Media Room


Good morning. Thank you for joining me today for the release of my proposed budget.

I believe in a thriving Oregon; one that is resilient and sustains the well-being of current and future generations; where all Oregonians have opportunities to reach their full potential.

Achieving this vision requires healthy families and safe communities.

It calls for careful stewardship of our natural resources to preserve the beauty and bounty of Oregon for generations to come.

It relies on a seamless system of education from cradle to career, and a thriving economy in every corner of the state.

To achieve this, my budget recognizes that:

•    We must continue investing in education to improve our high school graduation rate;

•    We must keep expanding health care coverage until every Oregonian is covered;

•    We must make long-overdue investments in our roads, bridges, and public transit to enhance seismic safety, reduce traffic congestion, and keep local economies humming.  Addressing our transportation needs will also create family wage jobs throughout the state;

•    We must protect kids and vulnerable Oregonians and make sure our families have access to affordable, stable housing; and

•    We must make sure Oregonians have clean air and water, and our communities are safe and resilient.

These commitments are foundational to Oregon’s future.

And that’s why I have been such a strong supporter of revenue reform – so we could finally align state resources with these worthy aspirations.

Although I was able to protect key program areas that lift up struggling families, the budget includes significant cuts at a level I find totally unacceptable.

This budget is a short-term solution, nothing more. It represents the beginning of a conversation, not the end – the conversation about who we are as a state; where we want to go, and what we’re willing to do to get there.

State needs are growing, but state resources are not keeping pace with the need. And when there are difficult decisions to be made, it’s best to rely on one’s principles – change your leaves, not your roots.

So my budget is rooted in three principles:

Number one: protect programs that serve children and support families working to make ends meet.

Number two: prioritize programs that deliver the best long-term benefit, particularly for underserved communities, including rural areas, low income people, and communities of color.

And number three: identify and expand programs that leverage outside funding sources and deliver the best bang for the buck.

In this budget, I prioritize investments in people – investments such as health care, housing, education, and job creation – that empower Oregonians and support their quality of life.

I focus on those who have been historically underserved or whom the economic recovery has left behind.

I had to make some very difficult decisions in order to protect the core programs that make a difference in the lives of Oregonians.

Let me start with education.

In 2015, we made important – even historic – investments to build a seamless system of education from cradle to career. 

Today, even in the face of fewer resources, my vision and priority for education is just as clear; and the needs of our most vulnerable children and their families just as urgent: Every student ought to be ready for kindergarten, stay on track, and graduate prepared to succeed in a global economy.  

We must increase the number of students graduating high school with a plan for their future. 

  • My budget puts students first at every stage of learning, by:
  • Investing a record-breaking $8.6 billion [State School Fund = $8 billion] in early childhood education and our public schools; and
  • Protecting the significant investment we made in 2015 to make higher education more accessible and affordable.
  • My budget also advances equity of opportunity, especially for our most vulnerable students, in five key areas.
  • First, starting early to close gaps in opportunity starting at birth; and maintaining high-quality childcare and preschool options;
  • Second, replicating what works by targeting resources to expand and scale best practices that support students most at risk of not graduating from high school;
  • Third, expanding hands-on learning, like CTE and STEAM, to connect students to careers; and
  • Fourth, supporting excellent teaching at all ages and stages of learning;
  • Fifth, ensuring more students can access and afford a college degree. My budget extends the Oregon Promise program to an additional cohort of new high school graduates, reducing the cost to as little as $50 per semester for eligible students.

Also, in 2015, we expanded Oregon Opportunity grants to serve an additional 16,000 students. In this budget, I increase funding to help another 5,000 students pay for their college educations (for a total of 85,000 students – a little more than half of those eligible).

Unfortunately, the increase in student financial aid meant saying no to funding increases for community colleges and public universities. My budget allocates to higher education the same amount as they received in the last Legislatively Approved Budget.

However, my budget makes a historic investment in higher education capital projects with one-time funding of about $350 million, a significant increase.    

Also, in response to recommendations from my Campus Safety Work Group that I formed after the tragic shooting at Umpqua Community College, I have allocated $15 million in bonding to help colleges and universities fund critical campus safety improvements.

Health is fundamental to the well-being and self-sufficiency of every Oregonian.

Over the past 24 months, Oregon has expanded health care coverage to 95 percent of adults and 98 percent of children.

And we’re not going to stop until every Oregonian has health coverage.

My budget protects funding for the Oregon Health Plan without reducing eligibility or the level of services covered. In my prior experience as a legislator, we had to choose between reducing the number of people we could afford to cover and the level of coverage, and I am absolutely unwilling to do that.

I am also investing additional funds to expand health insurance coverage for every Oregon child. Our children deserve nothing less.

We know that healthy children are more likely to do well in school, while healthy adults are able to work and provide for themselves and their families.

A roof over one’s head is also fundamental to a child’s readiness to learn and an adult’s ability to get and keep a job.

Oregon faces a housing crisis, with many communities throughout the state struggling to address the lack of affordable housing. Homelessness is pervasive, with an estimated 21,000 homeless children in our K-12 schools. 

Building on the investments we made last session, I have included another $70 million to develop an additional 1500 units to upgrade our housing capacity statewide, and $300 million in bonding to assist with loans for first-time homebuyers.

The 2016 Count Her In report revealed an insidious truth: One in three Oregon women will be subjected to domestic violence. In 2015 alone, our state could not meet the needs of more than 10,000 survivors of domestic violence – including children – seeking safe shelter from abuse. We must not leave survivors of domestic violence out in the cold. So I also have set aside $2.5 million to evaluate and expand our capacity to address this critical need.

Investing in fundamentals such as housing, health care and education are essential to self-sufficiency. These investments also help make sure opportunities to thrive are available to people from underserved communities, such as Oregon’s rural economies.

The economic recovery has left many of these communities behind; they are struggling to create opportunities for family-wage jobs.

My budget makes several strategic investments in critical infrastructure projects that also will create jobs in rural Oregon.

First, let’s talk about transportation. Separate from the budget process, I have been working with legislators and community leaders on transportation legislation for the 2017 session.  The economic benefits of a transportation package are threefold: Not only will we get the seismic and safety upgrades our roads and bridges need, we will get goods to market and workers to their jobs more efficiently; plus, transportation investments create good jobs for Oregonians in every single corner of the state. 

Additionally, my budget includes $32 million in bond funding for grants for water projects to meet the needs of rural communities, agriculture, and the environment.

My budget also authorizes $10 million in bonding for projects to upgrade nine fish hatcheries. This will create short-term construction jobs and preserve long-term hatchery jobs in rural Oregon.

Another $4.4 million will accelerate the pace, scale and quality of restoration on our federal forests.

In recent years, this effort led to a 16 percent increase in restoration-related jobs and a 14 percent increase in federal timber harvest across eastern Oregon. Under my budget, we will continue to create jobs in our timber communities.

As an aside: I am very concerned about the health and future of public lands, in particular, the fate of the Elliott Forest. I appreciate the Elliott Forest proposal from Lone Rock Resources, Cow Creek Band of Umpqua Tribe, Confederated Tribes of Coos-Lower Umpqua-Siuslaw, and the Conservation Fund.

Their proposal noted that they invite additional partners. In response to that overture, I am actively looking to the State’s bonding capacity as way for the State to participate in a purchase agreement that maximizes public benefit. I look forward to discussing all available options with them and the Land Board at our upcoming meeting.

And in the Portland-metropolitan area, there is $10 million in bond funding to jump-start the cleanup of Portland Harbor. This also supports restoration of family-wage jobs in one of the biggest urban employment centers in the state.

Nearly 30,000 jobs are directly created by the firms located within Portland Harbor, and those jobs in turn generate $1.5 billion of direct wage and salary income.

Education, health care, and jobs – these are the essential investments state government can make to open the doors of opportunity and prosperity for all Oregonians.

Reduced federal funding and increases in the cost of state services resulted in a $1.4 billion projected budget shortfall.

Plus, after the 2016 general election, three ballot measures passed that specified and redirected state spending, increasing the budget shortfall to $1.7 billion.

When household resources are tight, Oregon families work hard to live within their means. They sit down at their kitchen tables and find ways to cut expenses and tighten belts. State government needs to step up and do the same. That’s why I am calling on state managers to take specific actions to save money, such as delaying the filling of vacant positions, and eliminating non-essential travel.

Since becoming governor, I have noted that agency managers consistently work to improve business practices and operate more efficiently and at less cost.

For example:

  • Staff at the Department of Administrative Services renegotiated lease agreements, saving nearly $64 million dollars in rent over the course of the leases.
  • The Department of Oregon State Police revamped its training programs, reducing injuries and related costs by as much as 35 percent.
  • Many agencies routinely use webinars and other video conferencing to reduce mileage reimbursement costs.

There is still more we can do, and our public employees continue to be the best source of efficiencies and cost-saving ideas. I am grateful for their commitment to giving Oregon the best return on their taxpayer dollar.

As I said previously, the balanced budget I propose today is a short-term solution. It closes the budget gap, through a combination of budget cuts and new revenue.

The new revenue includes increases in tobacco taxes, hospital and insurance company assessments to help pay for health care, and fills other gaps by closing loopholes in the tax code.

Balancing the budget with program cuts alone would mean taking health coverage away from thousands of Oregonians.

It would mean some families would not have access to preschool or early childhood education opportunities that support student success. It would mean no more Oregon Promise.

These are not cuts I am willing to make.

Even with these revenue increases, this budget still contains major program cuts – painful cuts – to higher education, natural resources agencies, and programs for vulnerable populations. This is both unavoidable and unacceptable.

I am, however, presenting this budget as the starting place for a broader conversation with Oregonians and legislators about how best to align our resources with our shared values and our vision for moving Oregon forward.

I believe the times in which we live always present both challenges and opportunities, including the opportunity to shape this time in our history to reflect our hopes for the future, and our faith in the Oregon Way of coming together to solve problems.

Thank you.  I’d be happy to take a few questions.