Astoria, OR – As Oregon’s 2025 legislative session begins, the state’s 90 lawmakers are poised to address a range of pressing issues, including a two-year state budget, funding for transportation infrastructure, solutions to the housing crisis, and improving education and behavioral health services.
The primary task for lawmakers this session is crafting a spending plan for the next biennium. Governor Tina Kotek has proposed a $39.3 billion budget, but lawmakers will need to review and adjust this proposal in the months ahead. The latest economic forecast suggests the state can afford up to $37.8 billion in spending, with two more forecasts scheduled before the final budget is approved.
Democrats hold a supermajority in both chambers of the Oregon Legislature, providing them more flexibility to raise revenue. However, Republicans have expressed concerns about such moves, particularly over the possibility of tax hikes. Senate Minority Leader Daniel Bonham, R-The Dalles, voiced his frustration over what he perceives as an exclusionary approach from Democratic leadership, who have signaled their intent to pass tax increases without Republican input.
Oregon’s transportation system also remains a focal point. The Oregon Department of Transportation (ODOT) estimates the state needs an additional $1.8 billion per year to address road maintenance and repairs, not including major projects like the Interstate 5 bridge connecting Portland to Washington. Kotek has firmly rejected the idea of using the general fund to fill this gap, arguing that doing so would divert funds from critical areas such as education and housing.
Transportation funding issues are not unique to Oregon, with states across the country grappling with reduced gas tax revenues due to the increasing prevalence of electric and fuel-efficient vehicles. Oregon lawmakers will need to find a sustainable solution to this funding shortfall, possibly through alternative revenue sources or restructuring existing funds.
Addressing the state’s housing crisis is another high priority for lawmakers. Governor Kotek aims to build on the success of a 2019 law that allowed more “middle housing” — such as duplexes, triplexes, and cottage clusters — to be constructed in areas previously zoned only for single-family homes. Her proposed legislation, House Bill 2138, would expand this policy to more areas, including unincorporated lands, and limit the ability of local governments or homeowners associations to block the construction of such housing.
Despite these efforts, Senate Majority Leader Kayse Jama, D-Portland, acknowledged that Oregon is still far from solving its housing shortage. He emphasized the importance of continuing to build affordable housing while acknowledging the state’s historical underbuilding problem.
In addition to addressing the housing shortage, Kotek has called for more support for homeless individuals, particularly those struggling with mental health and addiction. Her administration is pushing for a new model of supportive housing designed to help people with serious mental health challenges live independently, as well as a pilot program to provide emergency shelter for people waiting for residential addiction treatment.
Education continues to be a key issue, with Kotek proposing a historic $11.36 billion biennial budget for Oregon’s K-12 schools. This includes a $500 million increase to the state’s school funding formula and nearly $80 million in funding for summer learning programs. However, Kotek has emphasized that more money must be accompanied by increased accountability, particularly for underperforming schools.
Republican lawmakers, such as House Minority Leader Christine Drazan, R-Canby, argue that the focus should be on empowering families and local communities to take more responsibility for student outcomes, rather than expanding the role of the state education department. Drazan’s stance reflects a broader ideological divide on how best to address the state’s education challenges.
Oregon’s behavioral health system is facing a crisis, with long waitlists for mental health and addiction treatment beds and overcrowded hospitals. Kotek is advocating for the expansion of “intensive permanent supportive housing,” a model designed to help people with severe mental health challenges live independently while receiving the care they need.
Rep. Pam Marsh, D-Ashland, has introduced legislation to provide emergency shelter for people waiting for residential addiction treatment. The goal is to prevent homelessness while individuals wait for a treatment bed to become available.
Further reforms are also being considered to improve the discharge process from Oregon’s strained hospital system. A state task force has recommended changes to Medicaid and hospital procedures to streamline patient flow and reduce bottlenecks, particularly for individuals who no longer need acute care but are unable to move to long-term care facilities due to logistical or financial barriers.
On the environmental front, Governor Kotek has expressed concern about Oregon’s water resources, with particular attention to the state’s Groundwater Quality Protection Act. Oregon has long struggled with over-allocated water resources, and Kotek is pushing for updates to the law to ensure sustainable water use in the coming decades.
Additionally, Kotek’s administration is focused on securing more reliable funding for wildfire prevention and response. One proposal includes using funds from the state’s transient lodging tax to bolster the wildfire fund, while another suggests investing Oregon’s $1.8 billion revenue surplus into a long-term fund that could generate interest for wildfire-related expenses.
With five months of work ahead, Oregon lawmakers face an ambitious agenda filled with complex challenges. While there is broad agreement on the need to address issues like housing, education, and behavioral health, finding common ground on how to fund these priorities — and balancing the interests of different political factions — will be key to the success of the 2025 legislative session.
