Subcommittee advances Senate Bill 5536 funding for Oregon Department of Revenue

The Joint Committee on Ways and Means Subcommittee on General Government voted June 2 to advance Senate Bill 5536, the appropriation bill for the Oregon Department of Revenue, to the full Ways and Means Committee with a do-pass recommendation after adopting the LFO Dash 1 amendment.

The Legislature’s Fiscal Office recommended a 2025–27 biennial budget for the Department of Revenue that includes $272,868,226 General Fund, $169,974,714 Other Funds and 1,147 positions (1,092.82 FTE). Lawmakers adopted a budget note directing the department to report to the subcommittee during the 2026 session on findings from an outside consultant and on workshops held with impacted state and local entities about a new cost-allocation methodology.

The subcommittee’s action followed a staff presentation that summarized across-division adjustments in the LFO recommendation. Staff said several divisions received small reductions tied to “vacating the fifth floor of the Revenue Building,” a recurring Package 90 adjustment to reflect lost rent costs; the administrative division’s Package 90 reduction was listed as $1,322,501 General Fund and $443,424 Other Funds. The LFO presentation also described targeted “right-sizing” reductions where actual program expenditures have been lower than prior budgets, including a roughly $10.7 million Other Funds reduction in the property tax division tied to the county assessment function funding account and ORMAP and a $12,569,339 Other Funds reduction in the senior citizens property tax deferral program to align budgeted limitation with anticipated participation.

The LFO presenter identified some workforce changes in the Dash 1 package and related LFO packages: Package 802 eliminates multiple long-vacant positions agencywide (the property tax division loss included one appraiser analyst 3, 1.0 FTE, vacant since November 2023), and other packages remove several seasonal or otherwise vacant positions. The collections division will add staff under Package 106: the LFO recommendation increases Other Funds expenditure limitation by $1,903,364 and adds 11 positions (9.68 FTE) to manage a projected increase in accounts tied to the Oregon Employment Department and implementation of Paid Leave Oregon; funding for those positions was described as fee-supported collection services.

Department leadership answered lawmakers’ questions about the vacancy savings and program changes. “The savings is our rent cost,” said Betsy Eimholt, director of the Department of Revenue, when asked where Fifth Floor savings originate. Stefan Hamlin, the department’s chief financial officer, described the larger reductions as “right-sizing the program” to reflect actual expenditures in recent bienniums.

Lawmakers also discussed the senior property tax deferral program’s low take-up rate and possible outreach or eligibility changes. Director Eimholt said the department had proposed eligibility changes during the session (for example, changing a five-year residence requirement to three years) and that outreach—such as in-person county events—was a priority: she said the department attends county fairs and is open to broader public information efforts. Representative Tran suggested collaboration with AARP; Eimholt said the department already works with AARP on other outreach and would check that relationship for this program.

The subcommittee approved key performance measures and targets for the department for the 2025–27 biennium and adopted one budget note directing the department to report in 2026 on the consultant-supported monetization of the current cost-allocation methodology and on workshops with affected agencies, local governments and transit districts.

Representative Gomberg moved the LFO recommendation, and the subcommittee adopted the Dash 1 amendment and the LFO recommendation on the bill. A roll call taken during the session recorded ayes from Representative Gomberg, Representative Reschke, Representative Jaichie, Representative Tran, Senator Anderson, Senator Manning and Senator Gorsuch; the co-chair was recorded as excused. The subcommittee then voted to send Senate Bill 5536 as amended to the full Ways and Means Committee with a do-pass recommendation.

Budget details highlighted in the LFO materials included a one-time carryover of bond-proceeds expenditure limitation tied to the ELVIS (electronic valuation information system) project: an Other Funds increase of $505,503,430 to carry over bond proceeds from the 2023–25 biennium. The information technology services division budget also includes ongoing licensing and maintenance costs for ELVIS (LFO Package 101: $496,650 General Fund and $148,350 Other Funds listed for continued costs).

With the subcommittee’s action complete, staff said the next work session on the agenda for the subcommittee will be on Senate Bill 5534, the appropriation bill for the Oregon Department of Public Utility Regulation (PURs), scheduled for the following day.