Proposed Budget - Fiscal Years 2024-2025
On January 31, Oregon Governor Tina Kotek released a recommended budget for the fiscal 2024-2025 biennium. Over the next two years, the governor’s budget calls for $116.5 billion in spending from all funds, a 3.8 percent decrease from the enacted biennial budget for fiscal 2022-2023. This includes spending $30.3 billion from the general fund (an 8.8 percent increase from the fiscal 2022-2023 biennium) and $1.8 billion from lottery funds (a 27.5 percent increase). The decline in total spending can be attributed to a 9.4 percent decrease in federal fund expenditures (due mainly to the expiration of one-time federal COVID-related funds). The general fund budget is based on a beginning balance of $4.9 billion and projected general fund revenue of $25.7 billion for the fiscal 2024-2025 biennium after proposed revenue changes, the impact of a projected $3.7 billion tax credit attributable to personal income tax collections above forecasted amounts in the prior biennium under Oregon’s “kicker” law, and transfers into the general fund. This reflects an 8.8 percent decrease compared to legislatively approved revenue for the fiscal 2022-2023 biennium. The budget projects a $310 million balance in the general fund at the end of the fiscal 2024-2025 biennium. The state estimates that the combined balance in the Rainy Day Fund and the Education Stability Fund will be $2.0 billion at the end of the fiscal 2022-2023 biennium. The governor’s budget proposes to retain these reserve levels, while redirecting $765 million in projected new deposits during the next biennium to targeted investments in key priorities.
Proposed Budget Highlights
The governor’s “Mission Focused” budget recommendation focuses on three top priorities: (1) increasing housing and reducing homelessness; (2) improving access to mental health and addiction services; and (3) improving early literacy and K-12 education outcomes. The governor’s budget proposes a range of new and continued investments to support these priority areas, such as:
Housing and Homelessness
- $130 million early investment package to fund efforts to reduce unsheltered homelessness, with costs partly covered in fiscal 2022-2023 biennium
- $172.2 million for both rapid rehousing resources and long-term rent assistance
- $130 million to create new permanent supportive housing
- $118 million to preserve existing affordable homes
- $73 million to create an ongoing homelessness prevention program
- $24.1 million to maintain shelter operations
- $4.5 million for a risk mitigation fund for Permanent Supportive Housing providers
- $2.2 million to create the Housing Production and Accountability Office (HPAO), charged with reducing land use and permitting requirements that hinder housing production
- $770 million general obligation bonds for more affordable rental and homeowner housing
Mental Health and Addiction Services
- $195.7 million for continued funding for aid and assist services, certified community behavioral health centers, and other investments launched in 2021
- $40 million in ongoing funding for additional mental health residential capacity
- $278.9 million for addiction treatment, overdose prevention, peer support services and other investments in substance use treatment and services
- $47.6 million in ongoing funding for mobile crisis teams
- $127.4 million to continue behavioral health worker Medicaid rate increases
- $50.2 million to increase state hospital staffing, establish a dedicated Health Equity Unit, and cover other state hospital needs
- $40 million to continue support of the harm reduction clearinghouse that aims to reduce preventable deaths related to opioid use
- $60 million to continue loan repayment, scholarships and tuition stipends for licensed behavioral health providers and students
- $20 million for an incentive program to increase the state’s behavioral health workforce and recruit and retain diverse providers
- $18.4 million for funding to the nationwide 988 Suicide and Crisis Lifeline system
Early Learning and K-12 Education
- $100 million for evidence-based, targeted literacy strategies
- $20 million for summer programming focused on literacy, with districts required to provide a 50 percent local match
- $62.5 million for increased early learning provider rates and other program enhancements
- $41.3 million for employment-related daycare (ERDC) provider rate increases and other enhancements
- $100 million for expanding physical capacity of early learning facilities
- $30 million to continue funding summer enrichment programming
- $18 million to increase targeted investments in culturally specific student success plans
- Increase the State School Fund (school districts’ most flexible funding source) to $9.9 billion (a 6.5 percent increase compared to fiscal 2022-2023 biennium) and fully fund High School Success Fund to improve graduation rates as well as career-and college-readiness