Oregon Democrats propose major new spending as part of budget ‘rebalance’

Oregon Democrats are proposing more than $425 million in new spending in order to help the state address rising social services caseloads, prepare for wildfires, and more.

The new allotments were unveiled Wednesday as part of a package of bills that make up an early-session budget “rebalance” – a way for the state to reconcile increased costs and balance the books in the current two-year budget before it expires on June 30.

The bulk of the new spending is aimed at the Oregon Health Authority and Department of Human Services, which both report a higher demand for services than anticipated two years ago.

OHA would receive nearly $200 million that would help meet demand for healthcare costs through June under the Oregon Health Plan and the related Healthier Oregon Program, which serves undocumented immigrants.

DHS says a rebound in demand for services among the aging and people with intellectual disabilities requires an additional $161 million before the next budget kicks in.

The legislative budget committee says an increase in state spending in those two agencies will help the state bring in $1.2 billion in federal matching funds.

Such adjustments aren’t rare in early-session budget bills, but lawmakers are also proposing tackling a series of other issues – all of it with money that so far went unspent in the current two-year budget. They include:

• $6 million to help the state’s Department of State Fire Marshal prepare for the 2025 wildfire season. That proposal comes after lawmakers approved $218 million aimed at paying for the 2024 wildfire season in December. The Legislature has made finding reliable funding for wildfire prevention a key issue in this year’s session.
• $10 million to help DHS avoid housing foster children in hotels. The money had previously been approved for the agency, but was used instead to help pay for wildfire bills last year.
• $50,000 to pay for a “third-party management review” of the Oregon Department of Transportation. That money was requested by state Sen. Bruce Starr, R-Dundee, who has been charged with watchdogging the agency as the Legislature considers major new funding for roads and bridges.
• $7.5 million to help the state pay people imprisoned after being wrongfully convicted. The Oregon Department of Justice has come under fire for fighting many such payments, approved in a 2022 law.
• $5 million to help the Department of Emergency Management build a stockpile of supplies for future emergencies.
• $5 million to support container shipping at the Port of Portland’s Terminal 6. Gov. Tina Kotek called on lawmakers to approve that money last year, as part of a $40 million subsidy she has proposed for the terminal.
• $4 million to pay for language interpreters for courtrooms in the state.
• $250,000 for testing well water in Crook County, where property owners have complained about potential contamination of their domestic water supplies.

If approved, the proposed spending would reduce the money lawmakers have left at the end of the 2023-25 budget by $425.6 million.

The state’s top budget writers, state Rep. Tawna Sanchez, D-Portland, and state Sen. Kate Lieber, D-Portland, said much of the spending was already accounted for in a revenue forecast delivered last week. That forecast suggested lawmakers can count on $350 million more than previously expected as they build the next two year budget.