Legislative ‘typo’ stalls funding to support industry in NW Eugene

Presenter: Eugene’s intergovernmental relations manager reviewed the city’s successes at the state legislature’s 2026 short session. But even though the legislature approved money for the Clear Lake Road area, the state won’t release those funds. At a work session May 27, IGR Manager Ethan Nelson:

Ethan Nelson (IGR manager, May 27, 2026): Ethan Nelson, city of Eugene IGR manager. My role is to advocate for the city’s policy and funding goals at the state and federal level. So, 2026 legislative session was focused on economic development and infrastructure investments by matching our local needs with legislators’ and the governor’s strategic priorities.

Eugene secured critical state funding to advance predevelopment activities in the Clear Lake Road industrial area. This project has received widespread support from local public agencies, as well as Eugene Chamber of Commerce, Onward Eugene, and numerous individual businesses in the region.

Sen. James Manning identified this project as a priority and was supported by other Eugene delegation members. And we secured an additional $5 million in state funds for the project.

During the fast-paced short session, Speaker of the House Julie Fahey identified the Eugene Airport expansion project as a priority for her district, and working with Eugene—with city staff—included a $1 million request for the project. These funds will support the current concourse, an expansion, and rehabilitation.

During the short session, Lane County sought a statutory revision to ORS 430 that would create clarity and flexibility toward the operations of state-supported crisis stabilization centers. Eugene was supportive of the effort, and House Bill 4070 passed the legislature and was signed by the governor. The statutory change clarified who is served and how they are served in designated stabilization centers.

A priority this year was also to ensure that the legislature’s allocation of $206 million for the ’25-’27 biennium for the newly created statewide shelter program stay fully intact. Fortunately, throughout all of the presession budget reduction scenarios, the Oregon Housing and Community Service Department never proposed any reductions to this vital funding, and the program stayed at the initial appropriated level.

The short session also focused squarely on balancing the state’s biennial budget, addressing the current and forecasted shortfall of federal health care funding, updating the Oregon state tax code, as well as addressing the likelihood of the transportation tax being referred to Oregon voters, which it was… 

With all of this to address over the course of five weeks, property tax reform discussions did not occur at the legislature. However, Eugene will continue to engage Rep. (Nancy) Nathanson as she implements the task force that was identified in House Bill 2321 from the ’25 session and with the League of Oregon Cities Revenue Reform Workgroup in the advance of the ’27 session.

Presenter: But at the June 3 IGR Committee meeting, Ethan Nelson:

Ethan Nelson (IGR manager, June 3, 2026): I’ve got meetings with our delegation coming on up… on items related to Clear Lake that have surfaced on the Clear Lake Road project. 

Presenter: Councilor Greg Evans:

Councilor Greg Evans: What issues have emerged on Clear Lake, Ethan?

Ethan Nelson: The legislation that passed—the bill that passed—it’s the big budget bill. And so and in that, the language, which is the statutory guidance given to the agency, was very particular, and it said ‘Clear Lake Road.’

Well, Clear Lake Road area.

He said, ‘No. It says Clear Lake Road.’

So the agency, Business Oregon, took that to—because we said, ‘Hey, Clear Lake Road Area, that’s what we’ve got in the materials that we provided for the grant and everything else, for the legislative documents, it talks about Clear Lake Road area and also, water infrastructure, not just wastewater.’

So, Business Oregon took that clarification to the Department of Justice to say, ‘This is what we’d like to do. What do you think?’

And DOJ said, ‘No. Statutorily, this is what the legislature says the funds should be used for, and so that’s what the restrictions are.’

And so we can’t use funding right now, can’t use funding for wastewater infrastructure that would extend to (I think it’s) South Union Road, and so it’s that kind of direct ‘Clear Lake Road’ versus ‘Clear Lake Road area.’

So that’s on the wastewater. And then the DOJ said, ‘No, you can’t use it for water infrastructure either.’

And we were planning on doing design concurrently in a package with our bids and then construction similarly. and so that’s right now. That’s problematic insofar as we need a legislative fix, and so more than likely, we’re going to request one.

We’re also asking the agency: ‘Could we do work that would be deemed eligible, but in the future? And so, if we get the statutory language changed, can it be applied retroactively that we did design work in the Clear Lake Road area and design work on water infrastructure prior to having a grant that said that?’

And so we’re navigating that. And that’s what I can’t navigate with the agency. Then we’ll likely seek a surgical bill from the Speaker that could get through early in the long session versus wait till the carry-forward bill, which these things tend to get included on. And that won’t come until maybe June.

Councilor Greg Evans: So we’re being punished for a typo.

Ethan Nelson: Now, I wouldn’t say it’s punished for a typo. I would say what happens is, is that in the scrum to get the budget bill written, Legislative Council is under a lot of pressure and they are gathering information on an ongoing basis and there’s very little opportunity for editing. And so once that bill comes on out, it’s pretty much baked.

Councilor Greg Evans: Baked.

Ethan Nelson: And so, so if you didn’t get it right the first time, then you’re likely going to do this…  

I’m working with our staff. We’ve got good information related to how this will impact the schedules for the design and then initiating bids to get the construction done.

And we’ve got some different options: If we get this outcome from Business Oregon, then this is what the schedule looks like. If we get this outcome from the legislature—of, like, an expedited bill that gives us what we want or gets that clarity we seek early on, like, in February—here’s the schedule. And then if it waits until June, here’s the schedule. 

Presenter: Eugene Mayor Kaarin Knudson:

Kaarin Knudson (Eugene, mayor): Our time with you is so valuable in Salem, and it’s a long session, and there’s a lot of ambitions attached to the session and a lot of work in areas where we’ll need to be working. And so I’m just trying to think of ways that, fixing, essentially, a typo from the last short session doesn’t become a primary outcome of the long session, because that would be, you know—

It is a reality we have to grapple with, but it’s definitely not the way I’m sure you’ve been imagining spending that time in the long session. Because your time is really valuable. I’m just thinking about how many other objectives and goals that we have attached to this session, and that we’ll also need to weigh in on that.

Presenter: The state bureaucracy stumbles in an early effort to be more business-friendly. Design and construction of needed infrastructure in northwest Eugene is on hold, due to what some elected officials are calling a “typo.”