Latest State News

The Oregon Legislature adjourned last Friday after rebalancing the state budget without making big cuts. Thanks in part to a better-than-expected state revenue forecast, decoupling the state’s tax code from selected federal tax deductions, and shifting funds from selected programs to other programs. The Oregon Health Authority and Department of Human Services did receive most of the funds they requested to implement the new federal requirements for SNAP and Medicaid.

One of the bills that NAO tracked, House Bill 4094, died in committee. As chronicled in the past NAO Updates, the bill would have required employers to payout unused earned paid time off when an employee separates. It appears that lack of consensus among impacted parties caused the bill’s failure. There may be a work group formed during the interim to find a workable solution. We’ll keep you updated.

Other notable actions the legislature took were:

• Increasing the earned income tax credit to 14% for individuals and 17% for families; and
• Disconnecting several tax breaks created in the federal HR1 bill last summer from Oregon taxes, which clawed back hundreds of millions of dollars and closing current fiscal year budget gaps.

The legislature chose not to pass the following noteworthy bills:

• Creation of a workforce standards board for home care workers;
• Suspension of state payments to the federal government if the federal government withdraws federal funds illegally; and 
• Collection of data from employers with employees who must seek public assistance to meet basic needs. 

One final note: gubernatorial candidate and state representative Ed Diehl announced that he will seek signatures to repeal Senate Bill 1507, which decouples the federal tax deductions identified in the bill while leaving intact the increase in earned income tax credit. If successful, voters in November will have the chance to decide whether to remain decoupled from the three main federal tax deductions in the bill. If not, the state budget will fall out of balance again.

The legislature will not hold another session until 2027. Instead, they will meet for interim meetings for the remainder of the year.