Subcommittee Approves LFO Budget Recommendation for Department of Early Learning and Care, Adopts Dash‑2 Amendment

The Oregon Education Subcommittee on June 3 adopted the Legislative Fiscal Office (LFO) recommendation for Senate Bill 5514, the Department of Early Learning and Care (DELC) budget, including the dash‑2 amendment, and moved the amended bill to the Ways and Means Full Committee with a due‑pass recommendation.

The LFO presented the recommended 2025‑27 budget and identified staffing and program investments and several reductions to balance available resources. The LFO told the committee the dash‑2 amendment reflects the following totals: $741,005,493 general fund; $461,548,029 other funds; $247,006,772 federal funds; and 376 positions (369.2 FTE). The LFO also described agency operations investments including $2,600,000 general fund for seven permanent positions (5.64 FTE) to enhance accounting, data analytics, project management and program design and administration, and ongoing professional services and system maintenance for an awards management system and the Healthy Families Oregon database.

On childcare licensing, the LFO proposed a $3,100,000 federal funds expenditure limitation for 13 permanent positions (12.06 FTE) to reduce licensing caseloads toward national best practice ratios and strengthen customer service and compliance. The LFO also stated that $700,000 general fund currently budgeted for the early learning tribal hub would be deposited into the Tribal Early Learning Fund established by House Bill 2815.

The LFO described revenue pressures from the May 2025 Oregon economic and revenue forecast prepared by the Department of Administrative Services, Office of Economic Analysis. That forecast, the LFO said, projects corporate activity tax resources of $3,160,000,000 for the 2025‑27 biennium, a decrease of $195,300,000 from the current service level, and said the Fund for Student Success cannot sustain its 2023‑25 current service level at that revenue projection. To balance resources, the LFO recommended program reductions including the removal of above‑standard inflation ($10,200,000 general fund and $8,700,000 other funds) and a $35,400,000 other funds reduction from programs funded through the early learning account; program reductions equal a 4% total funds reduction from the 2023‑25 legislatively approved budget.

Committee members debated the budget recommendation. One representative raised concerns about prior fraud and oversight issues in childcare programs and said "there needs to be a true audit;" that same lawmaker said taxpayers would want accountability and that, for that reason, they would vote no on the recommendation. Representative McLean praised the agency's work and the budget process, saying in the record, "I want to indicate also that I know how hard it was to help guide cuts that you had to accept this year," and expressed support for the recommendation. Representative Wright said he had discussed past problems with the director and planned to vote yes.

The committee adopted the dash‑2 amendment without objection and then moved SB 5514 as amended to the full committee with a due‑pass recommendation. A roll call recorded at the subcommittee showed the following votes on the motion to move SB 5514 as amended to full committee: Representative McLean — yes; Representative Hudson — yes; Representative Wright — yes; Representative Youngberg — no; Co‑Chair Ruiz — yes; Senator Frederick — yes; Senator Weber — yes; Co‑Chair Solman — yes. The motion carried.

Committee members were reminded to watch OLIS for scheduling of follow‑up budget hearings.