Oregon Legislature Lines Up a Spending Blow-Out

By Eric Fruits, Ph.D.

While Oregonians are filling out their tax returns, their elected legislators are lining up some blow-out spending.

Last month, the Democratic co-chairs of the Legislature’s Ways and Means Committee unveiled a budget “framework” that proposes more than $6 billion in new general fund spending—a 24% increase from the last budget. The biggest increases are in K-12 education and human services, which includes Medicaid. 

Even though Oregon public school enrollment has dropped by 30,000 since before the pandemic, the co-chairs are proposing a stunning $1.2 billion increase in school spending. That’s an increase of more than $2,000 per student. 

Over the years, Oregon has added more and more people to its Medicaid program. Now, about one-quarter of the state’s population is enrolled in Medicaid or similar programs. Many of these new enrollees are not eligible for federal matching funds, so Oregon must pay 100% of the costs. As a result, human services spending has grown from one-quarter of the general fund budget to more than one-third of the budget. Even so, Oregon has the highest rate of addiction in the U.S., but ranks at the bottom for treatment facilities.

In addition, the co-chairs are earmarking more than half a billion dollars for salary increases and employee recruiting and retention. 

Over the past years, the state’s general fund spending has doubled. But, it seems the more they spend, the worse things get. Think about that when you’re paying this year’s tax bill and turning in your May ballots.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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