New Oregon Governor Tina Kotek wants to spend $1 billion in the next two years to preserve and build more affordable housing, funnel more than $9 billion to public schools and devote millions to improve access to mental health and addiction services, under a $32.1 billion proposed spending plan released this week.
The governor’s budget proposal is not binding for legislators, who actually hold the “power of the purse” under the Oregon Constitution. But it serves as a moral document, signaling to lawmakers what the chief executive finds most important.
“The housing crisis is one of the largest emergencies we have ever faced in Oregon and the human suffering it causes to individuals, families and communities is unacceptable,” Kotek wrote in the budget document. “We can and must rise to meet the moment.”
Oregon is entering what Kotek termed a “challenging and complex budget environment” with about $3.5 billion of one-time funding, primarily from the federal government, which is soon to expire.
The state also has an estimated $2 billion in reserve funds, which Kotek has recommended keeping in place, but redirecting an additional $765 million that would have been automatically added to these reserves into “targeted investments aimed at better serving Oregonians.”
Kotek had previously called on the state to build 36,000 new homes a year, an increase of 80% over current production.
In her budget proposal, she outlined other key aspects of her ambitious housing push, including a $130 million package to fight unsheltered homelessness, $770 million in general obligation bonds to build more affordable homes and $172.2 million in rapid rehousing resources and connections.
On the behavioral health front, Kotek recommended allocating $60 million in loan repayment and scholarships for licensed providers and students, and $50.2 million to increase positions at the Oregon State Hospital, among other investments.
But the largest recommendation in her budget document was the eye-popping figure of $9.9 billion — Kotek’s proposal for the amount by which the State School Fund should be increased to help improve graduation rates and give students the tools to be career and college ready.
“Every Oregonian, no matter their race or zip code, deserves to have the same chances,” Kotek said. “My mission as Oregon’s governor will always be to deliver results and move the state forward to build the Oregon we all want to live in.
“This vision for Oregon’s future cannot be realized in one budget cycle. But this plan provides a roadmap for how we are going to reach our state’s long-term goals.”
In a statement, the House Republican Caucus criticized Kotek’s call for increased spending — her plan would represent an 8.76% rise from the state’s 2021-23 biennial budget — amid the challenging financial conditions facing workers, families and small-business owners.
“Oregonians are experiencing an inflation rate over 8%, and economists are predicting a mild recession over the next year,” the statement read in part. “The governor’s budget reflects the financial vulnerability individuals are feeling on a daily basis.
“House Republicans believe the state budget should look more after Oregon families than our state bureaucracy.”
Conservatives also lamented Kotek’s failure to address transportation backlogs, a severe drought impacting our agriculture industry, public safety in our communities, or Oregon’s severe public defender crisis.
However, they applauded the preservation of the kicker, a surplus credit estimated to return an average of $5,200 back to Oregon taxpayers this year.
“Oregonians across the state feel the impacts of inflation and other rising costs,” Senator Daniel Bonham, R-The Dalles, who also represents Canby, said in a statement. “They deserve to spend their hard-earned money how they see fit — to plan for emergencies and spur the economy.”
To learn more about the governor’s budget proposal, see the summary available here.
