State Budget Tightens, Despite Revenue Increase

The Oregon Joint Committee on Ways & Means released a new budget for the next year, showing Oregon will bring in $20.6 billion in revenue by the end of June, $147 million more than expected. However, the budget proposes cutting nearly all state programs by 5 percent, with the exception of healthcare and education. Legislators cite predictions of an upcoming downturn in growth, and are also proposing shifting an additional 1 percent of revenue into the state’s “rainy day” fund for this reason. 

“We want to acknowledge that this is not a perfect budget,” said Rep. Dan Rayfield (D-Corvallis), one of three co-chairs of the Ways and Means Committee, “But our job is to balance the budget with the resources we have.” 

Legislators also noted the “spiraling” pension debt and a Medicaid funding gap, both of which contributed to the more conservative fiscal outlook of the budget. 

The bill is absent Gov. Kate Brown’s request for $200 million in additional education funding, instead finding $100 million via new sources like recreational marijuana taxes simply to maintain funding levels that account for increases in pensions and employee benefits. Senator Elizabeth Steiner-Hayward (D-Beaverton), another co-chair on Ways & Means, said that many school districts will still end up with deficits. 

The state is also facing down an $800 million funding gap for Medicaid. This gap was partially closed by a $379 million health care package passed recently, but continues to be exacerbated by shrinking federal matching funds for healthcare. The committee had to utilize $350 million from the state’s general fund to keep healthcare systems funded “without cuts to eligibility and benefits.” 

Gov. Brown has proposed paying for some of these increasing costs by raising tobacco taxes or by raising taxes on employers who have a high number of employees on Medicaid. Legislators say they based their budget on existing laws and revenues, not proposals or pending legislation.