Governor Tina Kotek Releases "Mission Focused" Budget Recommendations

Press Release

Today, Governor Tina Kotek unveiled her budget recommendations for the 2023-25 biennium, titled "Mission Focused" because of its focus on three top priorities: building more housing and reducing homelessness; improving access to mental health and addiction services; and improving outcomes in early literacy and K-12 schools.

"Every Oregonian, no matter their race or zip code, deserves to have the same chances," Governor Kotek said. "My mission as Oregon's Governor will always be to deliver results and move the state forward to build the Oregon we all want to live in. This vision for Oregon's future cannot be realized in one budget cycle. But this plan provides a roadmap for how we are going to reach our state's long-term goals."

Oregon is entering a challenging and complex budget environment with about $3.5 billion of one-time funding, spurred by resources from the federal government, about to expire. The recommended budget still includes a path to make targeted investments because of prudent budget management to build historic reserves in recent years.

Governor Kotek has recommended keeping the existing $2 billion of reserve funds in place, and redirect $765 million that would have been automatically added to these reserves into targeted investments aimed at better serving Oregonians in these three key areas.

Highlights of the budget recommendations include:

HOUSING AND HOMELESSNESS
To reduce unsheltered homelessness, rehouse Oregonians, build and preserve more affordable housing, and increase homeownership, Governor Kotek included the following investments:

An urgent, $130 million package to reduce unsheltered homelessness. The Governor is urging the legislature to move forward with this initial investment as quickly as possible, and released the details last week.

New affordable housing
* $770 million: General obligation bonds to build more affordable homes for both renters and new homeowners.

Moving Oregonians out of unsheltered homelessness
* $172.2 million: Rapid rehousing resources and connections to long-term rent assistance to maintain housing stability. This reflects the state's first investment in an on-going, long-term rent assistance program.

New permanent, supportive housing
* $130 million: Create new units of permanent supportive housing, and maintain the rent assistance and services needed for this housing.

Affordable housing preservation
* $118 million: Lottery and General Fund to preserve existing affordable homes, including manufactured homes.

On-going homelessness prevention
* $73 million: Create an on-going homelessness prevention program in Oregon.

Maintain shelter operations
* $24.1 million: Maintain shelter operations in the state, including the operation of the 600 new shelter beds created through the early investment package and Project Turnkey projects.

Housing Production and Accountability Office (HPAO)
* $2.2 million: Create a new state office to reduce land use and permitting barriers that stand in the way of building more housing.

MENTAL HEALTH AND ADDITION SERVICES
To disrupt the harmful and expensive homelessness-jail-hospital pipeline, decrease preventable deaths from substance use and behavioral health needs, and stabilize the behavioral health workforce, Governor Kotek included the following recommendations:

Continue investments in substance use treatment and services
* $278.9 million: Addiction treatment, overdose prevention, peer support services, housing assistance, and employment services -- funded by Measure 110 grants and a 1115 waiver allowing for Medicaid coverage of substance use disorders (SUD) facility-based treatment and peer services.

Continue funding new 2021 investments
* $195.7 million: Continued funding for aid and assist services, Certified Community Behavioral Health Centers (CCBHCs), Peer Respite Centers, co-occurring disorder treatment, System of Care Advisory Council, Interdisciplinary Assessment Teams for children and housing for transition-age youth.

Community mental health
* $127.4 million: Continue 30% Medicaid rate increases for increased behavioral health worker wages.

Continue behavioral health provider incentives
* $60 million: Loan repayment, scholarships and tuition stipends for licensed behavioral health providers and students in the workforce pipeline.

Oregon State Hospital
* $50.2 million: Increase positions at the state hospital to support a sustainable 24/7 staffing model; establish a dedicated Health Equity Unit at the state hospital to address the needs of staff; support the OSH Complex Case Management Unit to meet the needs of patients with complex needs and ensure the safety of staff and patients; and upgrade OSH facilities to improve patient recovery and safety of both patients and staff.

Mobile crisis teams
* $47.6 million: Ongoing funding for programs like CAHOOTS to divert individuals from hospital and jail, including response and stabilization services for youth and their families.

Increase residential and facility capacity
* $40 million: Ongoing funding to support operation of additional mental health residential capacity funded in 2021 and to continue the state's investment in the development of additional residential and facility capacity.

Harm reduction clearinghouse
* $40 million: Continue support of the harm reduction clearinghouse to reduce preventable deaths associated with opioid use.

Health Care Provider Incentive Program
* $20 million: Nearly double OHA's Health Care Provider Incentive Program, with a priority to increase Oregon's behavioral health workforce and to continue to recruit and retain diverse health care providers.

Crisis prevention system
* $18.4 million: Fund 988 call centers, the nationwide service connecting people with the 988 Suicide and Crisis Lifeline.

EARLY LEARNING AND K-12 EDUCATION
To improve student literacy, stabilize early childhood services and ensure Oregon children are better served by K-12 schools, Governor Kotek included the following recommendations:

Increase the State School Fund
* $9.9 billion: The Governor is recommending increasing the State School Fund to $9.9 billion and fully funding High School Success (formerly Measure 98) to help improve graduation rates and give students the tools to be career and college ready.

Ensure all kids are learning to read, and reading to learn
* $100 million: Evidence-based, targeted literacy strategies to ensure preschool and elementary school educators have the training, time, materials, and ongoing coaching they need to integrate evidence-based literacy strategies with culturally responsive approaches.

Expanding physical capacity of early learning facilities
* $100 million: Create and upgrade the physical space early learning providers need, along with technical assistance to navigate the expansion and renovation processes.

Early Learning Program Enhancement
* $62.5 million: Provide a living wage to early learning professionals to stabilize and value the workforce by enhancing rates for Oregon Pre-Kindergarten (OPK), Preschool Promise, Healthy Families Oregon, Relief Nurseries, and the Early Childhood Equity Fund.

Employment-Related Day Care (ERDC) Enhancements
* $41.3 million: Increase rates for ERDC providers, provide funding for a limited caseload expansion for ERDC, support the transfer of ERDC from Oregon Department of Human Services, provide funding to make IT system changes to expand program eligibility, and support child care supply building and ERDC access.

Enrichment programming for all grades
* $30 million: Continue to offer students opportunities to connect with each other to support their well-being following years of pandemic-impacted learning. Funding will be provided by Tribes and community-based organizations.

Literacy-focused summer programming provided by districts
* $20 million: Evidence-based strategies and integrated with culturally responsive approaches for preschool and elementary (P-5) students. Requires districts to provide a 50% local match.

Expand and enhance existing targeted strategies
* $18 million: Increase investments in Student Success Plans (e.g. American Indian/Alaska Native State Plan, African American/Black Student Success Plan, LGBTQ2SIA+ Student Success Plan) and add funding for additional plans for Native Hawaiians/Pacific Islanders and Refugees and Immigrant student populations.

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