Subcommittee Hears OSBN Budget Request, Board Seeks Fee Increases to Cover Rising Costs

The Joint Human Services and Ways and Means Subcommittee held a public hearing Feb. 25 on House Bill 5023, the governor's recommended budget for the Oregon State Board of Nursing, which would add two investigators, increase limitation for testing and other pass-through expenses, and raise licensure fees.

The Oregon State Board of Nursing told the committee the agency is seeing record license growth and heavier investigative caseloads, prompting requests for new positions and an adjustment to licensing fees that have not changed since 2009.

DAS financial analyst Hari Velopondian presented the governor's recommendation, saying the package adds two investigators and increases limitation for testing contracts and payments to the Oregon Nursing Advancement Fund. Velopondian said the budget would also support a planned fee increase in the 2025–27 biennium. "The governor's budget for the Oregon Board of Nursing supports the current service level and addresses emerging issues by adding a pair of investigators and increasing limitation for those pass through expenses," Velopondian said.

Rachel Prusak, executive director of the Oregon State Board of Nursing, told the committee the board updated its mission in 2024 to include "nurse wellness as public protection" and described three strategic initiatives: customer service, diversity/equity/inclusion, and employee retention and recruitment. Prusak credited recent staffing and the reestablished contact center with improved service metrics after phone lines were closed during the pandemic.

Prusak and John Ethington, the board's operations and fiscal manager, laid out driving factors behind the request: rising application volumes, higher fingerprint and testing costs, growing Department of Justice costs tied to investigations, pay and classification changes, and a new CNA/CMA testing contract with higher rates. Ethington said the board had estimated expenditures of about $30,349,000 for the 2025–27 biennium and that proposed fee changes would raise additional revenue to help match rising expenditures.

The board described investigation workloads as particularly strained. The agency reported 1,796 complaints in 2024; investigators brought 853 completed investigations before the board, of which 761 were closed and 114 ended in discipline. The agency said investigators average about 78 cases each, with some carrying more than 100; OSBN described the caseload as well above recommended levels of 40–50 cases per investigator. The board said roughly 900–1,000 cases are open at a time and that the average number of days before a case goes to the board is about 213, with some cases taking more than a year.

Prusak described the investigative process delays that result from paperwork and subpoena timelines. "Medical records can take 3 to 4 months to receive," she said, and explained that the statute sets a 120-day target for investigations but that record delays and caseloads make that target difficult to meet.

To address finances, the board described a proposed fee schedule change (a modification to OAR 850‑012). The board said it is proposing a $100 increase for registered nurses, advanced practice registered nurses and similar license categories and a $35 increase for licensed practical nurses; the board expects those changes to generate an estimated $7,000,185 from RN-related applications per biennium, $189,315 from LPN applications, and $704,700 from APRN applications based on historical application counts the board presented. The board said the last fee increase was in February 2009 and that the proposed increases would align Oregon's fees more closely with neighboring states.

The board also described previous staffing changes and short-session or emergency board funding that affected budgets in recent biennia: the board added four permanent positions during the 2023 session, and in 2024 added an investigator, a call center supervisor and an additional manager; an emergency board action provided a one-time increase of $600,000 for past-due expenses and Attorney General costs, according to the presentation.

Emerson Hamlin of the Oregon Nurses Association testified in support of House Bill 5023. "ONA is fully supportive of House Bill 5023," Hamlin said, adding that the association represents more than 21,000 nurses and that adequate OSBN staffing would speed licensing and disciplinary timelines and support public safety.

Presenters and testifiers emphasized that proposed fee increases would fund investigators, address DOJ and testing costs, support the Oregon Nursing Advancement Fund (funded by a $9 surcharge on applications), and sustain the board's reengagement with wellness and alternative-discipline programs such as the Health Professional Service Program (HPSP). The board said reengaging HPSP and continued funding for the Oregon Wellness Program would cost approximately $1.2 million and $500,000 per biennium, respectively.

The subcommittee opened the public hearing, received the presentation and public testimony, and then closed the hearing. No committee action or vote on the bill occurred during the Feb. 25 meeting.

The subcommittee noted upcoming budget hearings for other state boards and adjourned.