Vanessa Cornwall previews the 2027 legislative session

John Q: Local officials hear the latest about the upcoming 2027 legislative session. At the Human Services Commission Oct. 19, Lane County’s Vanessa Cornwall:

Vanessa Cornwall (Lane County, intergovernmental relations officer): I’m Vanessa Cornwall. I’m the intergov relations for Lane County, and am here today presenting before you a little bit of a 2027 session preview. Much will be focused on what we expect the budget to look like.

So, as I’m sure you are all aware, the agent requested budgets have been released by the major agencies, and speculation around what the session is going to look like around those and the governor’s recommended budget.

The most recent revenue forecast showed a higher than projected state revenue for the upcoming biennium. But that didn’t account for the increased energy prices remaining high. Speculation was kind of showing that those might taper off. But current action at the federal level has kept them at a higher and increased payouts than what was currently projected.

And then the final implications of HR 1 are not fully known and will not be fully known until after the first of the year.

So, much of what legislators will be making decisions around, will be influenced by the November revenue forecast. And then the second revenue forecast in February, we’ll have a little bit more time to kind of figure out what they’ll have to play with and then go forward with the recommendations from there.

We will continue to monitor that process just to see if there’s going to be any particular changes that we need to look out for. And then what those revenue forecasts will ideally show as the final amount that the state will be able to work with.

John Q: She shared insights into several of the state agencies that fund the county: ODHS, (the Department of Human Services), OHA (Oregon Health Authority) and OHCS (Housing and Community Services). Lane County’s Vanessa Cornwall:

Vanessa Cornwall: ODHS will be going after the current service level with the inflationary increase. So we expect that ask to be around $8.5 billion for the general fund.

And then across the six major program areas that they oversee, much of that focus will be tailored to intellectual and developmental disabilities, and then aging and people with disabilities, which together account for roughly 69% of their total budget.

Federal funding represents nearly two-thirds of their six-program budget, so we do know that ODHS is working within a constrained fiscal environment and the need to balance the growing service needs mainly around their caseworkers with the efforts to identify efficiencies and potential reductions for counties and for local municipalities that kind of oversee these programs on the ground level.

The key issue will be how state funding decisions affect the stability and availability of local human service systems that our residents depend on.

For OHCS, again, a challenged physical environment. But the emphasis will be on preserving existing services for them, maximizing available resources and then continuing investments in the affordable housing space while limiting new general fund commitments.

They have specific line items for LIFT rental programs, permanent supportive housing, and LIFT home ownership. The agency will also be asking for funding tied to the manufactured home community preservation, so they can continue focusing on preserving the affordable housing options that are available.

However, we are very concerned with the housing stabilization division because that supports the shelter, rehousing, eviction prevention, and long-term rental assistance. Going back to the ‘25, ‘27 budget, it did include significant one-time investments for these programs, but OHCS has identified challenges in maintaining those services without ongoing funding.

So the agency has not identified new revenue or new revenue-neutral policy for the housing stabilization, making the continuation of those services a key concern. They are leaving that dollar figure to the governor’s office to identify.

Providers and organizations that are very passionate about these dollars are currently working through a process to let the governor know how important these services are and how important it is to continue funding these services so we can continue to deliver for the people here.

We know that OHA will have to wrestle with Medicaid funding and the current CCO model and then whether or not that will be fiscally sustainable.

We also will have to contend with possibly losing oversight of the state hospital, which could impact behavioral health dollars and FTE appropriated by the legislature. That was introduced sometime last week, and OHA is still figuring out what exactly that’s going to look like. So more to come on that.

But that’s just kind of a little bit of a preview of the challenges that they are having to deal with in addition to the HR 1 implications.

John Q: ODOT is the Oregon Department of Transportation. Vanessa Cornwall:

Vanessa Cornwall: And then finally, ODOT will need to close a $200 million funding gap while also determining whether or not to move forward with a large funding package for local transportation revenues, transit major projects. The Transportation Vision Work Group is currently putting together their recommendations for the governor to review, and that will be expected within the next month or so.

As I mentioned, the agency-requested budgets have gone to the governor, and the governor will put together what is called the governor’s recommended budget, which we expect at the beginning of December.

Insights around the governor’s thoughts are few and far between at the moment. Advocates have made their concerns known to her and to her staff. But all we’ve been able to get confirmed is the funding priorities around education, specifically K-12 and a restructure of the state hospitals.

In the beginning of December, we’ll have a better idea of what to expect, and legislators will also have a better idea of where their allegiances will lie when it comes to approving the governor’s recommended budget.

And going back to the beginning with the revenue forecasts, legislators are going to wait to release any information about what they might prioritize as funding, whether or not plus-ups might be an option, to wait till the next revenue forecasts are available.

Most conversations are revolving around revenue raising and what the state can do to bring additional revenue to these programs. So that might mean looking at current tax structure, kicker reform, any use of the rainy day fund—all are on the table and all have been discussed.

Others have been suggesting possibly targeting other revenue raisers, like document recording fees, beer, wine, cannabis tax, anything and everything to try and shore up programs.

As far as what Lane County is going to be paying particular attention to, there’s a lot to track. And the governor’s actions around the housing stabilization division will be a big one for us. Again, we’re building on the partner coalitions and the supports to keep the program whole.

We’re watching OHA around Medicaid reform and potential impacts to our community health centers. We’re watching potential budget reduction scenarios within ODHS and the request to regionalize IDD services while cutting the budget by $18 million.

That was a suggestion within the agency-requested budget, but it does not mean that it will actually happen. Providers are making their concerns known around that, and it’s possible that that will not even see the light of day moving with the committee work groups as we go into budget review for 2027.

John Q: Intergovernmental Relations Officer Vanessa Cornwall briefs the Human Services Commission Monday.