Enacted Budget – Fiscal Years 2026-2027
Oregon Governor Tina Kotek signed into law a series of bills this summer comprising the state’s biennial budget for fiscal 2026-2027, while government agencies operated under a continuing resolution for a period to allow time to finalize the budget. The biennial budget, as finalized by the legislature on June 27, plans for total fund spending over two years of $138.9 billion, a 6.3 percent increase from the enacted budget for the prior biennium. The total budget includes $37.3 billion in general fund spending and $1.8 billion in lottery fund spending, with the combined general and lottery funds enacted budget up 11.7 percent compared to the previous two-year budget. The legislatively adopted budget is based on combined general and lottery fund resources of $39.7 billion, including a $2.2 billion beginning balance and $37.5 billion in projected revenues (net of personal income tax kicker), and after accounting for various transfers, reversions, dedications, revenue enhancements and reductions. The state forecasted combined balances in the general fund and lottery fund of $554 million at the end of the biennium. The state projects reserves at the end of the fiscal 2026-2027 biennium to include $1.26 billion in the Education Stability Fund (ESF) and $2.16 billion in the Rainy Day Fund (RDF).
The enacted budget increases school funding to historic levels while also creating a new school accountability framework. It provides for a 17 percent increase in Medicaid funding over the previous biennium, mostly to address rising caseloads and inflation, while also investing new resources to strengthen the state’s behavioral health system. The legislature also approved a plan to direct interest earnings on the state’s rainy day fund along with revenue from a new tax on oral nicotine products towards wildfire mitigation and prevention efforts. Additionally, the budget directs more funding towards public defense and allocates funds towards homeless shelters.