in bonds aimed at supporting housing development, homeownership, and rental assistance through Local Innovation and Fast Track programs. Although this figure is noteworthy compared to previous allocations, it fell short of the expectations set by Governor Kotek.
As lawmakers concluded their negotiations, they also had to consider preparing for future uncertainties in the economy and potential impacts from federal budget decisions. They refrained from directing surplus funds from the current budget into Oregon’s recession savings account, a departure from standard practice.
Despite generating significant unspent capacity for bonds across a range of revenue sources, Lieber emphasized the importance of maintaining fiscal responsibility. A balance was necessary between the immediate economic benefits of bonding for projects and the long-term implications of debt repayment on the general fund.
Key bond-related initiatives highlighted in the upcoming budget included $100 million for widening and deepening the Coos Bay Channel to accommodate larger vessels, as well as $347 million aimed at renovating buildings across Oregon’s community colleges and public universities. Portland State University stands to benefit significantly, receiving a major allocation of $85 million for a new performing arts building, alongside additional funding for a parking garage and a dormitory.
In summary, the legislative session revealed both victories and frustrations as lawmakers navigated budget constraints while attempting to address urgent needs. The decisions made during these negotiations will undoubtedly impact various sectors, reflecting the ongoing challenges in balancing community priorities and financial realities.
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