Bend, OR – Oregon Governor Tina Kotek has unveiled a proposed two-year budget for the state, outlining a $138 billion spending plan that prioritizes three core issues: housing and homelessness, K-12 education, and mental health and addiction services. The proposed budget, which represents a 13% increase over the 2023 budget, highlights Kotek’s commitment to addressing some of Oregon’s most pressing challenges.

Speaking to the press on Monday, Kotek described the budget as a “stability budget,” emphasizing that it seeks to maintain and enhance existing services without introducing major new programs. The proposal is a starting point for the Legislature, which will convene in January for a six-month session with the critical task of passing a budget.

Housing Crisis at the Forefront

A significant portion of the budget, $1.8 billion, is dedicated to tackling Oregon’s ongoing housing crisis. This includes funding for affordable housing projects, shelters, rent assistance, and efforts to transition homeless individuals into stable housing. Kotek’s proposal includes $880 million for the construction of new affordable housing units, as well as $218 million to maintain existing shelter beds and $188 million to help people move from homelessness into permanent housing.

The Governor has long made housing a top priority since taking office, setting an ambitious goal of building 36,000 new housing units annually. Kotek noted that despite billions already spent, the housing crisis remains deep, and continued investment is necessary to make meaningful progress.

“Leadership is about taking on big challenges, and such challenges by their very nature cannot be solved overnight,” Kotek said. “Real progress requires persistence.”

Education Funding Boost

Kotek’s proposed budget also includes a notable increase in funding for Oregon’s K-12 schools. The Governor is asking for $11.36 billion for education—an increase of more than 10% over the current budget. Kotek argues that this funding more accurately reflects the needs of school districts across the state.

In addition to the core funding, the budget includes $127 million for early childhood literacy programs, $78.5 million for summer learning initiatives, and $25 million to support mental health and addiction treatment services for students. The Governor’s proposal aims to provide schools with the resources needed to address growing concerns around student well-being and educational outcomes.

Mental Health and Addiction Services

The Governor is also focusing on expanding mental health and addiction services, an area that has seen growing demand in recent years. Kotek’s budget includes $90 million in federal stimulus funds to add 336 new addiction treatment beds, as well as $50 million to increase educational opportunities for behavioral health providers. In addition, $40 million is earmarked for county programs aimed at diverting people with low-level drug offenses into treatment rather than the criminal justice system.

“We need to build a robust behavioral health system that can meet the needs of Oregonians across the state,” Kotek said. The budget also proposes $16.5 million for community mental health programs and $32 million for harm reduction strategies, including a statewide distribution of Naloxone to combat opioid overdoses.

Balancing Climate Action and Public Safety

In addition to these core priorities, Kotek’s budget includes provisions for addressing climate change and enhancing public safety. The proposal includes $40 million to support renewable energy projects and improve emergency preparedness in response to climate-related disasters. The Governor is also seeking $7 million to bolster the state’s ability to respond to emergencies, such as wildfires, which have increasingly threatened Oregon communities in recent years.

Public safety measures in the budget include funding for police officer training and resources to investigate drug overdoses and hold accountable those responsible for supplying illicit drugs. Kotek is also requesting $14.3 million in federal Medicaid funding to assist formerly incarcerated individuals in transitioning back to society.

Challenges Ahead

Despite the ambitious proposals, Kotek’s budget leaves some significant questions unanswered, particularly around funding for the state’s transportation infrastructure. The Governor has allocated $1.75 billion for the Oregon Department of Transportation to address shortfalls, but she has not outlined specific sources for this funding, leaving it to the Legislature to decide how to close the gap.

Republican lawmakers have already expressed concerns about Kotek’s spending plan, with Senate Republican Leader Daniel Bonham criticizing the Governor for doubling down on what he called “failed strategies” and warning that the budget would likely lead to new taxes.

“More government spending and bureaucracy won’t fix Oregon’s housing crisis, homelessness epidemic, health care affordability, or students’ success—it’ll make these issues worse,” Bonham said in a statement.

With Oregon’s budget battle set to heat up in the coming legislative session, Kotek will need to work closely with lawmakers to secure the support needed to turn her vision into reality. However, the Governor remains firm in her belief that tackling the state’s biggest challenges requires sustained effort and investment.

“Progress takes time,” Kotek said. “But I believe this budget is a step in the right direction.