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Amid plummeting state revenue caused by the state shutdown, Gov. Kate Brown called for an 8.5% cut from state's two-year budget.

COURTESY PHOTO: THE LUND REPORT - Oregon's Health Authority in Salem could freeze budgets affecting Medicare and behavioral health services to deal with budget cuts.The Oregon Health Authority may freeze new behavioral health programs, remove nearly one-quarter of the beds from Oregon State Hospital and pare back Medicaid services, even as the state reels from the pandemic with thousands of laid-off Oregonians applying for free health coverage under the Oregon Health Plan.

The authority leaves nothing unscathed in its proposal to reduce its spending for the rest of the two-year budget cycle, which ends June 30, 2021. The proposal follows an order by Gov. Kate Brown to all state agencies to recommend budget cuts. The authority suggested trimming $226 million in state general fund dollars. But its total budget cuts would surpass $370 million when factoring in federal matching funds, mostly from the Oregon Health Plan, the state's version of Medicaid.

Amid plummeting state revenues caused by the state shutdown, Brown called for an 8.5% cut from the two-year budget. In practical terms, that is a 17% reduction because Oregon is already nearly half-way through the budget cycle.

The proposals are just a starting point. Brown will get a state revenue forecast on May 20, and the outlook is bleak. Oregon faces a possible $3 billion loss in revenues, Brown said in a statement on Monday.

"We haven't made any final decisions, and the agency plans serve as important information gathering at this point," Brown said. "We know a potential cut of this magnitude would be extremely drastic."

Oregon reflects a nationwide trend. States face a decline in revenues after residents sheltered in place, businesses closed down and sports stadiums sat empty.

More federal aid could change the outlook. But that is not guaranteed. Brown signed a letter Monday as part of a Western states pact with California, Washington, Nevada and Colorado. The pact is asking for $1 trillion to offset losses to state and local government agencies to help with public health care, public safety and education. Oregon's share is unclear.

This Lund Report story is shared as part of a local media project to increase COVID-19 news coverage.

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