Budget has more for housing, homelessness and schools

Oregon Governor Tina Kotek wants the state to spend more than $2 billion on homelessness and housing and send a record $11.4 billion to public schools as part of a budget focused on maintaining existing programs with little cash to spare for new initiatives. 

Her total spending plan, including federal funding that the state doesn’t have much control over, is $137.7 billion for the two-year period from July 2025 to June 2027. Her proposed general fund and lottery funds budget, where Kotek and lawmakers have more discretion, is $39.3 billion. 

That’s a sharp increase from the $33.5 billion general fund and lottery funds budget lawmakers approved in 2023, but it doesn’t reflect much new spending. Instead, the state is grappling with the same budgetary pressures as many Oregonians: Revenue is higher, but so are costs.  

“People understand this from their own household budgets,” Kotek said at a press conference in Astoria last week. “While our economy is strong and wages are up, and people, if you just look at the numbers, are making more, their expenses are up. And in the case of the state, our expenses for health and human services have really grown, so the expenditure line is outpacing the money coming in the door.” 

Her recommended budget doesn’t include layoffs or cuts to services, and it also has few new programs. Kotek’s office provided embargoed copies of her budget document and prepared remarks on the condition that reporters not share the information or seek comment from other sources until after she publicly releases her budget proposal midday Monday. 

When state agencies crafted their budget requests, Kotek limited them to a 1 percent increase over 2025-27 levels. She also asked them to prepare lists of where they could cut by 10 percent by focusing on core services and making sure to maximize federal funding. 

“It was a hard exercise for some,” Kotek’s prepared remarks say. “But I believed that Oregonians, in this moment, would be better served by committing time and energy to practical considerations rather than well-meaning hypothetical wish lists. Developing my budget was an effort grounded in the reality of our state and our resources.”

Housing and homelessness

Oregon’s twin housing and homelessness crises have long been top of mind for Kotek, who declared a homelessness emergency on her first full day in office. Early executive orders, and an infusion of hundreds of millions from the Legislature during the past two years, are on track to lead to about 3,300 families moving into permanent homes, 4,800 shelter beds across the state, and 24,000 Oregonians receiving support needed to remain housed by July, her office estimated. 

But more than 20,000 Oregonians were homeless on a single night in 2023, according to the U.S. Department of Housing and Urban Development’s latest point in time count, and most of those people still sleep outside or in cars. 

Kotek will make the case that her budget requests will reduce the state’s homelessness crisis, while not solving it. 

“By the end of the current biennium next July, the actions related to the homelessness emergency I declared are projected to rehouse and shelter thousands of Oregonians, while preventing thousands more from becoming homeless in the first place,” her prepared remarks say. “If we continue at this pace, the equivalent of nearly one in three Oregonians experiencing homelessness on my first day in office will be rehoused by the end of my first term.” 

Kotek is seeking $217.9 million to maintain Oregon’s existing shelters and $188.2 million to rehouse currently homeless people. She’ll also ask lawmakers to approve $173.2 million for eviction prevention services to keep people from becoming homeless in the first place and $105.2 million for long-term rental assistance for individuals and families who need more than short-term emergency help. 

Her longer-term goal of building 36,000 homes per year to get Oregon out of a housing shortage that drives up rents and home prices remains. Kotek’s asking lawmakers to approve $880 million in state bonds for more affordable homes, with most of that sum for rental homes, as well as $100 million for infrastructure needs related to homebuilding. Lawmakers last year allocated close to that amount for water, wastewater, and other upgrades needed before developers could build homes in cities across the state. 

Education and children

Kotek is seeking $11.4 billion for the State School Fund, an increase over the current $10.2 billion. That comes as a result of changes in how she wants to calculate school funding and as skyrocketing pension costs threaten school budgets. 

She’ll also ask lawmakers to approve $127 million for early literacy programs, with grants to school districts, community organizations, tribal nations and Dolly Parton’s Imagination Library, which sends free books to families for children up to 5. Another $78.5 million would go toward ongoing spending on summer learning programs, which have struggled to find consistent funding in Salem. 

Her proposed budget reflects a spring settlement in a class-action lawsuit over Oregon’s child welfare system. Kotek will recommend $23.6 million in new funding for Oregon’s child welfare system to implement the settlement agreement, including $10 million to end the practice of placing children in temporary lodging in hotels and $4 million to help youth aging out of foster care. 

She’ll also seek $25 million for youth behavioral health, including $6 million for mental health services and substance use disorder screening in schools and $17 million for residential and community-based services for young people struggling with addiction or behavioral health. 

Behavioral health

Keeping behavioral health workers and training and hiring more are top priorities in Kotek’s budget, which includes a proposed $130 million for provider rate increases aimed at retaining Oregon’s Medicaid workforce and increasing inpatient psychiatric rates.  

“Just like we cannot solve homelessness without building housing, we cannot close our gaps in services without more places to get treatment and more people to provide that treatment,” her prepared remarks say. 

Her budget calls for using tens of millions in remaining American Rescue Plan funds to train behavioral health workers and build 336 more treatment beds, adding to a goal of 465 new beds statewide by 2026. Kotek will also seek $40 million for counties to continue deflection programs that allow people charged with drug possession to receive treatment instead of jail time. 

Responding to Trump

While president-elect Donald Trump isn’t mentioned by name in budget documents, his election, and fears that he’ll slash federal spending and programs developed by the Biden administration, triggered millions in proposed new spending for reproductive health, climate change, and federal lawsuits.

That includes an extra $2 million for attorneys in the state Justice Department to defend state laws, including access to reproductive health care, Oregon’s environmental standards, protections for immigrants, and trade agreements. Kotek also calls for another $2 million for Oregon’s Bias Response Hotline, run through the Justice Department. 

Her recommended budget also includes $7 million to help immigrants living in the state navigate the immigration system and find legal representation as Trump vows to deport hundreds of thousands of immigrants and potentially threaten sanctuary cities. Oregon for decades has been a sanctuary state by law, with state and local governments barred from assisting the federal government from enforcing immigration law.

Kotek also wants to add $2.5 million for grants to expand reproductive health services, including programs that help patients find services, and state funding for providers to upgrade facilities in response to an increase in patients seeking abortions. Clinician-provided abortions in Oregon — which does more to protect access to abortion than all other states besides Vermont — are up 40 percent since 2020, according to the Guttmacher Institute, which tracks reproductive health policy. 

Another $2.5 million in Kotek’s recommended budget would be reserved to protect Oregon from disruption in care if federal reproductive health funding declines under the next administration. The state already added to its stockpile of the abortion drug mifepristone.

Republished under Creative Commons license CC BY-NC-ND 4.0., courtesy, https://oregoncapitalchronicle.com.