SALEM, Ore. — Oregon Gov. Tina Kotek introduced her budget proposal for the 2025-27 biennium in a press conference on Monday, highlighting continued funding for housing development, homelessness initiatives and behavioral health capacity. The largest new investments come in the form of support for schools and other learning programs.
In all, Kotek's plan costs $39.3 billion — just under the revenue that Oregon is expected to have on hand over the next two years.
“My approach to being your Governor will always be grounded in truth, pragmatism, and a relentless pursuit of equitable outcomes for all Oregonians,” Kotek said in a statement. “The December revenue forecast projects stability for Oregon, and I am pleased to share that my budget does not lay off people or cut services, and instead strategically deepens our commitment to building progress on Oregonians’ top priorities while remaining disciplined when it comes to new programs."
Much of the proposed funding will be familiar to Oregonians following along with Kotek's agenda since she took office at the beginning of 2023. Right out of the gate, she introduced a platform focused on building out housing and addressing homelessness, issuing an emergency declaration.
The new budget proposal would allocate $217.9 million to maintain Oregon's homeless shelters statewide, $188.2 million to maintain efforts transitioning people from homelessness into housing, and $173.2 to maintain programs meant to keep precariously housed Oregonians from becoming homeless.
On the housing side, Kotek's budget proposes $880 million in new bond authority to build affordable housing and pathways to homeownership, $199 million in new funds to build out the infrastructure necessary for new housing — things like water, sewer and transportation — and $57.6 million in support for first-time homebuyers.
For behavioral health, much of Kotek's proposal represents General Fund dollars being deployed to replace expiring funding from the federal American Rescue Plan Act, or ARPA. That includes $90 million from the General Fund for capacity in adult mental health services, residential drug treatment and withdrawal management. It also includes $50 million in backfill to support growth in the behavioral health workforce, and $40 million to maintain county-side deflection programs that offer treatment instead of prosecution for people caught in possession of drugs.
Finally, Kotek's proposed budget allocates the most new funding to education, starting with a $600 million increase to the State School Fund Current Service Level — raising that number to $11.36 billion.
"The Governor is recommending a three-pronged approach to adjusting funding for the State School Fund to move the needle on student outcomes and provide more accurate and predictable funding for K-12 public education across Oregon, along with adjusting the calculation to account for the recent PERS rate increase," her office said.
Kotek previously proposed a series of tweaks meant to increase the current service level by altering the way it is calculated. At the time, her office estimated an increase of about $515 million.
Along with that boost to the service level, Kotek proposed $205.5 million in targeted funding for early literacy and summer learning programs. Another $25 million would go toward residential and community-based behavioral health programs focused on youth.
“Over the last two years I have had the opportunity to travel to all 36 counties, visit Oregon’s nine federally recognized Tribal nations, and continue consulting with the Governor’s Racial Justice Council," Kotek said. "These conversations have helped inform my approach to decision making and have strengthened my ability to be a Governor for the whole state.
“As I approach the halfway mark of my first administration and take stock of where we have been and where we are going, I fundamentally believe the Legislature needs to pass budgets for the next two years that build on the progress we have achieved together.”
Kotek has suggested using a one-time redirection from Oregon's reserve funds to pay for outstanding firefighting bills from the historic 2024 wildfire season, and has called a special session next week to tackle the issue. But long-term solutions to Oregon's shortfalls in forestry and firefighting, in addition to mounting concerns about transportation funding, will more than likely be left up to the legislature when it reconvenes for its next regular session early next year.
Criticism and opposition
Senate Republican Leader Daniel Bonham (R-The Dalles) released a statement Monday calling Kotek's budget proposal "bloated" and suggested that more spending on the issues highlighted by Kotek would be counterproductive.
“More government spending and bureaucracy won’t fix Oregon’s housing crisis, homelessness epidemic, health care affordability, or students’ success — it’ll make these issues worse," Bonham said, in part. "They say, ‘the governor proposes, and the legislature disposes.’ Thankfully, this political statement of a budget will face legislative scrutiny because it ignores the real needs of Oregonians."
Bonham also pointed out the conspicuous absence of a significant funding boost for the Oregon Department of Transportation, which he said is asking for an additional $1.7 billion per year. That hole will "likely be filled with new taxes" instead, he said.
At the same time, representatives for both Oregon's public universities and its community colleges said that the investments in higher education through Kotek's proposal were insufficient. State universities argued that the budget would put them just below base funding levels, and at least $275 million less than what they're requesting.
“Oregon’s students face some of the highest tuition costs in the west, largely because the state invests much less per student than our neighbors do,” said Karl Scholz, president of the University of Oregon and chair of the Oregon Council of Presidents. “This $275 million investment is needed to give every Oregonian a fair chance at a four-year degree, regardless of their background, while helping our universities continue to support the state’s workforce and economy.”