Gov. Tina Kotek plans to ask the Legislature to spend another $600 million on housing and homelessness next year, building on record investments over the past few years as the state continues to grapple with a housing crisis.
She laid out some of her budget priorities during a Tuesday press conference in Salem, a little more than two months before lawmakers return to the Capitol for a 35-day dash to pass new laws and allocate money. Kotek and legislative leaders from both parties generally agree that housing, homelessness, addiction and public safety are top priorities.
Kotek’s biggest request, $500 million, will be tied to housing production. She set a goal of building 36,000 homes each year – nearly double the average number of homes built in Oregon in recent years. A 2022 state report estimates that Oregon needs to build more than 550,000 homes in the next 20 years to make up for years of underbuilding and keep pace with population growth.
“I’m really urging the legislators to be bold with one-time money to make sure we can move forward on our housing production goals here in the state,” Kotek said.
The state’s most recent point-in-time count indicates that at least 18,000 Oregonians are homeless. Shrinking that number will require not only more homes, but also more affordable housing, experts say.
Members of her Housing Production Advisory Council have suggested using state funding to train construction workers and create or expand loans, tax rebates and grants for developers building homes for low-income and middle-income families. Cities have also indicated they’ll need state help with infrastructure funding to build the streets, sewers, sidewalks and other infrastructure necessary to build new homes across the state.
Along with money to spur housing production, Kotek said she’ll ask for about $65 million to keep existing homeless shelters open and another $33 million for rent assistance to keep Oregonians who fall on tough times from losing their homes.
Lawmakers allocated almost $34 million this spring to help nearly 9,000 households avoid homelessness. By Sept. 30, the most recent date for which data is available, Oregon Housing and Community Services had spent a little more than $11 million and helped more than 3,800 households.
Kotek also plans to ask for money for summer learning, child care and road maintenance. Districts scaled back summer learning programs this summer after the Legislature failed to provide funding ahead of an April deadline. The $50 million Kotek will ask lawmakers to provide for summer learning this spring is far below the $240 million lawmakers approved in 2021 and the $150 million provided in 2022, when federal funding tied to the COVID pandemic gave the state and school districts more money to spend.
She’ll seek $59 million to maintain the state’s Employment Related Day Care program, which helps low-income families pay for child care and now has a waitlist. The program, which is facing a $123 million shortfall and indefinite waiting lists, allows families earning up to twice the federal poverty level – just less than $40,000 annually for a single parent with one child or $60,000 for a family of four – to have most of their child care costs covered and pay only a small monthly copay.
Other priorities
Kotek is also asking legislative leaders to commit to spending $19 million for the Oregon Department of Transportation to schedule overtime and equipment to meet winter road maintenance needs. The department announced in October that it planned to cut back on plowing and sanding this winter because of staff shortages, inflation and decreased revenue from gas taxes related to more fuel-efficient vehicles. The Legislature will take up a large transportation funding package in 2025, eight years after passing a $5.3 billion transportation package that was intended to cover needs for the next decade.
And other spending proposals could be coming. Kotek said she’ll work with lawmakers to review and revise the state’s methodology for providing school funding, as well as come up with a plan to provide funding for minimum teacher salaries. A teachers’ strike just wrapped up in Portland and other large districts, including Bend-La Pine and Salem-Keizer, are in negotiations as school districts around the state face budget shortfalls.
Kotek, who opposed the city of Salem’s failed payroll tax that she and about 21,000 other state employees based in Salem would have paid, also said she was open to legislation that would have the state make payments in lieu of taxes for state property within city limits. The capital city faces an estimated $15 million budget shortfall by 2026, and city officials estimate the untaxed state property within city limits would generate about $7.25 million annually if it were taxed.
Other capitals, including Olympia, Washington, receive such payments from their state governments. Kotek said she would likely sign such a bill if it arrived on her desk.
“Having state government in Salem is a benefit, and there are also costs to provide public safety services,” Kotek said. “I think there is a place for the state to do more to support Salem because of the number of properties we have here, but it will be up to the city of Salem and Salem legislators to bring something in the session.”
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