The Takeaway

Unlike previous sessions where political maneuvering built gradually toward the finish line, this year has been defined by a lot of waiting — waiting for a major issue to take center stage, waiting to see whether a transportation funding plan was all talk and no sizzle, and waiting for the revenue numbers that will shape the next state budget. To a large degree, the waiting ends next week with the release of the final revenue forecast and most committees working to advance bills before they shut down for the session. The process shifts from a slog to a sprint. Yet, it still feels like a marathon without a finish line.

The state budget plays an outsized role in every session’s politics, but this year’s process has been noticeably different. Federal funding uncertainty — particularly around the Oregon Health Plan — has introduced a persistent sense of political anxiety. In February, the Kaiser Family Foundation estimated that eliminating the enhanced federal matching rate for Medicaid expansion states would reduce available Oregon resources by $16.5 billion over a ten-year period. That possibility has loomed large over budget discussions, leaving lawmakers in a holding pattern without a clear fiscal runway. Although congressional leaders signaled this week that they’re abandoning far-reaching Medicaid cuts, the shift is unlikely to ease the broader tensions permeating the building.

As much as lawmakers are hoping next week’s revenue forecast brings clarity, it’s unlikely to deliver anything resembling certainty. The economy is facing mounting headwinds, driven by tariffs, trade disruptions, and shifting federal policy. While these forces are beyond Oregon’s control, they directly shape the state’s revenue picture and the political choices that follow. One factor within the state’s control, however, is the formula used to estimate state revenues — itself an inherent source of uncertainty. In November, state economists announced a shift toward more optimistic assumptions, fundamentally altering the risk calculation that underpins the budget. By assuming a rosier outlook, the new model increases the amount of funding available at the start of the two-year cycle. At the same time, it amplifies the fiscal risks if those assumptions clash with a recession or downturn — potentially forcing lawmakers to dig themselves out of a budgetary sinkhole.

The slow pace of policy-making this year has raised the specter that some decisions may be punted to a special session. Although long sessions are typically where major fiscal and policy work gets done, delays on several high-profile issues could leave key legislation unresolved by the time the session adjourns. While rumors of a special session are easy to dismiss early on, they’ve become harder to ignore as the clock winds down.

The final chapter of the 2025 session — the six weeks between the revenue forecast and the constitutional adjournment on June 29 — could bring heavy politics. While Democrats maintain supermajority control on paper, illness-related absences and vacancies in the House have weakened the leverage that status usually provides, especially the ability to pass revenue-raising bills without minority support. Historically, such constraints have led to structured negotiations between party leaders — quiet deals to pass or table bills in exchange for just enough support. In today’s more fractured environment, with fewer moderates and a limited appetite for deal-making, the strategy is often less about building consensus and more about identifying loose loyalties in the minority party to maneuver controversial or major legislation across the finish line.

What We're Reading This Week

• State Rep. Courtney Neron (D-Wilsonville) was appointed by county commissioners to fill a vacancy created by the death of Sen. Aaron Woods (D-Wilsonville). The local parties and county boards will now start the process for appointing a successor to the seat in the House.
• Oregon House Republicans last week announced an alternative plan to shore up budget woes for the Department of Transportation without raising taxes. Within a few days of releasing the plan, local media are noting accounting issues reducing the proclaimed savings.
• Oregon Public Broadcasting discusses the increasing use of "placeholder bills," legislation filed with innocuous contents, only to be replaced with meaningful or controversial material later in the session.
• Oregon's Department of Transportation found errors in an economic study to determine road usage and revenues, which could potentially result in slightly lower gas tax increases for the transportation funding package (if it passes).
• The Oregon Government Ethics Commission rejected a proposed settlement with former Secretary of State Shemia Fagan (D) and instead doubled the penalties, concluding the saga of the controversy that rattled state politics two years ago.