LOC News
Governor Releases Recommended Biennial Budget for FY 25-27
This week, Governor Kotek released her recommended budget, and the top three priorities appear to be housing/homelessness, behavior health and education funding. Oregon’s budget is a tool to carry out the state’s law and policy decisions. It appropriates the state’s general fund, allocates the state's lottery fund, and expends the state's other funds and federal funds. The budget covers two fiscal years, meaning it runs from July 1 of an odd-numbered year to June 30 of the next odd-numbered year. For example, July 1, 2025 to June 30, 2027 would be considered a biennium.
The Oregon budget process has three major steps:
- Agency Request Budgets – state agencies provide budgets to the governor’s office based on their programs.
- Governor Recommended Budget (GRB) – the governor proposes a budget based on the agency request budgets and aligns it with her vision and priorities for the state. The GRB is usually released the first week of December of even-numbered years.
- Legislative Adopted Budget – during the long legislative session the Oregon State Legislature starts with the GRB and makes changes based on their priorities and must pass a budget by the close of session. The Legislature may make changes to the budget over the biennium during the short session or special sessions.
After the recent revenue forecast, the GRB anticipates $39.4 billion of resources coming in via taxes and carry forward and has proposed a budget for $39.3 billion.
Highlights of the GRB:
Infrastructure
- $100 million to establish a new Housing Infrastructure Program. These new funds will establish a program to fund water, sewer, stormwater, and transportation infrastructure linked to new housing development to unlock thousands of new affordable and market rate rental and homeownership units.
- $60 million in lottery bonds to recapitalize the Special Public Works Fund. This is a decrease from $90 million in the prior biennium.
- $31 million, including $11 million to continue and strengthen protection of Oregon’s water quality and quantity and $20 million in lottery bonds. These funds will help protect and manage the surface and groundwaters that supply Oregonians with drinking water by supporting programs to repair or replace domestic drinking water wells; provide safe drinking water to communities experiencing drought and drinking water emergencies; and enhance protection of groundwater aquifers at risk from pollution, as well as surface waters experiencing harmful algae blooms.
Housing/Homelessness
- $880 million new bond authority to build more affordable rental homes, permanent supportive housing and affordable homes for purchase.
- $217.9 million to maintain Oregon’s statewide system of shelters.
- $188.2 million to maintain current efforts to transition Oregonians out of homelessness and into housing.
- $173.2 million to maintain services to prevent Oregonians from becoming homeless in the first place.
- $105.2 million to maintain long-term rental assistance.
- $6.4 million in expanded investments to partner with cities and developers to expedite housing development.
Transportation
- $7.3 billion total funds, representing a 15.3% increase from the previous biennium. This includes new revenue of $1.75 billion, which largely covers the Oregon Department of Transportation’s funding needs, including operations and maintenance challenges. There is no additional funding recommended for local governments. For comparison, the 2017 transportation package had an infusion of $5.3 billion of new revenue over a seven-year period. It is expected that the Legislature will identify additional revenue for the final 2025 transportation package that will also include distributions to local governments.
Behavior Health
- Proposed spending for human services agencies, which includes the Oregon Health Authority and the Department of Human Services, asks for $2.9 billion more than the current two-year budget. $330 million is expected to go towards increasing the state's treatment capacity and its workforce.
Energy/Environment
- $25 million additional investment for the Community Renewable Energy Program.
- $1.2 million in continuing funds to address communities most affected by smoke and heat.
Wildfire
- $150 million one-time funds from the state’s reserve account to pay for immediate wildfire costs following a fire season so contractors are paid in a timely manner. This is being offered because the governor called a special session to fund $218 million for wildfire costs from the 2024 wildfire season.
- $130 million toward funding the state’s wildfire readiness and mitigation efforts, bringing the funding level to SB 762 levels from the 2021 legislative session.
- The Legislature will be evaluating funding options and changes in wildfire policy to establish a more reliable and stable funding program.
Resources:
Contact: Jenna Jones, Lobbyist – jjones@orcities.org
Last Updated 12/6/24