Employment Department warns of revenue shortfalls, urges state action to stabilize services

The Oregon Employment Department told the Transportation and Economic Development Subcommittee on Monday that projected declines in federal reimbursements and other revenues threaten its ability to maintain current customer service levels and staffing in the governor’s recommended budget for House Bill 5,007.

David Gerstenfeld, director of the Oregon Employment Department, said the agency has implemented major technology upgrades but now faces a funding gap that could force staffing cuts. “We provide economic stability to Oregon workers and to businesses,” Gerstenfeld said, adding that the agency needs resources to preserve service capacity and prepare for the next recession.

Why it matters: The department pays out the vast majority of its budget as direct benefit distributions; staff and operating funds are limited and often tied to federal reimbursement rules. Committee members were told that 84% of the department’s roughly $4.6 billion budget supports unemployment…