NEWS UPDATE FROM STATE REPRESENTATIVE DAVID GOMBERG: A Deep Budget Dive

By Representative David Gomberg, House District 10

10/27/2025

Dear Friends and Neighbors,

Content Warning: I’m going to talk about our state budget. It is not exciting stuff! But budgeting is a core legislative function – often more important than passing policy. Informed citizens should understand it just a little better.

I talk a lot about our state budget, how it affects the economy, the taxes you pay, and the services or benefits you receive. Sometimes it is helpful to step back and look at the big budget picture and what kind of money we’re talking about.

Budget resources or income include Federal Funds, General Funds, Lottery Funds, and Other Funds. Federal Funds are dollars sent to Oregon from Washington DC, often for specific purposes. General Funds are your income tax dollars and corporate taxes. Other Funds are fees and special taxes, like gas taxes or professional licenses. And Lottery Funds are the monies produced through the Oregon Lottery and related bonds.

We budget in two-year cycles called a biennium.

The legislatively adopted budget (LAB) for the 2025-27 biennium is $138.9 billion total funds, which is an increase of $7.7 billion, or 5.9%, from 2023-25. The total budget for 2025-27 includes $37.3 billion General Funds, $1.8 billion Lottery Funds, $56.1 billion Other Funds, and $43.7 billion Federal Funds. Combined General Fund and Lottery Funds of $39.1 billion increased 11.7% over the prior biennium.

The increase is largely due to an 11.8% increase in General Funds. The General Fund has seen a continuing trend of double-digit growth since 2013-15. But current projections see that number leveling off.

The following charts provide a history of Oregon’s total funds and General Fund and Lottery Funds budgets from 1985-87 through the 2025-27 biennia:

In addition to General Fund changes, revenue forecasters are now projecting reductions in Other Funds and federal funding. As changes in the projected revenues for the biennium occur, the Legislature may be required to make adjustments to the budget. That’s unusual.

A constitutional amendment adopted by voters in November 2010 changed the historical Oregon every-two-year process into annual legislative sessions. The session is limited to 160 calendar days in odd-numbered years when a two-year budget is adopted. The Oregon Constitution requires that budget to be balanced. The “short” session in even-numbered years is limited to 35 calendar days. Budgets can be adjusted in the short session. Special sessions can also be called.

Development of the 2025-27 budget followed a fairly normal course during the 2025 session:

Planning for 2025-27 started in the spring of 2024 with agency budget development, followed by the release of the Governor’s Recommended Budget (GRB) proposal. This tentative budget is based on the projected revenues and the “current service level”, which is the amount estimated to be needed to continue all currently approved programs and services for the next two years
Leaders of the Joint Committee on Ways and Means released their Co-Chair Budget Framework in March that outlined a plan for development of the 2025-27 budget focused on maintaining core services, ensuring adoption of a balanced budget, and the ability for the state to respond to changes in federal and state revenues.
A series of community hearings were held by the Joint Committee on Ways and Means between March 22 and April 25 to receive public input on budget priorities across the state. The hearings were held in Gresham, Astoria, Warm Springs, La Grande, Salem, and Klamath Falls, with over 2,700 attendees. The opportunity for virtual testimony was provided at the Salem hearing for people who were unable to attend a community hearing in person.
Throughout the session, seven budget sub-committees reviewed 100 state agency proposals and conducted public hearings.
An April revenue forecast provided the final estimate of available funds to balance the budget.
In addition to the 100 agency budget bills, the Joint Committee on Ways and Means received 494 policy bills that might cost money. These bills were first heard in policy committees and, if approved there, were forwarded for possible inclusion in the budget. Of these policy bills, 107 were eventually passed by the Legislature.
A final budget was adopted by the Legislature by the constitutional deadline, and the legislature adjourned.

The total 2025-27 legislatively adopted General Fund and Lottery Funds budget by program area is reflected in the chart below:

General Fund and Lottery Funds expenditures of $39 billion this biennium included $271.9 million in targeted reductions.

In making reductions, subcommittees often made difficult decisions to prioritize programs that resulted in the least impact on needs and service levels. The budget also reserved funding for changes in state employee compensation, a general-purpose Emergency Fund, and special appropriations to address health and human services caseload changes and natural disasters.

Generally, funding for schools, health care, and housing went up. Other spending went down.

The May 2025 economic and revenue forecast reflected a $532.2 million decline in forecasted General Fund and discretionary Lottery Funds resources from the level projected in March when the budget framework was produced. This required the budget plan to be rebalanced in the last few weeks of session to accommodate the lower level of available resources.

Not all available income was spent. The budget retained a 1.5% General Fund ending balance and a discretionary Lottery Funds balance of $45 million to meet a statutory Rainy Day Fund deposit requirement and support possible cost increases during the biennium.

If you want to read more. The Oregon Legislative Fiscal Office has published its 2025-27 Budget Highlights report. Read the full report here.

So …. If you are still reading, the bottom line is that costs are going up faster than revenue, and that revenue is declining. We approved a two-year budget and will soon need to change it. With a better understanding of changes wrought by federal tax adjustments and a decline in federal fund sharing, agencies are already being asked to plan for further reductions and the legislature is preparing to reduce spending by roughly one billion dollars.

As we engage in this difficult belt-tightening process, some lawmakers are asking if we can budget better.

As I explained earlier, Oregon budgeting begins with the current service level – what we are spending now – and adjusts by either considering cost increases or eliminating programs.

What’s the alternative?

There’s a concept called zero-based budgeting. Oregon doesn’t use it. Zero-based budgeting requires each agency to justify every program and every expense for the next budget cycle. It’s like building each budget from the ground up. “If we were starting over, is this what we would do?” Trying to take that approach when each agency is before the budget committee for just a few hours is not practical. The work is time-consuming and labor-intensive. But it can ensure the agency’s work aligns with the state’s priorities.

Read more in the Capital Insider.

As the government shutdown stretches into its fourth week, most of the nearly 23,000 federal employees in Oregon are still going without pay.

An analysis by the Oregon Journalism Project indicates that back pay for Oregon’s federal workers has surpassed $140 million already. Federal jobs are spread across all 36 Oregon counties, but the shutdown is hitting rural counties more than others.

Lincoln County currently gets 2.7% of annual county wages from the federal government. That’s 262 jobs. Current unpaid federal wages are estimated at roughly $1.5 billion. In Benton County, the numbers are twice as high. View this map at the original source to see data on a county-by-county basis.

In my newsletter last week, I provided links to targeted Unemployment Insurance (UI) and other benefits for impacted workers.

Many Oregonians are understandably worried about how a shutdown could affect food assistance. On October 10, the Trump administration notified states that they should not issue November Supplemental Nutrition Assistance Program (SNAP) benefits until further notice. One in six Oregonians receives SNAP benefits – more commonly known as food stamps.

On October 20, Governor Kotek announced that if the federal government shutdown continues, more than 750,000 Oregonians enrolled in SNAPP will not receive benefits after the end of the month. More than half are children, seniors, or people with disabilities.

If the shutdown ends by the evening of October 31, ODHS can issue November benefits on time. If it continues beyond that date, benefit distribution will be delayed. This type of delay has never happened before.

For the fastest updates, SNAP participants are encouraged to sign up for a ONE Online account or download the Oregon ONE Mobile app available in the App Store and Google Play.

While we wait for more information, there are a few steps SNAP participants can take to prepare:

Check your EBT balance. Any unused SNAP benefits will still be available after November 1, 2025.
Know where to find emergency food . If you need immediate assistance, local food pantries and community partners can help.
Stay current with your SNAP case. Complete renewals on time and report any changes to ODHS.
Follow ODHS channels . Updates will be shared promptly through social media, websites, and community partners.

Samaritan Health Services announced this week that it is integrating with a larger health system based in Washington state.

Samaritan Health Services says its proposed merger with a Tacoma-based medical provider will not immediately affect the operations of Samaritan Pacific Communities Hospital in Newport and Samaritan North Lincoln Hospital in Lincoln City. Lincoln Chronicle photo.

Samaritan, which runs five hospitals and numerous clinics—from Lebanon and Albany west through Corvallis and to the coast—says it hopes to finalize its deal with the Tacoma-based MultiCare Health System by summer 2026.

The affiliation, Samaritan says, will enable it to remain a locally led and governed community-based health system, and retain its name, “while gaining access to new resources and expertise.”

The deal must still be approved by state and federal regulators.

Both entities are nonprofits. MultiCare, which has 13 hospitals and more than 300 clinics throughout Washington, reports 28,000 employees, compared to Samaritan Health Services’ 5,000.

In Lincoln County, Samaritan employs 841 people, has standalone hospitals in Newport and Lincoln City, and eight clinic locations in Newport, Lincoln City, Depoe Bay, Waldport, and Toledo.

Samaritan Health Services operates in Lincoln, Benton and Linn counties.

Samaritan reports about $1 billion in assets. It operated at a significant loss in its 2024 fiscal year, the latest on record. MultiCare, in contrast, reports about $8.2 billion in assets. While in recent years it, too, has lost money on its operations, separate income has carried it well into the black.

A Samaritan web page set up to answer questions about the MultiCare deal said it will not cause immediate changes for patients, who will continue to see their current providers and continue to be able to access their patient portal.