Kotek notes early victories but focuses on what’s ahead

By PETER WONG
Oregon Capital Bureau

Tina Kotek took a victory lap on her 100th day as Oregon’s 39th governor to note legislative approval of two early priorities — more than most new governors get in their first days in office.

One is a $217 million package to aid unhoused people and lay the groundwork for more housing construction. The other is a $210 million package to aid businesses and others seeking a share of billions in federal money available for domestic manufacturing of semiconductors and advanced research in science. Both passed with significant bipartisan support, and she has signed them into law.

But the Democratic chief executive also said there’s more that lawmakers need to do before they close their 2023 session by June 25.

“Those who know me, know that when I cross something off my to-do list, my focus is already on what’s next,” Kotek told reporters on Wednesday. “For every step we take forward, there are three more that emerge, and I am eager to charge ahead.”

Among the items on her to-do list:

• $1.3 billion more for housing, $1 billion of it from state bonds for construction and preservation of housing — Kotek has said the ultimate solution to homelessness is to increase the supply of housing deemed “affordable” — and $300 million more for continued aid to unhoused people and their rapid rehousing during the rest of the two-year state budget cycle that ends in mid-2025. (The emergency package funds programs and sets targets through Dec. 31.)

 

“When it comes to rehousing individuals, we have to make sure that when folks have found stability in shelter, they have a pathway to permanent housing,” she said. “This brings up the other challenge of making sure housing is there. Across this state, the further we go into addressing this challenge, it is going to get harder until we also get more housing online.”

Though bond proceeds do not come from the tax-supported general fund that is the most flexible source for state government spending, bond repayments do.

• $80 million to $90 million more for behavioral health and treatment for substance use, on top of the $1 billion that lawmakers approved from a variety of sources two years ago.

 

“It’s not just about resources,” she said. “It’s about making sure we have the coordination so that no one is falling through the cracks,” such as transitional care for people who leave Oregon State Hospital in Salem.

• $120 million for a targeted effort to boost reading skills, which Oregon students have fallen behind on. Research has shown that additional problems arise when students are unable to attain grade-level reading by the third grade. House Bill 3198, whose chief sponsor is Democratic Rep. Jason Kropf of Bend, is pending in the Legislature’s joint budget committee.

 

“Our early literacy rates in Oregon are intolerable,” she said. “Change is coming. If passed and adequately funded, the bill will be a first step toward a long-term approach to improve how we support our students’ development inside and outside the classroom.

Kotek, who spent a record nine years as House speaker before she was elected governor Nov. 8, called on legislators to fund those requests.

Dispute over more money

Kotek proposed a two-year budget of $32.1 billion, some of that money from canceling a planned transfer into state reserve funds that now approach $2 billion.

But in the framework that the Legislature’s chief budget writers unveiled on March 23, they propose to spend about $500 million less than Kotek — and they scrapped Kotek’s plan to cancel transfers into reserves in favor of an across-the-board cut of 2.5% in agency budgets that draw from the general fund and Oregon Lottery proceeds. The cut does not apply to other sources, and bond repayments — which cannot be reduced — are excluded from the cuts.

The framework does set aside a pot of $325 million to pay for other priorities, among them the reading-skills money and temporary coverage for recipients who lose their eligibility for the Oregon Health Plan for low-income people. An estimated 100,000 people may lose coverage as a result of the end of a federal rule that barred states from removing people from Medicaid during the coronavirus pandemic.

Kotek said this during her meeting with reporters:

“We have $2 billion in reserves. I think it would be strategic not to put more in reserves, but to use some of those dollars to meet immediate goals, particularly around housing and homelessness, behavioral health and early literacy. I’ve been very clear about that and I will continue to advocate for those investments through the rest of this session.

“Why put more money there (in reserves) when we have immediate needs now?”

Simple legislative majorities are required to cancel the transfer of 1% of the budget’s ending balance into a new two-year cycle, as dictated by a 2007 law that created the state’s general reserve known as the rainy-day fund. Tapping either that fund or the education stability fund, which consists of lottery proceeds, requires specific economic triggers and 60% majorities in both chambers. Democrats are one vote short in each chamber of that mark.

Although the state’s latest economic and revenue forecast projects almost $4 billion in excess tax collections known as the “kicker,” Kotek said that option is not on the table. Tapping that money requires two-thirds majorities in both chambers, set by a 2000 ballot measure that wrote the kicker into the Oregon Constitution — and minority Republicans have made it clear they would oppose such a move. (The exact amount, which will be set by the first forecast after the start of the new budget cycle, is rebated in the form of credits against 2023 tax returns due in 2024.)

The next forecast is scheduled May 17, after which lawmakers will make final decisions about state spending.

‘Only been at this 100 days’

Even as Kotek noted her early successes in this legislative session, a Morning Consult survey has her as the nation’s least popular governor, a status similar to what her Democratic predecessor, Kate Brown, faced at the end of her second term. Kotek won 47% of the vote against Republican Christine Drazan and independent candidate Betsy Johnson, formerly a Democrat; there were also two minor-party candidates.

Of the past 10 governors going back to Republican Mark Hatfield in 1958, Kotek is only one of three who had not run statewide before being elected. The others were Democrat Neil Goldschmidt, who had been mayor of Portland seven years and U.S. transportation secretary, and Democrat John Kitzhaber, a former Oregon Senate president who won statewide recognition as chief author of the Oregon Health Plan, which dramatically expanded coverage.

Even before she took office, Kotek embarked on a tour with stops in all of Oregon’s 36 counties. So far she has visited six, and announced two more for Hood River and Wasco counties.

“I think there are a lot of Oregonians who don’t know me. That is why the One Oregon tour is very important,” she said. “My goal is to help Oregonians get to know who I am and hear what they need from me. It’s going to take some time, but we’ve only been at this 100 days. I’m confident that as we continue to communicate with Oregonians in a variety of ways, they will get to know me better and I hope they will like what I am doing.”

Partisan fights ahead

Although Kotek’s two early packages drew some Republican support in both chambers, Republicans have already said they will resist new Democratic legislative priorities to ensure access to abortion and reproductive and gender-affirming health care (House Bill 2002), ban firearms made with untraceable parts (House Bill 2005) and tighten the state cap on annual residential rent increases (Senate Bill 611).

Kotek, in her new role, still thinks lawmakers will act on her remaining top priorities.

“I think what you see in this Legislature is similar to past legislatures. There is a lot of consensus on a lot of things — and then there will be that handful of bills where there is going to be significant disagreement,” she said.

“My expectation is that legislators will get their job done because Oregonians are counting on them to do that, whether it’s housing and homelessness, behavioral health or schools. These issues they are taking up are important — but they have to get all of their work done. I think they can do that. Oregonians are expecting them to do that.”