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Gov. Kotek's $32B proposed budget focuses on housing and homelessness

Governor Tina Kotek is proposing to spend about $32 billion over the next two years. More than $300 million would go toward housing and homelessness.

SALEM, Ore. — On the second floor of the state library, Governor Tina Kotek announced her proposed budget and top three priorities for the next two years during a Tuesday morning press conference. Under her proposal, hundreds of millions of dollars would go toward Oregon's homeless and housing crisis.

Gov. Kotek defined her top three budget priorities as housing and homelessness, mental health and addiction care, and education.

“Oregonians are looking for action, real action that makes a difference in their everyday lives,” Kotek said.

That difference, she said, would be the focus in her first proposed budget as Oregon’s new Governor.

“My mission as Oregon’s Governor will always be to deliver results and move the state forward to build an Oregon we all want to live in,” she said.

Housing and homelessness

On what she called an expedited timeline, Kotek proposed to spend about $32.1 billion over the next two years. About $130 million would immediately be earmarked to combat homelessness as part of her homelessness state of emergency declaration, which includes parts of the state where homelessness has increased by 50% or more since 2017.

Governor Kotek has urged the legislature to quickly invest that $130 million, a proposal her office has previously outlined, to begin reducing unsheltered homelessness this calendar year.

Here’s how that investment package would break down:

  • $23.8 million to expanding shelters and growing the workforce
  • $54.4 million to get 1,200 people off the streets, including offering rental assistance
  • $33.6 million to prevent evictions.
  • A total $13.8 million to support homeless people within Oregon tribes, expand sanitation services and support emergency response

KGW reporter Blair Best asked Kotek how she plans to help the areas of the state that are dealing with a homeless crisis but not included in the state of emergency.

“So, as you know we’ve been talking about $130 million —  $40 million out of the current biennium, $90 in the next biennium — to meet very specific goals around unsheltered homelessness in those priority areas. However, the rest of the budget also expands emergency assistance for the whole state,” Kotek explained.   

That statewide emergency assistance includes:

  • $172.2 million toward long-term rent assistance programs
  • $73 million to create an ongoing homelessness prevention program
  • $24.1 million to maintain shelter operations, including the operation of 600 new shelter beds
  • $4.5 million for affordable insurance
  • $5.3 million for ongoing coordinated emergency response
  • $130 million to create new permanent supportive housing units

Governor Kotek noted the importance of expanding the state’s affordable housing production with a target of building 36,000 homes per year. That would be an 80% increase over recent construction trends. 

“This vision for Oregon’s future cannot be realized in one budget cycle, but this plan today provides a road map for how we’re going to reach this state’s long-term goals,” Kotek said.

Mental health and addiction

Governor Kotek also plans to invest in the state’s mental health and addiction crisis by increasing workforce wages.

“My budget proposes doubling the Oregon Health Authority’s healthcare provider incentive program, which would bring up to 1,000 new workers from diverse backgrounds into this pipeline,” Kotek said.

The budget proposes the following avenues for funding:

  • $195.7 million to continue funding 2021 investments
  • $40 million to increase residential and facility capacity
  • $14.9 million for jail diversion and enhanced civil commitment services
  • $12.3 million to close gaps in behavioral health services for children and older adults
  • $8.7 million to expand treatment for substance use in prison

Education and childcare

That same attention would go toward education and expanding access to affordable childcare.

“These investments can only make the desired impact for our children and students with focused leadership and increased accountability,” said Kotek.

Funding would be allocated for the following under Kotek's budget:

  • $100 million for evidence-based, targeted literacy strategies
  • $20 million for literacy-focused summer programming provided by districts
  • $62.5 million for early learning program enhancement
  • $41.3 million toward employment-related day care enhancements
  • $5 million for co-location of early childhood education and affordable housing
  • $100 million for expanding physical capacity of early learning facilities (preschool and child care)

The response

Democratic leaders in the Oregon Senate responded to her budget proposals by saying that they will work with the governor, while pointing out how there will be challenges since about $3.5 billion of one-time funding from the federal government is about to expire.

“I truly appreciate the Governor using her recommended budget to directly address our most urgent needs, especially fixing the housing and homelessness crisis, keeping Oregon communities safe, and stabilizing our economy," said Senate President Robe Wagner (D-Lake Oswego. "We take these recommendations seriously, and we will work with the Governor and our Republican colleagues to pass a balanced budget that makes Oregon work for everyone.”

“We are facing a complex budget year that will require us to make some hard choices. I am glad we are aligned with the Governor on the priorities that must be protected as we work to craft a balanced budget that funds the programs Oregonians urgently need while consolidating where we can to make sure the state is running effectively and efficiently,” said Sen. Elizabeth Steiner (D-Portland), co-chair of the Ways and Means Committee.

The House Republican Caucus responded with the following statement:

“Oregonians are experiencing an inflation rate over eight percent and economists are predicting a mild recession over the next year. The Governor’s budget reflects the financial vulnerability individuals are feeling on a daily basis. House Republicans believe the state budget should look more after Oregon families than our state bureaucracy.

"Since the beginning of the COVID-19 pandemic (2020), the State of Oregon has spent almost $1 billion in funding on the homelessness crisis. This was done under Governor Kotek’s watch as Speaker. Now, Governor Kotek wants to spend another $305 million over the next two years, not including $705 million in debt refinancing authority.

"Our Caucus is optimistic the Governor’s budget does not call for tax increases, but we remain concerned Governor Kotek and her agencies will raise fees on hardworking Oregonians. While the Governor’s budget does not take the Kicker, we are committed to returning these hard-earned dollars back to Oregon taxpayers.

"The Governor focused her budget on several topics our Caucus has also identified as priorities. However, we are disappointed there was no initial mention of other crises impacting our state such as transportation backlogs, a severe drought impacting our agriculture industry, public safety in our communities, or Oregon’s severe public defender crisis.

"Even though we are pleased the Governor acknowledged many of the struggles our students are facing, we cannot ignore Oregon’s reality as one of the lowest ranking states in student achievement. We believe in funding education with reform to the Oregon Department of Education.

"And finally, as the Caucus that represents every corner of our state, one of our greatest concerns remains that the Governor’s proposed homelessness initiative does not reach beyond the urban centers of our state. If Governor Kotek is going to stay 'Mission Focused' on being a Governor for all of Oregon, this must start now.”

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