NEWS UPDATE FROM STATE REPRESENTATIVE DAVID GOMBERG: The Highs and Lows of Tax Cuts and Program Reductions

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By Representative David Gomberg, House District 10

8/18/2025

Last week I wrote about the effect of the so-called One Big Beautiful Bill on Oregon taxpayers, Oregon tax revenue, and the Oregon economy.

Some of you asked about details on what the bill might save you or what it might cost.

  • For high-income earners, households in the top tenth would see, on average, $13,600 more annually, about 2.7% of their projected income, according to the Congressional Budget Office.
  • Households in the middle 20% of the income distribution would receive, on average, between $800 and $1,200 more per year, which would account for 0.8% to 1% of their income. However, those savings are scheduled to phase out over time.
  • Major changes to Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, mean Americans at the bottom of the income distribution will see a net loss of benefits, CBO said. The lowest tenth of households by income would see a drop of about $1,200 per year, which accounts for 3% of that group’s projected income.

That is hard news for parts of Oregon where incomes tend to be lower.

“It is truly unfathomable that Trump and Republicans in Congress are championing a bill that gives the top 10 percent $13,600 more per year – while the least affluent 10 percent will lose $1,200 per year,” Senate Budget ranking Democrat Jeff Merkley said. “This is families lose, and billionaires win.”

Oregon House Republican leader Christine Drazan, R-Canby, downplayed the impact of the federal legislation. “Oregon’s future is cause for concern—not because the federal government preserved tax cuts for families or is working to reduce the national debt—but because Governor Kotek is determined to sidestep accountability and raise billions in taxes on Oregonians who can’t afford it,” Drazan said in a statement, apparently referring to Kotek’s push to hike state taxes to fund transportation services.

“The Trump Administration and Republicans in Congress have betrayed American children and families, who will become sicker, hungrier, and less prosperous because of President Trump’s budget bill,” Governor Kotek said in a statement. “Oregonians will see less of their federal tax dollars coming back to our state for things they count on.”

Beyond impacting direct federal payments, an analysis released last month suggests that tax cut provisions within the bill will eat into Oregon’s state revenues by nearly $1 billion during the current budget, which began July 1. That’s because the state uses federal taxable income as a beginning point when calculating what residents owe in state taxes. The preliminary analysis determined that Oregon could lose out on roughly $972 million in the two-year budget period that began in July.

Federal funding reductions will further affect the Oregon budget. National dollars make up roughly a third of the state’s two-year budget.

And there are worries the state’s budget picture could soon sour even more. Weak job market data and other economic factors could lead state economists to rethink their revenue projections, potentially prompting further reductions in next year’s short legislative session. The state’s next revenue forecast is scheduled for August 27.
The money that Oregon receives and currently spends in state taxes are one part of the situation. Another concern is the reduction in Federal spending and whether Oregon will need to replace those services or how families will be affected if we do not.

All numbers shown are in millions of dollars. Governor Tina Kotek released a budget analysis that estimates the state will lose $15 billion in federal funding for health insurance coverage, food benefits and other programs. Those impacts are expected to ramp up in the years to come. Kotek’s analysis predicts a federal funding reduction of $5.7 billion in the 2027-29 budget, and $8.4 billion in 2029-31.
Oregon stands to lose more than $15 billion in federal funding for health care, food assistance and other purposes in coming years, under the sweeping Federal legislation. That’s the preliminary conclusion by Governor Tina Kotek’s office, which in recent weeks asked state agencies to crunch the numbers for what the so-called One Big Beautiful Bill Act might mean for their ability to provide services.

Kotek’s office says that Oregon will lose out on nearly $11.7 billion that currently funds health care through the Oregon Health Plan. As of June 2025, 1 in 3 Oregonians—and over half of those under age 18—were enrolled in the Oregon Health Plan, according to state health authority data. The more frequent eligibility checks required by the bill will cost upwards of $100 million for the state to implement and will require updates to technology systems and new administrative positions.

Hospitals are still required to provide support to emergency patients who cannot pay. But emergency response is more expensive than ongoing care. And lack of reimbursement will either drive up costs for everyone or further compromise the financial future of local hospitals.

The state’s Department of Human Services expects $3 billion to disappear that helps low-income Oregonians afford food via the Supplemental Nutrition Assistance Program, or SNAP. In Oregon, one in six people access SNAP benefits every month.

Oregon had been promised nearly $200 million in federal funds to fight climate change through the Inflation Reduction Act. But the new budget bill seeks to eliminate much of the federal government’s involvement in climate change response. It reduces investments in climate science, stops federal tax credits for people buying electric vehicles or making homes energy efficient, and it restricts programs that seek to limit carbon emissions from industry.

Oregon will see more logging, but less timber money going to local communities and less support for private forest owners. That’s a change from current practice. Many counties in rural areas rely on a cut of revenues from timber sales on federal public lands to pay for schools, law enforcement and public infrastructure. “They are removing timber receipt sharing, so that timber receipts go back to the Treasury and they are not going to schools,” Democratic U.S. Representative Val Hoyle said Wednesday. “The places they are hurting most are our rural communities” And renewable energy projects planned for federally owned lands could cost much more to develop and run.

Finally, among the most significant impacts of the bill are changes to the federal government’s largest form of financial aid for low-income college students. It also includes a provision that eliminates financial aid that allowed students to borrow funds to cover housing and food expenses.

Read more about impacts to Oregon here.

 

Reviewing spending programs to save money and reduce deficits is an important government function. However, in this case, most spending reductions are being used to support tax cuts. Opinions vary on whether this is appropriate. According to the Yale Budget Lab, the bill is expected to raise the federal deficit by at least $3 trillion over the next decade.

Read this brief editorial in the bend Bulletin. “We would be fully behind any effort to cut fat out of government. We don’t see much fat here.”
In 2021, Oregon received a massive federal grant to help recover from the destructive 2020 wildfires – $422 million. The federal aid, which it calls “ReOregon,” hasn’t gone as hoped. Nearly five years later, records show that more than 90 percent of the money remains unspent, even as hundreds of families await relief.

I have been critical of the delays and persistent in my support of survivors here and around the state. This week I saw evidence things are at long last, starting to move here in Lincoln County.

About 300 homes were lost in the September 2020 Echo Mountain fire. Relief dollars intended to help survivors recover are just now becoming available.
Lincoln County has received a $9.75 million grant to develop affordable housing for survivors of the 2020 Echo Mountain wildfire who are still without a stable, permanent residence. They are now working to identify qualified applicants and use funds to help them buy, build, or rent.

This week, I attended a gathering for wildfire survivors at the Driftwood Library in Lincoln City specifically geared toward reaching people contacted through the county’s wildfire resource navigation program and who have not resettled after the fires. County staff have identified 20-30 households that qualify for the program by meeting the 80% Area Median Income requirement and demonstrating that they were residents of Lincoln County in September 2020.

The survivors fall into roughly three categories:

  • Those who own land and want to pay for replacement housing
  • Those who rented and now want to buy a home
  • Those who just want to rent a home.

Qualified applicants will receive help from the County on a first-come-first-served basis. The grant funding will be used to essentially guarantee home loans of up to $500,000. For those who desire to rent, the County will work with the Housing Authority of Lincoln County to manage acquired rental properties, and rent will be scaled to the renter’s income.

Along the winding roads in Otis, there are still sections of bare trees and scorched land. Signs are still hung with the words “Otis Strong.” On my own street, where one-third of the homes were lost and a third more lost wells or outbuildings, half the survivors have not yet returned.

You can watch the full presentation during the Board of Commissioners meeting here. If you need more information about this Lincoln County program, email my office.
Earlier this year, I received an invitation from the Oregon Historical Society to visit their secret “vault” – a 100,000 square foot, state-of-the-art warehouse that is home to the vast majority of their remarkable collection.

Ordinarily, it would be a challenge to get me to leave our sprawling district during our legislative interim and head to the Portland area – especially when temperatures are a lot more tolerable here! But this “vault” has always been at the top of my list to visit. On Thursday, my staff and I arrived at the undisclosed location and got to see firsthand some of the oddities and artifacts the Oregon Historical Society has been collecting over the past 125 years.

 

From whale bones discovered by Lewis & Clark to the dress worn by Governor Barbara Roberts’ during her inauguration, the breadth and scale of Oregon’s history collected in one single place was simply breathtaking.

We saw an overwhelming assortment of objects reflecting Oregon’s storied history. Just a few examples that stood out to me: a 19th Century seafood canning machine, indigenous baskets and artifacts – including those from ancestors of the Confederated Tribes of Siletz Indians here in House District 10, a diving suit used by the inventor of the first underwater camera, and the inaugural dress worn by my dear friend, Governor Barbara Roberts.
The Oregon Historical Society was incorporated in 1898 and has been preserving our state’s collection of objects, photographs, maps, manuscript materials, books, films, and oral histories ever since. Check out their website to learn more about their upcoming events, their museum in Portland, and other ways you can engage with the organization.
With the Special Session quickly approaching, I’m making an extra effort to hear what District residents think.

Saturday, I joined a Benton County Town Hall with Representative Finger-McDonald and House Majority Leader Ben Bowman. The event was well attended, and questions focused on transportation, health care, emergency response, and the Big Beautiful Bill.
Wednesday, I will join Senator Wyden at a Town Hall in Philomath. August 26, I am the speaker – and listener – at the Lincoln City Chamber of Commerce luncheon. On September 2nd, I will share and take questions with the Oregon Coast Learning Institute. And September 11, I will speak at Hear Here in Newport.

I’m also scheduled to discuss emergency resilience and recovery on OPB’s Think Out Loud Tuesday this week.

I hope to see you and hear from you soon!
email: Rep.DavidGomberg@oregonlegislature.gov

phone: 503-986-1410

address: 900 Court St NE, H-480, Salem, OR, 97301

website: http://www.oregonlegislature.gov/gomberg