Lane County told to expect federal, state budget uncertainty as legislators prepare biennial numbers

Policy Director Steve Adams told the Lane County Budget Committee on May 14 that uncertainty at the federal and state levels could materially affect Lane County's budget planning, particularly the upcoming biennial revenue forecast and several federal programs that fund county services.

Adams said lawmakers in Washington are using the budget reconciliation process to consider a broad package that would address the 2017 Tax Cuts and Jobs Act's scheduled expirations, defense and homeland security funding and other priorities. "This is what everyone is focused on right now," he said, describing reconciliation as a vehicle that would allow passage of major measures by a simple Senate majority.

He warned that Congress is also navigating an expiring debt limit, pending questions over executive impoundments of previously appropriated funds, and discussions of rescission packages that policymakers have described in the hundreds of billions of dollars. "We're in a period in which Treasury is using extraordinary measures to ensure that we can pay bills," Adams said.

On state finances, Adams flagged next Wednesday's final revenue estimate for Oregon as the number that will shape legislators' work on the two-year state budget. He said federal grants make up roughly 32% of Oregon's overall budget and that changes at the federal level ' including proposals to change Medicaid rules, or to share costs of SNAP (the Supplemental Nutrition Assistance Program) ' could force rethinking at the state level. "Federal funds make up 32% of the state's overall budget," he said.

Adams also described how reconciliation and other federal processes could alter large program funding and tax provisions, and observed that committees of jurisdiction are drafting bill text on tight timelines. He noted the Senate's special procedural tests (the Byrd Rule) and said it is likely that some provisions will be temporary rather than permanent because of scoring constraints.

Why it matters: Lane County relies on state and federal grants for health, transportation and recovery programs. Adams singled out his office's interest in Medicaid, SNAP, and transportation funding as areas where changes at higher levels of government could translate to the county's bottom line and service capacity. He and staff are monitoring possible rescissions or impoundments and the larger reconciliation package to advise county budget decisions and grant applications.

Supporting details - Adams said the Administration's so-called "skinny budget" proposes deep cuts for many federal agencies outside defense, and that congressional appropriations will require 60 Senate votes for fiscal 2026 appropriations unless reconciled in other ways. - He said the House is pursuing a large reconciliation package and committees are preparing instructions and markups; the agriculture committee was expected to mark up legislation touching SNAP, and Energy & Commerce has been asked to find substantial reductions related to Medicaid. - Adams warned that Congress faces both the debt limit and possible rescission actions; he said some rescission packages are under discussion and that legal questions about executive authority have been raised.

What the county will do next - County staff will monitor the state revenue estimate and federal legislative actions and return to the board with analyses on how changes may affect county programs and state appropriations the county seeks. - Adams said the county is prioritizing capital funds for behavioral health stabilization and is watching ODOT, OHA and other state agency budgets that support county programs.

Ending note: Adams advised the committee that the coming weeks are particularly consequential for the county's budget planning and that federal and state developments could require midcourse adjustments to budget proposals and grant strategies.