Oregon officials expect that President Donald Trump’s budget reconciliation bill will blow a $1 billion hole in the current state budget and could likely have a bigger impact — perhaps almost $6 billion — in the 2027-29 budget.
The bulk of those federal cuts will undermine food assistance for low-income Oregonians as well as their medical insurance benefits, according to a preliminary analysis the Department of Administrative Services released Monday.
The federal Supplemental Nutrition Assistance Program for Oregonians who need help affording food stands to deliver $1.7 billion less than previously planned through 2029, and the state’s Medicaid program is likely to see an almost $5 billion reduction in federal funds, according to the administrative services agency’s calculations. The Oregonian/OregonLive has reported extensively on the likely impacts to Oregonians on the state health plan, to hospitals and to other facets of the state health care system.
The Oregon Department of Transportation also expects to lose hundreds of millions in federal grants bookmarked for the Interstate 5 Rose Quarter Improvement Project.
State officials have warned that new federal requirements could strip coverage from hundreds of thousands of Oregonians, particularly those unable to meet stricter eligibility rules, particularly that they work, enroll in college or volunteer. Food banks will see an increase in demand for help, the state report predicts, the state library will likely need to cut employees and finishing the I-5 project to ease traffic flow could be “exceedingly difficult, if not impossible” without federal funds.
In a news release Monday, Gov. Tina Kotek said the cuts will cause “needless, callous hardship.”
“The Trump administration and Republicans in Congress have betrayed American children and families, who will become sicker, hungrier, and less prosperous because of President Trump’s budget bill,” Kotek wrote in a statement. “Oregonians will see less of their federal tax dollars coming back to our state for things they count on. Furthermore, President Trump and Congress knew that state governments cannot pay for this substantial gap in services but went ahead and did it anyway.”
The state projected the potential impact of the Trump cuts over three budget cycles could reach $15 billion, though it’s hard to predict how government spending could change before the end of fiscal year 2031. The 2026 midterm elections could bring change to Congress, as they often do following presidential elections, and Trump’s second term in office will end by 2029.
The Oregon State Police, Department of Forestry and Oregon State Library are other agencies likely to get hit by cuts, the state predicts.
The state police’s marine fisheries team could lose out on some $3 million by 2029, the Department of Forestry is likely to get up to $2 million less for urban forestry and the state library will likely see a $8 million reduction in federal funds, which will mean cuts to grants that support local literacy projects, the state says.
The final bill for the tax cuts could be more expensive. The preliminary Department of Administrative Services report doesn’t include the total cost of increasing staffing or technology systems to meet the administrative requirements in the federal law, which could be substantial. The Oregon Department of Human Services alone says it needs 600 more people to check more frequently whether Medicaid recipients still qualify for benefits, the report says.
Reporters Kristine de Leon and Carlos Fuentes contributed to this article.
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