At the State Level
The Oregon Legislature will convene next month for its annual session. Its most important task will be rebalancing the 2025-27 budget because of federal cuts to Medicaid and SNAP from H.R. 1., passed this summer by Congress and signed into law by President Trump.

In a joint presentation to the Legislature this week, state officials from the Oregon Health Authority and the Department of Human Services indicated that they would need approximately $339 million to fill the federal cuts and to comply with new federal requirements. They include implementing new work requirements for both SNAP and Medicaid recipients and redetermining the eligibility of Medicaid recipients every six months. This means that the state would need funds to hire more employees and bolster their IT systems. The Oregon Legislature will decide in February whether to appropriate the necessary funds.

Nonprofits will play a key role in the new work requirements. Many SNAP and Medicaid recipients will volunteer at nonprofits to meet their work requirements. NAO will be tracking the activities of the February legislative session and reporting back on noteworthy activities.

 

At the Federal Level
SAMHSA Reverses Itself on Grant Terminations
Late Tuesday evening, multiple Oregon nonprofits received grant termination notices from the Substance Abuse and Mental Health Services Administration (SAMHSA), effective immediately as of January 13, 2026. The terminations were part of a nationwide action affecting approximately 3,000 SAMHSA grants, cutting nearly $2 billion in funding for addiction prevention, treatment, recovery, and mental health services across more than 2,000 programs around the country. The notices sent to grant recipients offered minimal justification, stating only that the services “no longer aligned with the agency’s priorities.”

Following an intense and confusing 24-hour period, those who received the initial termination notices have begun to receive notices that the funding cuts have been reversed.

This outcome was achieved in part through the collective strength of our network, including state association partners, the National Council of Nonprofits, and addiction and mental health providers who mobilized quickly. We extend our gratitude to everyone who contacted us and remained vigilant throughout this situation to enable us to respond as quickly as possible. This is only one of the reasons why your membership matters. If you’re not yet a member, we encourage you to join and become part of this impactful advocacy network.

If your organization received a termination notice but has not yet received official confirmation of its reversal, please contact us immediately at: [email protected].

As a reminder, NAO has been continually monitoring these types of government actions on nonprofits closely, and last month, in collaboration with the Coalition of Communities of Color, released a report on ‘How Funding Cuts are Affecting Oregon Nonprofits.’ In case you missed it, you can review the report for additional context and analysis here.
Sanctuary Cities Funding

Earlier this week, President Trump announced that starting February 1, he will deny federal funding to states with “sanctuary cities,” local jurisdictions that limit cooperation with his administration’s immigration enforcement policies. Trump claimed such jurisdictions “do everything possible to protect criminals at the expense of American citizens.” While he did not specify which funds or states would be targeted, Oregon is expected to be affected. If the administration follows through, the state’s Attorney General is likely to challenge the action in court. NAO will provide updates as this situation develops.