Thursday, Feb. 26 was the 2026 legislative session second chamber deadline. Bills that were not voted out of their second chamber policy committee on Thursday and referred to the chamber floor, Joint Committee on Ways and Means, or committees on Rules or Revenue will not move forward this session. Policy committees have largely closed for the session and focus has shifted to several big-ticket bills in the Rules and Revenue committees and finalizing the state budget. The session must adjourn sine die by Sunday, March 8.
A deficit in the state general fund caused by H.R. 1, the federal budget bill passed in late 2025, required the Legislature to rebalance the state budget during the 2026 short session. The Association of Oregon Counties (AOC) lobbied legislative budget writers in a series of meetings and written feedback urging the preservation of core services by seeking savings through the least disruptive measures and avoiding cuts that reduce funding for mandated state-county shared services or shift cost burdens to county governments.
Rebalance proposals were made public over the weekend in several budget bills – on initial review, it appears that county budgets avoided direct cuts or cost shifts. The rebalance will be achieved largely through vacancy savings and cuts to services and supplies. Our advocacy was successful this session, but AOC and counties should be prepared for several biennia of challenging budget conversations as the overall state general fund revenue paradigm continues to shift.
Senate Concurrent Resolution 204, honoring the role of counties and AOC’s 120th anniversary, passed both chambers unanimously and now awaits the governor’s signature. SCR 204 was introduced at the request of AOC by Senate President Rob Wagner and was sponsored by House Speaker Julie Fahey, and 27 bipartisan and bicameral legislators. Unanimous support for SCR 204 is a testament to the Legislature’s appreciation of AOC’s vital role and the essential services provided by counties.
AOC is tracking around 130 of the 300 total bills introduced this session for their potential impact to county budgets, services, or governance. Our team has analyzed and submitted fiscal impact statements for about 140 bills and amendments, at the request of the Legislative Fiscal Office, on behalf of counties. As always, AOC Legislative Affairs staff continue to diligently track and defend against unfunded mandates and policy proposals with a negative impact to county governments.
Please mark your calendars to attend the March 6 and 9 AOC steering committee and legislative committee meetings – these AOC day meetings will include comprehensive debriefs of AOC’s priorities and newly passed legislation impacting county budgets, services, or governance. In the meantime, please do not hesitate to reach out to your AOC Legislative Affairs team.
Below are high level updates from AOC steering committee policy portfolios.
Governance and Revenue
AOC’s primary governance and revenue goals this session are to continue making progress on County Assessment Function Funding Assistance (CAFFA)-related objectives, including securing a statewide study from the Legislative Revenue Office and protecting against Department of Revenue agency reductions that harm local government revenues. Staff have received commitments from the House and Senate Revenue chairs to get a CAFFA study produced, and members of the Joint Committee on Ways and Means legislators have been informed about the importance of keeping DOR programs that help maintain the property tax asset.
House Bill 4148, local transient lodging tax reform, is AOC’s top policy priority this session. The bill had a very successful public hearing with many county officials testifying in person and passed the House floor with 40 “yes” votes. HB 4148 awaits a work session in the Senate Committee on Finance and Revenue.
Health and Human Services
AOC’s health and human services objectives this short session are to preserve all funding for public health, developmental disabilities and behavioral health services, prevent and reduce administrative burden and liability, and maintain the local public health and local mental health authority of county governments. These objectives are well aligned with legislative leadership’s priorities to maintain or grow core community services to resolve federal court sanctions related to the Mink-Bowman lawsuit and long wait times for forensic admissions to the Oregon State Hospital. AOC is working with bill sponsors and partners to meet these policy objectives and significant progress is being made.
It appears at this time that local public health, behavioral health, and intellectual and developmental disabilities program budgets, as well as homelessness prevention and response are being held harmless. A $15.5 million reduction in Behavioral Health Resource Network funding in Senate Bill 5703-1 is simply a reconciliation of the state budget with the recent reduction in the marijuana tax revenue forecast and not a new cut.
Natural Resources
Efforts in this portfolio are focused on ensuring that natural resources state agency budget reductions do not impact county programs and budgets. Initial budget reduction proposals included potential impacts of $40 million to county programs including wildlife services, place-based water planning, invasive species, and wildfire protection. AOC’s direct advocacy for the preservation of natural resource-related programs and budgets was successful – programs and funding on which counties rely were protected and even increased. Several notable increases include direct allocation for the Land Owner Offset in the Department of Forestry Budget ($11.6 million), additional funding for the Wolf Depredation Grant Program ($1 million) and funding for the Japanese Beetle Eradication Program ($1.8 million).
Public Safety
AOC has focused on budgetary issues and protecting public safety programs from cuts – and with the release of today’s budget bills, county public safety has been held harmless. AOC has also been heavily involved in negotiations around the federal accountability agenda from the majority party. Staff worked with legislators and partners to mitigate risks and costs to counties from concepts related to employment law, law enforcement masking, county liability, and task force participation.
Transportation
AOC’s primary objective in the transportation policy portfolio this session is to ensure that the measures necessary to fill the nearly $300 million operations and maintenance budget gap at the Oregon Department of Transportation (ODOT) do not negatively impact county road department budgets. The ODOT rebalance proposal transfers unobligated State Highway Fund dollars toward agency operations and maintenance including dollars in the Connect Oregon and Safe Routes to Schools programs, redirects some federal funding, and leaves around 100 jobs vacant.
ODOT’s budget rebalance has no impact on the 50/30/20 funding formula, Local Bridge Program, or the Fund Exchange Program. AOC also thwarted earlier attempts to address ODOT’s budget gap with measures that sweep and undermine the State Highway Fund distribution.
Contributed by: Mallorie Roberts | Legislative Affairs Director