Oregon lawmakers prioritize education, critical services in 2023-2025 budget framework
Continuing services, stability, maintaining reserves and prioritizing key areas: Those are the guiding principles in the 2023-2025 budget framework the co-chairs of the Oregon Ways and Means Committee have released.
The framework also calls for state agencies to cut spending by 2.5%, primarily by cutting back on purchases of supplies and delaying filling some vacant staffing positions.
"Right now, we are passing what we believe is a really strong and prudent budget," co-chair Rep. Tawna Sanchez, D-Portland, said during a Thursday news conference.
Loss in federal funding on the horizon
State economists in March told lawmakers there was "a significant amount of additional resources" available for them as they craft the upcoming budget, predicting nearly $700 million in additional combined resources for the 2021-23 and 2023-25 budget cycles.
It's an improvement acknowledged in the Co-Chair Budget Framework.
"The projected General Fund ending balance of $4.6 billion has also resulted in an estimated personal income tax kicker of $3.9 billion, which reduces available 2023-25 revenues," the budget framework notes.
Additionally, the framework warns, two biennia of "considerable investments through one-time federal relief funding and strong revenues" means the 2023-25 budget will not focus on new programs and investments but instead on ensuring existing services continue as that one-time funding tapers off.
The budget proposes maintaining service levels for program areas including education, healthcare and public safety, Joint Committee on Ways and Means co-chair Sen. Elizabeth Steiner, D-Portland, said during a news conference Thursday.
"[The framework] does not include any significant extras as yet except for the initial investments that we've made in housing and are making in the semiconductor industry for the CHIPS Act," Steiner added.
Recommendations for expenditures include $9.9 billion for the State School Fund for stable schools and improved literacy and graduation. It is $400 million above the current level, and includes funding for the public university and community college support fund and key functions in the Oregon Department of Education.
Other recommended expenditures include $11 billion in Human Services, a program area that has seen "significant upheaval over the past several years" due to the pandemic and an influx in federal resources that will go away, Steiner said.
A reduction in SNAP benefits to pre-pandemic amounts recently affected an estimated 720,000 Oregonians. And in April, the Oregon Health Authority and Department of Human Services will be required to reassess eligibility with the Oregon Health Plan, which will affect more than a million Oregonians. Enrollment grew from 1.1 million to 1.4 million during the pandemic.
"That's going to create significant transition and it's very important for us to provide protection for Oregonians who are determined no longer eligible and to ensure that they maintain access to high quality, affordable, evidence-based health care," Steiner said.
Other spending proposals
Other recommended expenditures include:
$3.3 billion for public safety programs.
$517 million towards economic and community development programs.
$800 million for Natural Resources, which is comprised of 14 agencies. General and Lottery funds account for 28% of Natural Resource agencies' budgets
$155.5 million for transportation programs, including the Department of Transportation and Department of Aviation. It includes a $2.4 million increase for the Cape Blanco State Airport runway and electrical rehabilitation, which is set to continue into the next biennium following delays.
$30 million for consumer and business services programs, which include the Bureau of Labor and Industries, the Public Utility Commission, and 17 professional and health licensing boards.
$380 million toward administration program areas, which are comprised of the Department of Administrative Services, Department of Revenue, Public Employees Retirement System, Office of the Governor, Secretary of State, State Treasurer, Employment Relations Board, Government Ethics Commission, State Library, Oregon Advocacy Commissions Office, Oregon Liquor and Cannabis Commission, Oregon Racing Commission, and the Office of the Public Records Advocate.
$195 million for the legislative branch. The budget for the legislative branch has grown by $60 million from 2019-21 to 2023-25, a 53% increase due in large part to capitol construction and costs associated with the Oregon State Capitol Accessibility, Maintenance and Safety project. The project is ongoing but additional costs in the upcoming biennium are expected to be paid through bonds. Spending in the legislative branch area is primarily driven by staffing costs, the framework notes, and reductions would likely require the elimination of positions.
$1.2 billion for the judicial branch, which represents a $67.2 million increase to support existing services and resources for the ongoing public defense crisis, expansion of the pretrial release program, reorganization of the Office of the State Court Administrator, and addressing cases related to the U.S Supreme Court decision that ruled nonunanimous jury convictions unconstitutional.
$50 million for the Emergency Fund, in addition to $14 million to the Emergency Board for fire severity resources.
$450 million for compensation adjustments to address future collective bargaining agreements. About $120 million of this is for state employee workforce retention and recruitment.
A compensation adjustment of $65 million for non-state employees.
A projected $50 million general fund and $15 million lottery funds for estimated debt service due to potential bond issuances early in the upcoming biennium.
$196.7 million for early investments in affordable housing, emergency homelessness response (House Bills 5019 and 2001), and semiconductor development (Senate Bill 4).
A focus on critical areas
The framework also reserves $325.6 million to support "the most critical issues facing the state," which include:
Medicaid eligibility redeterminations due to the end of the COVID-19 public health emergency. The declaration is set to expire in May.
Bridging healthcare coverage and establishing the Basic Health Plan, a new insurance plan for low-income Oregonians set to lose coverage when the federal public health emergency ends.
Oregon’s Medicaid waiver.
Public defense services.
Literacy.
Housing and homelessness reduction.
Behavioral health.
Reproductive health initiatives.
"Oregonians deserve to know that their tax dollars are being put to maximum use, to benefit as many people as possible," Steiner said.
The current estimate for these investments exceeds the total available funds, the framework notes. Estimates will continue to be refined and remaining resources will be directed towards the additional priorities, according to the framework. Being unable to achieve everything they hope for is a possibility, Steiner acknowledged.
"We will have some tough decision to make" if that is the case, Steiner said.
Next steps
The final 2023-25 legislatively adopted budget will be based on May's economic and revenue forecast.
Public hearings will be held at various locations across the state where the public can testify regarding their priorities on the state budget.
This article originally appeared on Salem Statesman Journal: Oregon budget framework prioritizes education, public safety
