Gov. Tina Kotek proposes spending $765M from reserves on homeless, other crises

Gov. Tina Kotek speaks Jan. 9 during a joint session of the Oregon Legislature.

Oregon Gov. Tina Kotek released her proposed budget for the 2023-25 biennium Tuesday.

As promised, it focuses new investments on increasing housing and reducing homelessness, improving access to mental health and addiction services, and education.

“From the moment I was sworn into office, I promised to take on the biggest challenges facing families and communities across our state, and to deliver results,” she said during a news conference.

Kotek’s new investments will be partially funded by diverting $765 million that would otherwise be added to the state’s $2 billion reserve fund.

Her total proposed budget is $32.1 billion. That includes general and lottery funds, but not federal and other funds. The current biennium budget is $29.3 billion.

That includes:

$13.5 billion for education, up from the current budget of $12.6 billion.
$10.8 billion for human services, up from the current $8.65 billion.
$4.4 billion for public safety and judicial, up from the current $3.3 billion.
$1.2 billion for economic and community development, down from the current $1.4 billion
$762 million for natural resources, down from $1.1 million.
$156 million for transportation, down from $199 million.
$31 million for consumer and business services, down from $56.1 million.
$1.2 billion for other spending, up from the current $1.1 billion.

Senate President Rob Wagner, D-Lake Oswego, said the Senate would “take these recommendations seriously” and work with Kotek and Republicans “to pass a balanced budget that makes Oregon work for everyone.”

Ways and Means co-chair Elizabeth Steiner, D-Portland, joined Wagner in the statement.

“I am glad we are aligned with the governor on the priorities that must be protected as we work to craft a balanced budget that funds the programs Oregonians urgently need while consolidating where we can to make sure the state is running effectively and efficiently,” Steiner said.

Senate Republicans also issued a statement after the release of the proposed budget.

“I’m relieved to see that the governor’s proposed budget doesn’t pull money from the kicker – it’s the right thing to do,” Senate Republican Leader Tim Knopp, R-Bend, said.

Table of Contents

Housing ‘one of the largest emergencies’

Kotek made it clear during her campaign and inaugural address that solving an ongoing housing and homelessness crisis would take priority during her administration.

It is “one of the largest emergencies we have ever faced in Oregon,” Kotek said, with at least 18,000 people in the state currently experiencing homelessness.

She declared a state of emergency on her first day in office and on Thursday outlined the details of a $130 million investment package she said would help “at least” 1,200 Oregonians experiencing homelessness move off the streets within a year.

The investment package would direct millions towards rent assistance and other eviction prevention services, create 600 additional low-barrier shelter beds across the state, provide prepaid rental assistance to rehouse unsheltered households, and support the Office of Emergency Management and Oregon Housing and Community Services in their emergency response.

Kotek’s proposed budget builds on that, she said, by directing money towards reducing the number of unsheltered this year, rehousing people in the longer term, building and preserving more housing units across the state, and growing the number of homeowners.

Kotek is proposing a “significant investment” of $1 billion into affordable housing production and preservation.

That includes $770 million for the construction of affordable homes, $118 million for affordable housing preservation, $4 million to replace old manufactured homes and $2.2 million for the creation of a new Housing Production and Accountability Office to be jointly managed by the Department of Consumer and Business Services and the Department of Land Conservation and Development. The new office would focus on reducing land use and permitting barriers that prevent the development of more housing.

Other highlights include down payment assistance, rapid rehousing resources, long-term rent assistance, creation of a homelessness prevention program, and funding to maintain the operation of shelter beds in the state including the 600 new beds that the early investment proposal would add, if the legislation passes.

“The human suffering it [the housing crisis] causes the individuals, families and communities is absolutely unacceptable,” Kotek said. “We must act now to provide immediate relief to unsheltered Oregonians and prevent thousands of families from becoming homeless.”

Education proposal

Oregon’s high school graduation rate is among the lowest in the nation. Kotek is proposing large investments in education.

They include:

$100 million to increase student literacy.
$20 million for literacy-focused summer programs.
$62.5 million to increase wages for early learning professionals.
$41.3 million to enhance employment-related daycare.
$5 million to co-locate early care and education with affordable housing.
$100 million to expand the physical capacity of early learning facilities.
$100 million in bonding to build early learning facilities.
$30 million for summer enrichment programs.
$18 million to increase investment in student success plans.
$1.4 million to implement ethnic studies.
$4.8 million for rural and small school technical assistance.

Mental health and addiction

Kotek also is recommending improvements in the state’s mental health and addiction services.

Her proposed investments include:

$195.7 million to continue funding 2021 investments.
$40 million to increase residential and facility capacity.
$14.9 million in additional funding for jail diversion and enhanced civil commitment services.
$8.7 million to establish a substance abuse disorder treatment program at two state prisons.
$47.6 million for mobile crisis teams.
$60 million for behavioral health provider incentives.
More than $50 million in investments at the Oregon State Hospital.

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Kotek said her proposed new investments have not come at the expense of other priorities.

“This proposal represents a balanced budget that includes investments in every agency to tackle other pressing issues across the state,” Kotek said.

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Gov. Tina Kotek proposes spending $765M from reserves on homeless, other crises

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