Lane County officials say state funding cut will force shelter closures, service reductions

Lane County health officials told the Board of County Commissioners on Sept. 23 that the state has sharply reduced emergency shelter funding allocated for fiscal 2026, a move that county staff said will force program cuts, layoffs and fewer shelter beds.

James Ewell, Homeless and Community Action Manager, said the county's emergency shelter system currently counts 924 beds — about 574 year-round beds and 358 additional inclement-weather/motel-voucher beds — that were supported in fiscal year 2025 by roughly $15 million in state —All In— and related operational funds. "We learned just within the last few weeks that the allotment that we are being offered this year is $7,600,000," Ewell told the commissioners, adding that the reduction will require "significant cuts" across providers and county staffing.

County leaders said the state has also changed how administrative dollars may be used: Oregon Housing and Community Services (OHS) is capping the allowable administrative share at 10 percent and directing that 8 percent go to contracted programs and 2 percent be retained by the county. Ewell said providers and county staff historically relied on higher admin allowances to cover back-office functions and contract support.

Why it matters: County staff warned the cut will reduce services that help people exit shelters into permanent housing. "They're really moving away from the housing focus support piece, and instead wanting those funds to go towards prioritizing maintaining beds," Ewell said. Without housing-focused case management and flexible funds, staff said, exits from shelter into housing will decline and average shelter stays will lengthen, which in turn reduces turnover and available beds.

Details and local effects

- Funding change and scale: Fiscal 2025 shelter, outreach and housing-access work in Lane County was funded at about $15 million. The county said the state allocation for the current fiscal year is $7.6 million.

- Programmatic impacts county staff identified include: elimination of training and capacity-building previously funded with the All In dollars; inability to fund any street-outreach teams with this state allocation; cuts to case manager full-time equivalents and flexible assistance used to overcome housing barriers; and reductions in county staff who administer shelter contracts.

- Contract and access changes: Ewell said the county has terminated its contract with the regional 2-1-1 operator that had provided a Lane County-specific access team and performed front-door assessments for coordinated entry. The county said losing that contract will make it harder for people, especially in rural parts of Lane County, to reach front-door assessment and housing resources.

- Immediate service reductions: Providers are revising budgets and identifying program pieces they can cut while trying to keep shelter doors open. Ewell said some providers have already identified closures that would reduce at least two shelters totaling about 14 beds. He cautioned that the full picture will not be clear until all revised provider budgets are submitted.

- Administrative cap: OHS's new admin cap (10 percent total, split 8/2 between contractors and county) will further reduce provider capacity to cover administrative functions. County presenters said that will increase pressure on nonprofits to fundraise to cover basic costs of doing business.

- One-time/local reserves: County staff said funds allocated to the navigation center through a FY2024 "Christmas tree" bill will need to be exhausted this fiscal year to keep the navigation center and other shelters open, removing that safety-net reserve.

State process, advocacy and next steps

County staff described several advocacy steps already taken with OHS and the governor's office after the allocation was announced. Ewell and the county director said they have pressed state officials to reconsider the allotment and continue to pursue conversations with OHS leadership.

County staff also explained a technical reason the allocation fell: OHS used a maintenance-of-effort document from May 2024 to calculate allocations and did not update that document after additional beds and contracts (including beds awarded later through a separate contract) increased Lane County's shelter total. Ewell and other staff said those later additions did not appear to have been folded into the base used to set the state allotment.

Looking toward fiscal 2027, presenters noted the state plans to move to a statewide shelter program with regional shelter coordinators and an RFP process; staff said $102 million will be available statewide in that later program.

Commissioner reaction and board direction

Members of the Board of County Commissioners pressed staff for clarification about timing, the maintenance-of-effort calculation and the administrative cap. Commissioners and staff described the change as abrupt; staff called it "unprecedented" that allocations were effectively finalized months into the current fiscal year.

County staff asked to postpone a planned October shelter-panel presentation until 2026 so providers can complete budget revisions and the board can consider year-to-date outcomes after the current adjustments. The board agreed to receive further updates and to continue advocacy with the state.

Votes at a glance: appointments and reappointments referenced in meeting record

- Order 25092307: Appointment of Avery Pearson (at-large) and Joaquin Alvarez (Homes for Good-affiliated) to the Poverty and Homelessness Board; passed (vote details not specified in the transcript).

- Reappointment to Planning Commission: Three planning commissioners were reappointed under order referenced as "2039" (transcript phrase); vote outcome reported as approved and placed on the board calendar (specific names and vote tallies not specified).

What county staff listed as next steps were continuing advocacy with OHS and the governor's office, collecting revised provider budgets, using one-time county/reserve funds to bridge gaps where possible, and returning to the board with updates once final provider budgets are received.