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State lawmakers are in Salem today for the start of the 2026 Oregon Legislative Session.
In some years, it would mark the unveiling of ambitious new policy proposals and political agendas to shape Oregon’s future.
This won’t be one of those years.
With an urgent need to find $240 million in savings to avoid hundreds of layoffs within the Oregon Department of Transportation this year, on top of $900 million of additional cuts needed to balance the budget due to tax provisions in President Donald Trump’s tax-and-spending bill that passed last summer (the “One Big Beautiful Bill,”), the 35-day cap on even-year sessions means Oregon lawmakers will spend much of it trying to minimize the pain felt by residents.
Oregon House Speaker Julie Fahey, D-Eugene, has already given the public a preview of her agenda for the session. And on two major issues, taxes and immigration, we’re aligned with her:
Trump’s remaking of the federal tax code requires a response: Oregon lawmakers were wise last year to set aside more than $470 million from the state’s general fund to help buffer against expected losses stemming from the federal tax changes. But they’ll need to find hundreds of millions of dollars more in additional cuts to balance the budget by the March 8 end of the legislative session.
One way to offset the impact of federal tax policies? Decouple from the federal tax code. Oregon should follow in the footsteps of California, Colorado, Illinois, Michigan, Pennsylvania and Delaware, where lawmakers in each state took steps last year to prevent certain corporate and individual provisions of the tax changes from taking effect.
States frequently decouple from elements of the federal tax code — currently, about half of U.S. states automatically adjust their tax code to federal law, while the other half either set their tax code to mirror federal policy as of a certain past date, or just choose which federal provisions to follow.
The main downside of decoupling is more complexity for tax filers. Oregon lawmakers will need to hash out the details, but we view it as a reasonable tool for the state to maintain some control over its budget, by opting out of tax policies it doesn’t agree with — such as a 33% corporate tax deduction for certain types of income generated overseas, and limits on business interest expenses.
Protecting Oregon immigrants: Oregon and other Democratic-led states have been wrestling with how to push back against the Trump administration’s aggressive deportation policies. Some options being discussed, like legislation limiting when federal officers and other law enforcement can wear masks, feel like lawsuits waiting to happen.
The more enduring policies may be modest by comparison — like requiring school districts to notify a student’s parents or guardians about information information it provides to federal immigration officials.
We’re also interested in a possible mechanism for the state to withhold revenue it owes the federal government if federal officials illegally withhold funding for the state. Like many of the blue-state responses to Trump policies, the devil may be in the details. But we would consider it fighting fire with fire should the administration continue its attempts to withhold funding to sanctuary jurisdictions.
Housing and public safety: Despite the short clock on this year’s session, lawmakers can advance a few significant pieces of legislation with implications for Lane County residents.
A proposal backed by Gov. Tina Kotek would make it easier for cities to expand their urban growth boundaries for the purpose of creating manufactured home communities and senior housing. The state push comes as Congress debates legislation to repeal energy-efficiency standards for manufactured homes in an effort to make them more affordable. A double-edged sword, to be sure, but it has received bipartisan support. And in the midst of a generational housing crisis, these kinds of outside-the-box policy solutions should be embraced.
On the public safety front, we’re eager to see details of legislation being drafted by Sen. Floyd Prozanski, D-Eugene, which seeks to clarify who can access data collected by automated license-plate reader cameras. They’re the computer-controlled camera systems that sparked controversy in Eugene and Springfield last year, when concerns arose that the data collected by Flock cameras could potentially be accessed by federal agencies.
We previously called for Eugene, Springfield and Lane County leaders to cancel their contracts with Flock Safety over these data concerns, and applauded them for doing so a month later. Each time, we noted that these cameras hold good promise for local law enforcement, so long as Lane County residents don’t have to fear federal government intrusion for now and perhaps other “surveillance state” worries down the line. Prozanski’s bill could add crucial safeguards by requiring the data be encrypted, so only local law enforcement agencies got access.
Even after this year’s session, lawmakers will have to grapple with an estimated $15 billion in lost federal support in the next six years for Medicaid and the Supplemental Nutrition Assistance Program. A challenge of that scale will surely require some combination of painful cuts and creativity that only next year’s long legislative session can settle.
This year, Oregonians need our lawmakers to do as much as possible over the next five weeks to shield their constituents from the worst of the Trump administration’s overreach. We hope they’ll make good use of their time, and Lookout will track that progress.
