State Activities
State Budget Actions
Local Government Actions
Modernization of Public Sector Grantmaking and Contracting
Latest 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.
State Budget Actions
The passage of the massive federal H.R. 1 tax and budget reconciliation bill in summer of 2025 threatens Oregon’s fiscal health. For the next three biennia, Oregon is estimated to lose $15.1 billion in federal funds. These losses are primarily from cuts and new administrative requirements in the SNAP and Medicaid programs. Federal funds comprise nearly 30% of the state’s biennial budget. In early 2026, the legislature closed the 2025-27 budget hole created by H.R. 1 by disconnecting from selected federal tax deductions from the state tax code, shifting funds from one of set of programs to others, and benefiting from a better than expected state revenue forecast in the first quarter of the year. Still, Oregon like other states will feel the reverberations of H.R. 1 in their budgets for the foreseeable future. Learn more in the Resources section below.
Local Government Actions
Nonprofits are navigating the different government responses to federal funding restrictions. Some governments at the local level are choosing to accept federal funds and adjusting their diversity, equity, and inclusion policies while others are maintaining them. This has left nonprofits with conflicting compliance requirements from different government funders.
Nonprofits are being asked to comply through certifications and representations attached to federal funding that flow to local government. At the end of that flow of funds is the community itself. Deeply tied with the community are the thousands of nonprofits that administer the services funded by those governments. NAO is reaching out to state and local governments to encourage coordination on their DEI policies as new or continuing contracts and grants are awarded to nonprofits. We will keep you updated on any developments. See the Resources below for guidance from Oregon DOJ.
Modernization of Public Sector Grantmaking and Contracting
The State of Oregon partners with nonprofits through grants and contracts to deliver a wide range of essential services across communities statewide. Nonprofits play a vital role in areas where community-based, culturally responsive approaches and local trust are essential to the effective implementation of legislatively funded services. These include behavioral health, housing, children and youth services, public health, human services, and emergency response.
NAO has researched public sector grantmaking and contracting systems with nonprofits and, more recently, advanced legislation to address systemic challenges. In 2023, NAO, in partnership with Northwest Health Foundation and a coalition of supporters, introduced Senate Bill 606, which established a task force to study government grantmaking and contracting procedures and stipulations that hinder nonprofits and to recommend structural and procedural improvements. Building on those recommendations, Senate Bill 602 was introduced in the 2025 legislative session. While SB 602 did not pass, NAO is continuing discussions with legislators to reintroduce the bill in the 2027 session.
Refer to the Resources below to learn more about NAO’s research, the Task Force recommendations, and Senate Bill 602.
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