Gov. Kate Brown unveiled a two-year budget proposal Tuesday that sees slight increases to education spending and deep cuts to Oregon hospitals.
The 54-page summary of the proposal released by the governor's office was light on details and centered around overcoming the state's multiple crises, from the COVID-19 pandemic to the fallout from this year's wildfires.
The proposal envisions $100.2 billion in total spending over the next two years and taps $25.6 billion from the state's lottery and general funds.
It's unclear how dependent Brown's proposals may be on future federal relief, which she urged Congress to approve in light of a potential surge in COVID-19 cases before Christmas.
Tax revenue for the state is expected remain strong in 2020, state analysts reported in November, even while Oregon wildfire damages and pandemic relief.
Under Brown's proposal, the Oregon State School Fund will see a $100 million increase placing it at just $9.1 billion, which will likely cover current operating expenses alone.
Brown acknowledged on Tuesday that the amount will not be enough to meet anticipated costs in coming years.
“This budget doesn’t put enough money into our schools,” Brown said. “It’s a budget built on sacrifice and hard choices. We need the federal government to stand up and respond to this moment of crisis.”
The governor's proposal nevertheless funds Measure 98 and distributes $778.8 million in Student Success Act funds directly directly to school districts.
The Community College Support Fund will remain largely the same after accounting for inflation.
Jim Green, executive director of the Oregon School Board Association, said in a statement on Tuesday that the proposal will not account for the cost of extending the 2021 school year as school leaders are considering.
“This provides a starting point, especially in focusing on equity and addressing the needs of traditionally underserved students,” Green said. “But Oregon still has a long way to go to make up ground our students have lost during the pandemic.”
Brown also said on Tuesday she is looking to shut own three of the state’s 16 prisons—Shutter Creek Correctional Institution, Warner Creek Correctional Institution, and Mill Creek Correctional Facility.
The prisons which can hold 1,100 inmates combined and Brown said the prisons are no longer needed to support the state’s incarcerated population.
An Oregon Employment Department report from May found that incarceration rates in the state are expected to fall flat by 2030.
From July 2021 and 2023, the closures are estimated by Brown's office to save the state nearly $50 million in deferred maintenance.
Brown's proposal earmarks $69.5 million for affordable housing and homeless services to meet the state's goal of adding 25,000 more housing units statewide.
A report by the League of Oregon Cities found that the state underproduced at least 155,000 housing units since 2015.
The governor announced on Tuesday that her office estimated as much as $325 million in back rent could be owed by the end of the year.
In relation, Portland Mayor Ted Wheeler said in September that Portland alone could boast as much as $125 million in back rent.
A plan proposed by state lawmakers last week would set up a $100 million fund to reimburse Oregonian landlords with certain conditions.
Despite adding more than 150,000 Oregonians this year, the Oregon Health Plan (the state's version of Medicaid), is estimated to fall more than $400 million short, Brown said on Tuesday.
The situation will likely require the state's health care institutions to make unspecified cost-cutting measures, according to Brown.
Oregon health care representatives balked at that prospect on Tuesday.
“[The governor] has chosen to propose direct cuts to hospitals in the midst of the biggest public health crisis in a century,” wrote Becky Hultberg, president and CEO of the Oregon Association of Hospitals and Health Systems. “Cuts of this magnitude could force hospitals to reduce services to Oregonians during a pandemic. These cuts cannot be justified.”
These deep cuts come as Oregon state hospitals contend with a record revenue shortfall since the state banned elective and non-urgent medical procedures to preserve medical resources.
At the same time, Brown said she is considering expanding state health care plans to include undocumented adults, but did not say how she would pay for it.
Brown's proposal included a range of other spending packages across the board.
At least $146.4 million will be devoted to modernizing the state employment department's aging computer systems which received $80 million in federal money for exactly that more than a decade ago.
Another $73.7 million will go towards for firefighting resources along with $360 million for wildfire cleanup and rebuilding costs.
Brown will also attempt to close the pay gap between prosecutors and public defenders with $20 million in pay scale increases.
Special session prospects
The governor did not signal Tuesday whether a December special legislative session was in the works for sure.
Brown did say that she is considering declaring a catastrophic emergency to enable lawmakers to convene virtually on January 11 for the 2021 session.
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