Last week, the Oregon Legislature convened in the second special session of 2020. This session focused on rebalancing the state’s budget in the wake of COVID-19. While lasting only one day, the work had been in motion for months.

In late May, the Legislature received a revenue forecast estimating that the economic impact of COVID-19 would reduce the state’s 2019-21 biennium revenue by $2.7 billion. This spurred the Ways & Means Co-Chairs, Senators Betsy Johnson (D-Scappoose) and Elizabeth Steiner Hayward (D-Portland) and Representative Dan Rayfield (D-Corvallis), to begin drafting a budget rebalance framework.

The Co-Chairs released their framework for budget rebalance in July. The plan prioritized education by utilizing $400 million from the Education Stability Fund, a rainy day fund focused on education, to retain operational funding levels for K-12, community colleges and public universities. The plan did call for 5% cuts to the OSU Statewides (Extension, Agricultural Experiment Stations and Forest Research Lab) and the State Programs at public universities.

In early August, the Way & Means SubCommittees held virtual public hearings. The Education Subcommittee took three hours of testimony on the proposed education budget rebalance. Over 100 stakeholders testified or signed letters in support of the OSU Statewides and state programs. There was so much written testimony summitted for OSU programs that the Committee created an OSU category in their exhibits record. Thank you to all the OSU Statewides and State Programs’ stakeholders who wrote in and/or presented to the committee. Your testimony made a difference!

Following the SubCommittee hearings, the Governor called the Legislature in for a Special Session on August 10th. For the second time this year, a session was held in a combination of in-person and virtual meetings from the State Capitol building, which remained closed to the public. However, unlike the previous session, the public was not given the opportunity to testify on bills.

At the end of the day, OSU fared well given the dramatic toll COVID-19 has taken on the state budget. The Public University Support Fund was preserved at the same level allocated in 2019, cuts to the Statewides were reduced from 5% to 2.5% and the legislature allocated $34.5 million in bonding authority for the Arts & Education Complex on the Corvallis campus, a project that was set to be funded during the 2020 session before the Republican walkout abruptly ended things. Thank you to all who helped advocate for this project over the last two years. It is exciting to see how your advocacy has turned this project into reality.

Unfortunately, the legislature did not change the proposed 5% cut to the State Programs and failed to fund bonding for the $12.9 million OSU Cascades Student Success Center, which had been previously slated for funding with General Funds in the February session. We will continue to advocate for the Student Success Center at OSU-Cascades as a top university priority.

In addition to budget matters, the legislature addressed a small number of policy bills related to unemployment insurance and criminal justice reform. It was unclear if the legislature was going to take up these matters until right before the session, which created significant tensions in the incredibly packed 15 hour session. OPB provides a good recap in this article.

What’s Next?

While this was 2020’s second special session, it may not be the last. The day following the session, legislative leadership and the Governor shared the potential for a third session, likely to address additional policy issues and budget reductions. Any decisions about further budget reductions would be in response to future revenue forecasts scheduled for September and December.

Meanwhile, budget development for the 2021-23 biennium is well under way. On August 13th, the Higher Education Coordinating Commission took the first formal step in submitting an Agency Request Budget to the Governor. The budget includes Policy Option Package recommendations (POPs) that would dramatically expand and transform the state’s need-based financial aid programs, support a stabilizing base funding package for public universities, and invest in capital construction.

There is also significant uncertainty on the reality of this request budget within the looming and projected budget shortfalls in the 2021-23 biennium. During the 2021 long session, we will more likely be in a situation to preserve the funding we already have and minimize cuts, along with all other state-funded entities. It will be imperative for OSU to once again engage our stakeholders to advocate for higher education and the importance of our land grant mission.

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