Committee moves OBDD budget (HB 5,024) to full Ways and Means despite some dissent

The Ways and Means Transportation and Economic Development Subcommittee voted Tuesday to move House Bill 5,024, the Oregon Business Development Department (OBDD) budget, to the full Ways and Means committee with a due-pass recommendation.

The Legislative Fiscal Office recommended a 2025–27 total-funds budget for OBDD of $1,801,284,094 with 200 positions and 196.13 full-time equivalent employees, a change the LFO described as a 20.8% decrease from the legislatively approved budget (driven by phase-out of one-time funding) and a 56.5% increase from the 2025 current service level. "The legislative fiscal office is recommending a 25-27 total funds budget for OBDD of $1,801,284,094.200 total funds 200 positions and 196.13 FTE," stated Ms. Dysart of the Legislative Fiscal Office during the work session.

Why it matters: The recommendation reauthorizes a mix of carryover and ongoing spending that funds broadband grants, housing infrastructure projects and other economic development programs. Several members expressed concern about adding ongoing positions and expanding programs at a time of uncertain future revenues.

Key budget components and proposals

- Operations division: The LFO recommended an operations budget that includes additional central-services positions tied to federal Infrastructure Investment and Jobs Act disbursements and funding for an agency economic development modernization IT project. The LFO described vacancy-savings adjustments and smaller reductions to certain services and supplies accounts.

- Business Innovation and Trade (BIT): The recommendation retains current-service-level funding for the Oregon Metals Initiative and OMIC after proposed reductions were reversed. The LFO also recommended $400,000 in lottery funds for contracted services supporting international trade efforts, with markets named in discussion including Japan and Canada. Representative Rachel Wynne, a subcommittee member, said, "I'm really pleased to see that we actually put some money into the international trade budget here." (Representative Wynne is a member of the House.)

- Economic equity and grant closeouts: The package extends one limited-duration position to close out grants under the economic equity investment program that had been funded with a one-time $8 million general-fund appropriation.

- Broadband and infrastructure: The LFO recommendation includes significant expenditure limitation for the Broadband Equity, Access and Deployment (BEAD/BEED) program (described in the materials as roughly $160 million in federal funds) and adds positions to support grant administration. The LFO differentiated four procurement/accounting positions (in operations) and four program delivery positions (in the infrastructure division) tied to broadband work.

- Carryovers and one-time projects: The proposal reauthorizes multiple carryovers and one-time expenditure limitations, including $44.1 million (other funds) tied to capital projects such as the Oregon CHIPS Fund and a $10 million University Innovation Research Fund allocation, $77.2 million in general-fund carryover for 44 housing infrastructure projects, and $263.1 million in other-funds carryover for infrastructure-finance authority projects. The arts division and the film office are funded at current service level with specified carryovers for previously authorized projects.

- Strategic reserve and program reductions: The LFO recommendation reduces the strategic reserve fund by $1.1 million (intended to be permanent in the recommendation), which affects the target for related performance measures.

Performance measures and program effects

The LFO recommended changes to key performance measures and targets to reflect the phaseout of COVID-era emergency business assistance grants and the reduction to the strategic reserve fund. The LFO analyst said the number of "jobs retained" target was lowered because the temporary grants are winding down.

Committee action and votes

Representative Kate moved the LFO recommendation to House Bill 5,024; the subcommittee adopted that motion without recorded opposition. The committee then adopted the LFO's recommended key performance measures and a "-3" amendment that reflects the LFO changes to fund types and totals. Finally, Representative Kate moved that House Bill 5,024 as amended be sent to the full committee with a due-pass recommendation. Rep. Kate stated on the record, "I will be a no on this today, even though I I made the motion." The motion to move the bill to full Ways and Means was adopted.

Discussion highlights

Members who spoke emphasized trade and broadband priorities and the difficulty of relying on one-time pandemic-era funds for ongoing programs. Senator Starr and Representative Wynne discussed international trade strategy and the practical limits and opportunities of expanding markets. Several members urged caution about adding ongoing FTEs and structural costs in a period of revenue uncertainty.

What the action does not do

The subcommittee's vote moved the LFO-recommended budget package to the full Ways and Means committee; it did not finalize capital-subcommittee decisions on infrastructure financing nor decide policy-level elements that other committees will address. The LFO noted that policy option packages related to infrastructure financing will be decided by the capital construction subcommittee.

Next steps

The subcommittee chair closed the HB 5,024 work session and noted the committee will meet the following day for the Department of Consumer and Business Services budget and related fee bill and policy bill items. The bill will next be considered by the full Ways and Means committee.