Jan 30, 2026 | AOC Advocacy, Governance, Revenue, & Economic Development
During the 2025 legislative session, Oregon local governments came closer than they have in more than two decades to modernizing how the local transient lodging tax (TLT) works. A reform bill (House Bill 3962 A), supported by a broad coalition of local government and public safety stakeholders, cleared a critical policy committee vote, advanced out of the House, but then stalled in the Senate without a floor vote due to session running out of time.
Although the outcome was disappointing, the near miss has only galvanized counties and cities to get the bill across the finish line in the 2026 short session. An effort to reform the local TLT has the potential to be one of the most consequential legislative efforts of the session for local governments in the 2026 legislative session. Passage of this legislation will mark a victory for local control, public safety investment, infrastructure resilience, and fairness for residents that remain after tourists leave their communities.
Two versions of the local TLT reform bill will be introduced: Senate Bill 1562 sponsored by Senators Weber and Neron Misslin and House Bill 4148 sponsored by Representatives Walters and Javadi. These bills are identical in language and exist primarily to offer local governments two paths to attempt to pass the bill in 2026.
2003 Rules Governing 2026 Realities
Current law ties the hands of local governments by locking in revenue ratios from post-2003 local TLT increases to a 70/30 split, with 70% of revenues statutorily required to be spent on very specific infrastructure and services that support tourism, and 30% of revenues directed toward general fund discretionary spending. While this ratio worked for the 2000s and early 2010s, these ratios no longer reflect how tourism impacts communities and local governments.
For many counties, peak tourism seasons mean populations that double, triple, or even quadruple overnight. That surge places real and measurable strain on sheriff patrols, jail capacity, search and rescue operations, EMS response times, roads and bridges, sanitation systems, and outdoor recreation infrastructure. Those costs do not disappear when visitors leave; they are borne year-round by the residents and local governments who maintain these systems.
The reintroduced bills in 2026 would not eliminate tourism promotion funding. Instead, it would allow local governments to adjust post-2003 TLT distributions so that up to 60% may be designated as general fund dollars to be used for critical local services and infrastructure, while maintaining a dedicated 40% for tourism promotion and facilities.
Why This Matters to Every County — Not Just “Tourism Counties”
It is tempting to assume that this debate primarily affects coastal or other destination communities. However, that assumption is outdated.
Tourism patterns have shifted dramatically. Short-term rentals are increasingly located outside traditional tourism cores, spreading wear and tear across county road systems, rural water districts, and unincorporated areas. At the same time, counties face mounting infrastructure backlogs, like transportation and water infrastructure needs, without meaningful growth in flexible revenue options.
Importantly, the local TLT is one of the only tools counties have to capture visitor-generated costs without shifting the burden onto permanent residents through new property taxes, levies, or bonds. Gas taxes are declining in real value, are distributed on a per-capita basis rather than road usage, and do not reflect tourism impacts. Income taxes flow to state priorities that may not align with local needs. In short, counties are being asked to absorb visitor impacts with tools designed for a very different era.
2026 Will Be a Turning Point for Local TLT Reform
The 2025 session demonstrated that this reform is viable. It moved. It gained traction. And it came within a single chamber of becoming law. What will make the difference in getting the bill passed in 2026 is that local governments are better prepared, have had more time to meet with legislators, and intend to move quickly on the bill to avoid it being left on the table at the eleventh hour of session.
If you are interested in supporting this effort in 2026, please contact Justin Low to coordinate the following opportunities:
- Providing public or written testimony in support of the bill
- Traveling to Salem to meet directly with legislators
- Drafting an op-ed for publication in your local newspaper to elevate the county perspective
County voices were essential to getting local TLT reform as far as it went in 2025, and they will be decisive in getting it across the finish line in 2026.
Contributed by Justin Low | Legislative Affairs Manager
Jan 29, 2026 | AOC News
The Association of Oregon Counties (AOC) is excited to announce the launch of its 120th Anniversary Campaign, “Over a Century of Commitment.” This significant milestone aims to celebrate the invaluable role of Oregon counties and showcase the impactful work AOC has accomplished over the past 120 years.
“This anniversary is a chance to honor our past while highlighting the essential contributions Oregon’s counties make to the state,” said Executive Director Gina Nikkel.
The year-long celebration will feature several key highlights:
Fresh Look: Our new logo was unveiled in January. It was redesigned to recognize our 1906 founding and signify our role as a statewide association advocating for all counties.
AOC Store: You can now order AOC swag and show your county spirit! The AOC store is live and features raincoats, fleece jackets, lapel pins, and more. Stay tuned for more items to be available for purchase throughout the year.
Historical Publication: A comprehensive print and digital publication is being created to document AOC’s significant milestones, achievements, and key historical moments.
County Spotlight Series: Throughout the year, we are featuring historical tidbits and unique qualities of all of Oregon’s counties on social media channels and in the Oregon Trails Newsletter. Help us spread the word by liking and sharing our posts!
Annual Conference: The 2026 Annual Conference will be the centerpiece of the celebration, featuring special decor, catering, and educational sessions. Attendees can look forward to special guests, an enhanced reception, and a dedicated merchandise table.
Contributed by: Erin Good | Communications Coordinator
Jan 29, 2026 | AOC Advocacy, Health & Human Services
Updates on Coordinated Care Organization (CCO) cuts to Community Mental Health Programs funding, impacts of Mink-Bowman lawsuit on local services, Rural Health Transformation grants, state-county partnership on HR 1 implementation, and the Statewide Shelter Program.
In case you missed it: Jan. 23 Local Government Advisory Committee (LGAC) on Health and Human Services (Meeting recording; Chat transcript)
CCO cuts to Community Mental Health Programs funding
Despite CCO’s ORS 414.153 obligation to maintain the mental health safety net system provided through local mental health authorities in order to meet the needs of their Oregon Health Plan (OHP) members, CCOs across the state are making significant cuts to their 2026 contracts with Oregon’s Community Mental Health Programs (CMHP). The mental health safety net, which includes court-ordered services necessary for the Oregon Health Authority (OHA) to effectively manage the Oregon State Hospital census, requires adequate OHP reimbursement for program viability.
The Association of Oregon Community Mental Health Programs described addressing this threat to Oregon’s safety net as a top priority, along with mitigating the expected loss of federal funding from HR1 and a longer term effort to close the funding gap identified in the latest cost study of required CMHP services. Many CMHPs also rely on Behavioral Health Resource Network grants which just received 14% reductions due to falling cannabis tax revenue projections.
CMHPs have been in discussion with OHA on potential solutions, including joint advocacy to the Legislature for sustainable funding for crisis stabilization centers;
prioritizing approval of CMHPs as new Certified Community Behavioral Health Clinics (CCBHCs); ensuring adequacy of CCO contract exhibit M (adequate networks/funding); and establishing a base rate for CCO reimbursement for priority populations and services set by OHA in the County Financial Assistance Agreement, such as Assertive Community Treatment, Early Assessment and Supports (EASA), Supported Employment, and WRAP.
During discussion at the Jan. 23 meeting, committee members noted that the CCO contract cuts have already resulted in loss of service to hundreds of community members, including medication management. Also on the chopping block are intensive youth services, medication assisted treatment for substance abuse, and supported employment, among others.
This issue will be a standing item on the committee agenda each month until it is adequately addressed, including the next meeting on Feb. 27.
Impacts of Mink-Bowman lawsuit on local services
Court Monitor Dr. Debra Pinals provided an update on her work with the state to address the wait times for persons in county jails to be admitted to the Oregon State Hospital (OSH) for competency restoration. Her latest update, Neutral Expert 10th Quarterly Report Regarding the Consolidated Mink and Bowman Cases, published in December, showed an average wait time of 21 days driven by an increase in court-ordered placements; the federal court-mandated maximum is seven days.
The state is accruing fines now in excess of $2 million on a per person per day basis for noncompliance with the court order. The court is making exceptions to the fine for cases where there is a delay in court orders or in transportation by county sheriffs. Those courts and sheriffs are being notified by OSH in those cases. Dr. Pinals is overseeing a workgroup which will decide how to disburse funding from the fines.
A community restoration program manual overseen by Dr. Pinals is now in draft form. She is also focusing on improvements to transitions out of OSH.
Public Consulting Group (PCG) has been contracted to provide an independent evaluation and is currently conducting a ‘deep dive’ into state budgetary allocations and expenditures for behavioral health services in order to identify what resources are needed and where to bring the state into compliance. Report recommendations are expected to come this spring.
Committee discussion noted the need for ongoing collaboration between Dr. Pinals and state and county partners on these efforts.
Rural health
OHA Policy Director Steph Jarem gave an update on Oregon’s Rural Health Transformation plan development. Oregon was awarded $197.3 million for Year 1 with an expected total over the next five years of about $1 billion. The definition of ‘rural’ is the same as used by Oregon’s Office of Rural Health. A contractor will support OHA in conducting regional conversations for the first of five initiatives within the program which focuses on regional partnerships and system transformation. OHA is still in final negotiation with the federal agency and expects to release its RFP in the spring with local award funding probably released in the summer. Director Jarem’s slides provide helpful details on federal eligibility requirements, allowable and not allowable use of funds, and Oregon’s five initiatives. Awards will prioritize ready-to-go projects and projects that are collaborative among local/regional partners.
State-county partnership on HR 1 implementation and the Statewide Shelter Program
County Health and Human Services directors brought forward a request for guidance from OHA on specific codes to use to demonstrate an individual’s exemption from new Medicaid eligibility requirements, e.g., definition of medical fragility, and noted the need for robust provider education ahead of the July 1 implementation of those new requirements. OHP Community Engagement Director Jessica Deas provided an HR1 Impacts and Strategies update. The committee will revisit this topic for new developments in February.
Oregon Housing and Community Services Department Director of Housing Stabilization Liz Weber provided an update on the implementation of the Statewide Shelter Program. Applications for new regional coordinators are now under review and will be announced “soon.” The new rules and program manual will not go into effect until those new regional coordinators are in place. Committee members recommended that new regional coordinators be required to have an active MOU with counties to ensure effective coordination.
Also presented was the state’s process and rationale for allocating the $65 million dollars directed by the 2025 Legislature to increase behavioral health residential treatment capacity and short overviews of OHA and ODHS rebalance proposals currently before the Legislature.
Contributed by: Jessica Pratt | Legislative Affairs Manager
Jan 28, 2026 | AOC News
As many county commissioners, chairs, and judges are acutely aware, counties have experienced a decades-long trend of increasing budget challenges and more frequent budget shortfalls at the county level. Today, 60% of Oregon counties have a deficit in their general fund and face difficulties providing all mandated services to their communities.
As a solutions-oriented organization representing Oregon counties, the Association of Oregon Counties (AOC) is ready to serve as a catalyst for confronting county revenue challenges. Recognizing the urgency of this challenge, AOC President and Tillamook County Commissioner Erin Skaar will focus her 2026 Presidential Initiative on ways that counties can generate revenue outside of advocacy with state and federal government and under their own authority.
“An alarming number of counties are facing significant, structural challenges in delivering the services our communities count on to be safe and to thrive,” Skaar said. “My presidential initiative this year will highlight this growing revenue crisis and build a foundation on which the AOC membership can unite, learn from each other, and lead toward solutions.”
Throughout the year, AOC will create opportunities for information sharing on topics related to revenue generation and optimization, cost cutting, and other best practices. Through a series of webinars, AOC members will have the opportunity to learn from their peers and from thought leaders at the national level.
Oregon county commissioners, chairs, judges, and other county leaders who have tested new approaches to generating revenue and managing expenses will be invited to share their experiences in these webinars.
Stay tuned for webinar details and how members can be involved in developing budget solutions within their counties.
Contributed by: Jill Rees | Member Services Director
Jan 28, 2026 | AOC Advocacy, AOC News
The Oregon State Legislature’s 35-day short session begins on Feb. 2 and must end no later than March 8. Legislators’ primary objectives during the 5-week sprint will be mitigating historic budget gaps in both the state general fund and at the Oregon Department of Transportation. The Association of Oregon Counties (AOC) Legislative Affairs team is working closely with legislators and our colleagues in Salem to protect county budgets and services during this process. AOC expects to make incremental progress on our 2025-26 legislative priorities, setting the stage for a productive interim.
AOC steering committees and the Legislative Committee will meet on Feb. 6 and 9 to review and take positions on bills impacting county services, budgets, and governance. AOC staff, alongside our steering committee co-chairs and the AOC Executive Committee, strive to ensure the association’s resources and political capital are leveraged strategically and effectively. Our processes and advocacy are strongest when commissioners, judges, and chairs from all member counties engage.
Committee meeting information is posted on the AOC website on the calendar and on each committee page accessed by the Advocacy drop-down menu.
The AOC Legislative Affairs Department looks forward to a successful and productive month advocating in the State Capitol for counties and the services they provide.
Contributed by Mallorie Roberts | Legislative Affairs Director
