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She delivers her final spending plan to lawmakers, who have until mid-2021 to finish.

Gov. Kate Brown proposes to do a lot in her final two-year budget, which relies on modest growth in tax collections and lottery proceeds as Oregon emerges from the coronavirus pandemic and ensuing economic nosedive.

Her budget, which she unveiled Tuesday, Dec. 1, proposes to spend $25.6 billion from the tax-supported general fund and lottery proceeds — the state's most flexible sources of income. That's up from the $23.6 billion she proposed two years ago for the current budget. The Legislature raised it to $23.7 billion.

Actual spending from the current budget is estimated at $23.4 billion, after an Aug. 10 special session of the Legislature cut about $300 million in the aftermath of sharply lower revenue projections May 20. Those projections were revised upward on Sept. 23. State economists said in their latest forecast on Nov. 18 — the same forecast on which Brown's budget is based — that the newer projections were holding up.

More than 90% of the general fund comes from personal and corporate income taxes. The corporate activity tax, enacted in 2019, is earmarked separately for support of public schools and income tax relief.

Most of the general-fund and lottery budget supports education, human services and public safety.

Brown, who cannot run again in 2022, said an economic recovery is underway but that Oregon will not fully emerge from it until the end of the budget cycle in mid-2023. She said the recovery will hinge on federal aid and new treatments and vaccines to end the pandemic.

Brown said a second round of federal pandemic aid is needed as a follow-up to the $2.2 trillion CARES Act that Congress approved in March. A new aid plan has been stalled for months by political disputes in Congress.

"A federal stimulus plan is critical to addressing the dire needs Oregon and other states face due to the COVID-19 pandemic and wildfire recovery," she said.

Brown delivered her proposed budget to the Legislature, which opens its 2021 session on Jan. 11. Lawmakers have until July 1, the start of the new two-year budget cycle, to complete work on agency budgets. Two more economic and revenue forecasts are scheduled before then.

Brown said in the past year, Oregonians have endured not only the coronavirus pandemic and its economic aftershocks — the state still has 140,000 fewer jobs than in March, when the pandemic began — but also renewed calls for racial justice and the impact of the Labor Day wildfires.

"I have been awe-inspired by Oregonians who have stepped up at every turn to protect their friends, families and neighbors. The compassionate spirit of our state has shined through. Oregon has proven to be a port in the storm," Brown said in her budget message.

"Through it all, we are determined to rise, and rebuild. And as we do, we must ensure the future is a just one; that we create an Oregon where everyone has the opportunity to thrive. Where every voice is heard."

Spending from all funds in the 2021-23 budget cycle is projected to break the $100 billion mark, up from $96.9 billion. These include federal funds, which are usually special-purpose grants, and other funds restricted by the Oregon Constitution or state laws.

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A link to Gov. Brown's budget summary.

Excerpts from the governor's proposed budget

Ensuring all Oregonians' basic needs are met

After a year in which Oregon families have had their daily lives upended, this budget prioritizes making sure Oregonians have their most basic needs met: a warm, safe, dry, affordable and accessible place to call home, access to health care, child care for working parents, K-12 schools, and COVID-19 relief resources.

Housing and Homelessness

The governor's budget invests in housing and homelessness at $65.9 million over the 2019-21 investment levels, and calls on Congress for $350 million in rent assistance. The budget also includes $20 million in homeowner assistance, and $250 million in affordable housing development funds.

COVID-19 pandemic response

In addition to applying federal funds towards pandemic response, the budget invests $30 million in public health modernization to better prepare Oregon's public health system to respond to events like the current pandemic. Other pandemic-related investments are included throughout the budget.

Long-term care

The budget includes $17.9 million in investments in a range of strategies to protect seniors living in assisted living and nursing homes from COVID-19.

Health care

The budget addresses the challenge of adequately, sustainably and equitably funding our health care system during a once-in-a-100-year public health emergency. Largely due to the pandemic, Oregon faces a $718 million budget gap for the Oregon Health Plan — coverage which provides an essential bridge to reducing health disparities by improving access to care and protecting low-income families from financial ruin. In addition, Coronavirus Relief Funds that have been used to fund COVID-19 response efforts will expire on Dec. 31. The governor's budget helps close that gap through cost savings and an expected extension of enhanced Federal Medical Assistance Percentage (FMAP) funding.

Behavioral health

The budget also makes investments in behavioral health and substance use disorder resources, informed by the recommendations from the Alcohol and Drug Policy Commission (ADPC) Strategic Plan, the Tribal Behavioral Health Strategic Plan, the Governor's Behavioral Health Advisory Council, and the Racial Justice Council.

Equity in education and our environment

Building a stronger Oregon requires dismantling the structures of racism in our government systems and programs, Gov. Brown's office wrote, and creating an inclusive state that works for everyone.

K-12 education

"After a year in which historic disparities in education have been exacerbated by a pandemic and wildfires, the governor's budget keeps Oregon's commitments made to Black, Indigenous, Latino, Latina, and Latinx, Asian, Pacific Islander, Tribal and students of color by fully funding Student Success Act programs and initiatives, as well as grants to schools under the High School Graduation and College and Career Readiness Fund, and funding the State School Fund at $9.1 billion," Brown's office wrote. The budget stabilizes education funding by drawing $215 million from the Education Stability Fund for public schools.

Broadband expansion

The budget invests $118 million in broadband expansion statewide to connect an additional 50 urban and rural communities that currently lack access. "During a pandemic that has necessitated both distance learning for students and remote work for workers, equitable broadband access is critical for educational outcomes and economic opportunity," her office wrote.

Early learning and child care

The budget expands high-quality early care and education programs for 8,000 children through Oregon Pre-K, Early Head Start, Preschool Promise and the Early Childhood Equity Fund.

Environmental Justice

The budget invests in the creation of an Office of Environmental Justice, a greenhouse gas reduction programs, and equitable water access, and wildfire preparedness, response, and prevention, to address the disproportionate impact of climate change, wildfires, water quality and access, on Black, Indigenous, Latino, Latina, and Latinx, Asian, Pacific Islander, Native American, and Tribal community members.

COVID-19 and wildfire relief and recovery

"Communities impacted by wildfire likewise need support to recover from the devastation of the 2020 fire season," her office wrote.

Worker relief and workplace protection

A key priority of the budget and policy agenda is to secure additional coronavirus relief funds from Congress. Current federal relief funds are set to expire on Dec. 31. The budget also seeks to maintain funding for the Oregon Worker Relief Fund, Oregon Worker Quarantine Fund, and the COVID-19 temporary paid leave program, to continue to support Oregon workers during this pandemic, regardless of immigration status. The budget maintains funding for the Oregon Employment Department and Oregon OSHA, plus $146.4 million to fully modernize the Employment Department's benefit delivery system and to implement Paid Family Leave Insurance benefits.

Wildfire recovery and preparedness

The budget dedicates $189.5 million to rebuild communities impacted by the fires. The Governor's Wildfire Economic Recovery Council will have access to an additional $170 million of community development resources. Funds will support debris cleanup, tree removal, sheltering and housing, food assistance and community infrastructure, including $30 million in investments in the Oregon Department of Forestry, and setting aside $40 million to address recommendations from the Governor's Council on Wildfire Response. It provides an additional $47 million in grants and loans for wildfire recovery. In addition, the budget invests $73.7 million in fire preparedness, response, and prevention resources.

Reforming the criminal justice system

"While Oregon has taken strides to reform the criminal justice system in the past decade, the events of 2020 –– such as disruptions and delays caused by the COVID-19 pandemic, as well as community calls for racial justice –– have magnified the urgency of the need for reform," her office wrote. "Widespread racial disparities exist throughout Oregon's criminal justice system. Black people represent 2.2% of Oregon's population but 9.3% of the state's prison population." The budget priorities include expanding police accountability measures, reforming courts and stabilizing the Department of Corrections budget going.


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