Oregon lawmakers wrapped up an intense 2026 short session by passing a bill decoupling some state tax provisions from federal law.
Key focuses in the final days before Sunday's deadline included passing a "
The Senate and the House passed the omnibus budget rebalancing bills, which make changes to the $39 billion two-year budget bill approved eight months ago.
The changes account for revenue losses and added costs anticipated from the One Big Beautiful Bill Act
Oregon is one of the states where state income tax laws automatically replicate changes to federal tax law, but that will change somewhat with Senate Bill 1507, passed last week, which allows separations from federal code. If signed by Gov. Tina Kotek, it will restore $291 million in state tax revenue by removing tax cuts on businesses and the deduction for auto loan interest paid on new car purchases.
"Faced with a budget shortfall that was driven by President Donald Trump and congressional Republicans, leaders here in the Legislature prioritized steady, responsible governance, and I want to congratulate them on that," Kotek said during a Friday press conference.
The state had to close an up to $600 million budget hole, Kotek said. She had asked state agencies to compile 2.5% to 5% reduction lists, which were then provided to lawmakers, she said.
The disconnect bill helped avoid cuts to K-12 education, universities and community colleges, she said.
One segment of Senate Bill 5701, the omnibus budget rebalancing bill, that received bipartisan support was plans to allocate $2.1 million from bond proceeds to acquire 200 acres of the Abiqua Creek Area, including the 92-foot-tall Abiqua Falls, to retain public access.
Sen. Fred Girod, R-Silverton, who authored the bill to acquire the park, said he is following the example of the late Oregon Gov. Tom McCall, who championed public ownership of Oregon's beaches.
"Oregon is pledging that Abiqua Falls will continue to be protected and accessible for generations to come," Girod said.
The Abbey Foundation listed the property for sale in early February after more than 100 years of stewardship.
The Abiqua Falls acquisition is part of a larger
Discussions around approval of funding to support Moda Center arena renovations were heated.
"I don't want the Trail Blazers to leave, and until yesterday I thought I would be a 'yes' vote," said Rep. Farrah Chaichi, D-Beaverton, on the House floor Friday. "But when we are talking about education dollars vs. health, I can't support public dollars for a sports arena. I won't urge a 'no' vote, but I can't vote for this bill.
Other lawmakers expressed concern about approving the bill before negotiations were finalized with the team.
"We can't afford to lose the Trail Blazers. We can't be Seattle watching the Supersonics head to Oklahoma," said Majority Leader Ben Bowman, D-Tigard.
"People may not go to the Moda Center for healthcare, but it will keep food on the table for some Oregonians," Bowman said, referencing job losses that would result if the team skips town.
The measure passed the House on a 42-14 vote after passing the Senate.
Senate Bill 1601 transferred money from programs, including $27 million from the Safe Routes to School program, to support operations and maintenance at the Oregon Department of Transportation. It passed on a 26-2 vote.
Sen. Khanh Pham, D-Portland, said she was offering reluctant support for the bill, because of the failure to pass a more comprehensive transportation bill.
Lawmakers approved a comprehensive bill that included tax increases to prevent significant ODOT layoffs during a September
"Transportation advocates say this strips 60% of the funding to build sidewalks for children," Pham said on the floor Friday. "But I can't vote against this bill because it would render ODOT insolvent and it represents a bipartisan effort to cut now and figure out what programs we can salvage next year."
In addition to that cut, the measure also approved leaving 130 ODOT vacancies unfilled, Kotek said.
Sen. Christine Drazan, R-Canby, who announced in October she is running for governor against incumbent Kotek, rose in support of S.B. 1601, saying, "This is what it looks like to live within your means."
Kotek said: "It's not a long-term solution, but it does get the Oregon Department of Transportation through the end of next year, until we come up with some longer term funding solutions."
The cuts mean projects "that are important for safety" will not happen, Kotek said.
