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Governor Brown unveiled her 2021-23 recommended $25.6 billion budget that holds K-12 spending steady and provides support for wildfire victims while trimming health care expenditures and closing three state prisons. She recommends investments in affordable housing, rural broadband expansion and computer upgrades for the Employment Department.

At a news conference, Brown described her budget as “built on sacrifice and hard choices.” She also admitted her budget represents a starting point. Gubernatorial budgets are required, but they are treated by lawmakers as suggestions and as a baseline by lobbyists.

Brown’s budget anticipates a $718 million shortfall, even though state economists indicate Oregon income tax revenues have actually risen in the shadow of the coronavirus pandemic. Revenues also will grow from voter-approved higher tobacco and vaping taxes. Lawmakers meeting next year will base their final biennial budget numbers on the economic forecast unveiled in May 2021. 

Brown’s budget also assumes the budget shortfall will be constrained by Congress approving another federal stimulus package and lawmakers enacting proposed tax changes, neither of which are assured. Additional federal funds will be needed, Brown said, to carry out COVID-19 testing and cover $350 million in unpaid rent.

Criticism was swift from the health care industry. Becky Hultberg, president and CEO of the Oregon Association of Hospitals and Health Systems, told OPB, “She has chosen to propose direct cuts to hospitals in the middle of the biggest public health crisis in a century. Cuts of this magnitude could force hospitals to reduce service to Oregonians during a pandemic.”

She has chosen to propose direct cuts to hospitals in the middle of the biggest public health crisis in a century. Cuts of this magnitude could force hospitals to reduce service to Oregonians during a pandemic.

Despite funding cuts for hospitals and Coordinated Care Organizations, Brown wants to move forward with a public option for health insurance that “could increase choice while reducing cost for Oregon consumers.” She also proposed a $10 million pilot program to expand health care coverage to include undocumented adults as well as their children.

Citing a declining need for prison beds, Brown proposed a phased closure of three of the state’s 14 prisons, starting with a facility in Salem and followed by facilities in North Bend and Lakeview. Lawmakers have already balked at the North Bend and Lakeview closures.

K-12 schools would receive $9.1 billion, a historic spending level, but probably not enough to offset increasing costs, aggravated by the pandemic. Jim Green, who heads the Oregon School Boards Association, called the budget a “starting point in focusing on equity and addressing the needs of underserved students”, but not enough to offset costs incurred because of the pandemic or “make up ground our students have lost”.

University and community colleges will push for funding increases, despite flat-funding in Brown’s budget.

The Brown budget calls for $360 million to clean up, mitigate and rebuild communities stricken by wildfires earlier this year and almost $74 million for fire preparedness measures. She recommends $146 million to modernize the Employment Department’s outdated technology, which led to delayed unemployment insurance payments for thousands of Oregonians. The agency also needs updated systems to implement the state’s new Paid Family Leave Insurance program. The budget contains $118 million for broadband expansion.

In her budget proposal, Brown signaled some policy objectives, including disconnecting Oregon’s tax system from tax breaks in the federal CARES Act, which could boost state revenues by an estimated $88 million next biennium. She assigned $20 million to close the pay gap between prosecutors and public defenders and pledged to seek bail reform. Brown said she will urge lawmakers to allow same-day voter registration and to accept mail-in ballots postmarked by election day.

Brown titled her budget, “Oregon for All: Creating a Place Where Everyone Can Thrive”. In her introduction, she said, “We must fight for an Oregon in which no one is left behind. We can create an Oregon where everyone has the opportunity to thrive and everyone’s voice is heard. The first step to creating this opportunity for all is rooted in the recognition that racism is endemic to our systems.” Her budget document contains a section dealing with racial justice, assisting immigrants and using “technology to improve equity in services”. She also called for environmental justice and equity in educational opportunity.