The Oregon Legislature awaits its second special session in response to the COVID-19 pandemic and associated economic downturn.
Revealed at the May revenue forecast, State economists at the Office of Economic Management (OEM) projected a revenue shortfall of $2.7 billion less than what was projected as the budgets were written. There is about $1.75 billion in reserve funds, meaning if all the reserves were tapped, an additional $1 billion would need to be cut to balance the books at the end of the biennium, a constitutional requirement prompting legislative action.
In mid-July, the ways and means committee chairs released their principles to rebalance the budget to guide rebalance efforts, reflecting close to $400 million in budget cuts, in addition to tapping $400 million from State reserves, the school fund, vacancies, and administrative savings.
Among the proposed cuts, human services faces the largest reduction at just over $180 million, followed by education at roughly $75 million, and public safety at roughly $50 million.
Ways and means sub committees convened last week to discuss targeted budget cuts to tee up the conversation for a future special session. Dates are not set, however, the special session is likely to occur early to mid-August.
Proposed budget cuts by committee are linked below:
- Natural Resources
- General Government
- Human Services
- Public Safety
- Transportation and Economic Development
In May, OEM further predicted that revenue will continue to fall below projections for the 2021-2023 budget period, and begin to rebound in 2023-2025 spending cycles, but will still be below pre-COVID-19 forecasts.The analysts stressed the uncertainty around the predictions with unknown factors such as development of a vaccine, a large number of businesses closing permanently, or an upswing in COVID-19 infection rates. Revenue forecasts will be updated regularly and may require further action.
For questions on special session or budgets, please contact AOC Legal Counsel and Legislative Director, Rob Bovett.
Contributed by: Megan Chuinard | Public Affairs Associate