County staff: state revenue forecast improved but significant gap remains for services
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Summary
County legislative staff told commissioners the 2026 short session opened fast and the new state revenue forecast shows roughly $300 million more than December's estimate, but staff said roughly $900 million in additional revenue is still needed to maintain existing services; commissioners discussed ballot timing for a repeal and potential tax-code 'disconnect' options.
County legislative staff briefed the Deschutes County Board of Commissioners that the state’s revised revenue forecast is better than the December estimate but does not close long-term gaps in public spending.
“They're now predicting that we'll end up with about $300,000,000 more in revenues than we expected at the end of last session,” said Doug, county legislative staff, summarizing the forecast and noting corporate capital gains largely produced the improvement. He cautioned that higher health-care and PERS costs, plus changes in federal benefit eligibility, leave an estimated funding shortfall of about $900,000,000 to sustain current services.
Commissioners asked whether the forecast assumed Oregon remains coupled to the federal tax code for the biennium; Doug confirmed the forecast assumes the state remains connected for the full biennium and noted proposals from committee chairs to “disconnect” several business depreciation items, a change expected to raise roughly $281,000,000 more if enacted.
The briefing also touched on transportation: staff said a voter referral stemming from a previous measure appears to require a ballot vote under a 1935 Attorney General opinion, and the practical question is whether a repeal referral will be placed on the May or November ballot. If moved to May, the accelerated timeline would require fast-tracking approvals and a governor’s signature by Feb. 25.
Why it matters: the revenue uptick reduces immediate pressure but does not eliminate a multi-hundred-million-dollar shortfall, leaving the legislature with hard choices on spending priorities during a compressed short session. The board asked staff to continue tracking proposals that could materially affect county programs and to report back as hearings and amendments emerge.
What’s next: staff will monitor bill amendments and committee action during the short session and return with updates to the commission.
