Deschutes County review of 2025 legislative session highlights transportation funding failures, Medicaid and wildfire risks

Doug Riggs, speaking on behalf of Deschutes County, told the Deschutes County Board of Commissioners on Monday, Aug. 4, that the 2025 Oregon legislative session produced mixed results for county priorities and left several major issues unresolved.

Riggs said the session’s dominant theme was a focus on “current service level,” meaning most committees favored status quo spending rather than new reforms. “The theme of this session was what they called current services level. Current service level basically means status quo,” he said. He warned the board that unresolved federal and state questions could reduce revenue available to counties.

Why it matters: County staff and commissioners said the session’s outcomes could materially affect county roads, behavioral-health services and wildfire response budgets. Riggs highlighted two near-term fiscal risks: a possible reduction in the enhanced Medicaid match and uncertainty about the scope of the hospital provider tax, both of which could reduce state funding available to counties.

Most prominent among the session’s failures, county officials said, was a transportation package that collapsed in the final days of the session. Riggs described long negotiations that fell apart after late changes related to tolling authority and labor rules. He told the board the package would likely be revisited in a special session called by the governor; he said a special session was likely and mentioned an August 29 convening. "There will be a special session on August 29," Riggs said.

County impacts and funding wins - Transportation: County staff described a proposed package that would have raised the gas tax, increased registration fees (including an EV surcharge), and added new revenue to the State Highway Fund and transit. Riggs estimated Deschutes County’s share under one proposal at about $5.6 million annually (roughly a 25% increase over current funding), but he emphasized the package stalled and may be significantly altered before any vote. - Wildfire: The legislature allocated wildfire suppression money largely as a special purpose appropriation (SPA) to be distributed by the emergency board; the funds are general fund dollars. Riggs said that approach should ensure available funds to pay contractors this season, but it did not achieve a longer-term change to reduce dependence on the general fund for suppression costs. - Behavioral health and housing: Riggs listed several regional wins: funding for a children’s psychiatric facility (he identified a $3 million allocation for the county’s residential children’s psychiatric facility), behavioral-health housing funds and housing infrastructure pots that state agencies must allocate. He noted that many behavioral-health housing funds will be distributed by the Oregon Health Authority (OHA) via an allocation process staff will need to monitor. - Shelter funding: Riggs said the board believes the legislature provided roughly $205 million for homeless shelter funding in the biennium, though implementation details remain to be clarified. - Water: Senate Bill 1154 passed and will affect parts of south county; a related measure (SB 1153), which would have required more public notice for some simple water transfers and other changes, did not pass.

Shortfalls and concerns County leaders flagged significant items that failed or were only partially funded: community corrections funding (counties saw no new funding for the costs study and related items), several reform bills that aimed to address systemic problems, and a narrowly passed unemployment insurance bill (SB 916) that reduced the number of eligible weeks from 26 to 10 before final passage. Riggs said counties are likely to face layoffs in programs tied to community corrections and other locally delivered services because of those gaps.

On transportation policy, Riggs and staff emphasized political and structural obstacles: disagreements over project labor agreements, tolling authority retained by the Oregon Department of Transportation (ODOT), and large amounts of existing debt service tied to earlier capital packages. "A lot of the things that people are unhappy about... stem back to House Bill 2017," he said, referencing the 2017 transportation package and its long-term effects on operations, maintenance and debt service.

Next steps and oversight Riggs urged commissioners to remain engaged with the county’s legislative delegation and with state rulemaking processes. He recommended the board track OHA’s distribution plan for behavioral-health residential funds and to prepare concepts for the limited short-session bill space; bill filing deadlines and short-session constraints were discussed as the board planned further work sessions.

Ending: County staff said they will return to the board with additional details and recommended actions for the special session and for the February short session, and they urged commissioners to keep engaging directly with legislators and agency staff as rulemaking and allocations are developed.