Shrinking State Revenue Spells Belt Tightening Ahead – an Interview with State Rep. David Gomberg

By Brian Bahouth

Listen – 8:16

The Oregon state budget has ebbed and flowed over time, but every two-year budget since 1985, except one, has increased in size. But now, while the costs of operating the state government continue to increase, revenue is declining. The Oregon state budget is at a rare inflection point. 

In his most recent newsletter, State Representative David Gomberg cites an Office of Economic Analysis revenue projection that shows General Fund revenue—that is, money from income and corporate taxes—is flattening. Adding to the anxiety, state lawmakers are increasingly worried about a potentially sudden loss or reduction of federal dollars.

“In the most simple terms, the Oregon economy is flattening out,” Gomberg told me by phone. “You can point to the on-again, off-again tariffs, you can point to federal layoffs, but the number of people working in Oregon is declining, and because fewer people are working, fewer people are paying taxes.

“At the same time, Oregon does not have a sales tax. It relies on the income tax for our state revenues. So because changes have been made in the federal tax code that reduce taxes for some Oregonians, we’re going to be receiving less money in revenues from the people who are working. The Legislative Revenue Office says that’s going to be roughly a billion dollars by the time this tax cycle is over with.”

The current legislatively approved budget runs through June 30, 2027. Oregon lawmakers will meet for a five-week interim session beginning on February 1, 2026, to decide how to trim $1 billion from a $140 billion two-year budget. 

Besides fewer people working, and some of those people paying less in taxes, “the third thing that’s going on,” Gomberg explained, “is the federal government is cutting back on a number of programs that Oregonians rely on, and we’re faced with the daunting challenge of whether or not we want to try and backfill things like health care or food supports or education. All of those things combined means that it’s going to be a really, really tough budget cycle.”

Budgeting is central to the legislative function. Gomberg offered an overview of the budgeting process.  

“In Oregon, we start with what we call the current service level. What are we paying for right now? And do we want to keep doing that? And so we open up a budget. We say, Here’s what this program cost us last year. Here’s how much we think it’s going to cost this year. And if we’ve got the money, do we want to keep doing all of the things that are in this budget.”

The task of cutting state spending invariably leads to difficult choices. Gomberg explained, “I chaired the committee that handles the housing budget, and we only had a limited number of dollars, and we had to make a decision on whether we spend money helping people avoid evictions, or whether we put that money into emergency housing and shelters. So we had to decide whether we got people off the streets during dangerous weather, or whether we helped people stay in the houses that they were currently in. 

“That’s an impossible choice, but we had to make it,” Gomberg concluded. “Ultimately, in this case, we invested in emergency housing and shelters.”

When faced with the need to cut state spending, some Republican lawmakers have advocated for a zero-based budgeting system that would rebuild the entire budget from scratch every two years. Representative Gomberg said zero-based budgeting might help control spending but is inefficient and impractical in practice.  

“The trouble is that the Department of Transportation or Housing or Business Oregon will come in front of my subcommittee for maybe four days of budgeting, and that means four, two-hour hearings. That’s not a whole lot of time to start over every single cycle.

“Imagine if I came to you and said, ‘Take a look at your household budget, and each January I want you to sit down and decide what company you’re going to use for your homeowner’s insurance. You’re going to remortgage your house, and I want you to cancel all your credit cards and start over again and decide which accounts you’re going to set up each year for the different services that you receive.’ 

“That might save you money if you reevaluated each of those programs every year, but it’s a daunting and time-consuming process.”

No matter the system or rationale for cutting state spending, it is never easy. A decline in General Fund revenue is a growing concern, but Gomberg said the potential for federal spending cuts has cast a pall over the Capitol.

“That’s the dark cloud on the horizon, what’s going on with the federal government. Will they continue to send the dollars they have, and will they continue to fund the programs in Oregon that they are funding? 

“Here on the coast, when we think about federal funding, the first thing that comes to mind for me is NOAA [the National Oceanic and Atmospheric Administration]. We brought NOAA to Newport a few years ago. We’ve been concerned about keeping them in Newport. Now we’re concerned about whether we’re going to be able to keep NOAA at all and the vital services that they provide for weather forecasting and ocean science and climate change

“Goodness, you don’t want to be a fisherman in Newport without NOAA to tell you what the weather is going to be looking like when you’re ready to come back into port at the end of the day. 

“So if the federal government doesn’t invest in those kinds of programs, does Oregon have the money to fill the gaps? Part of it is what the federal government is paying for in our own Oregon budget. The other thing is what the federal government is paying for outside our Oregon budget, and whether we need to find a way to backfill it if they decide they’re going to bail on us.”

When the time comes to trim budgets in February, Gomberg said he’s focused on defending the interests of his district, regardless of the political affiliation of constituents or coastal neighbors.

“Years ago, the legislators who represent coastal districts decided to band together and create something we call the Coastal Caucus. It’s senators and representatives, Democrats and Republicans, focusing on geography more than we do on partisanship, and they provide a model of legislators of different parties and different chambers working together for the common good. 

“And so I’m going to go to work on trying to get funding for the Port of Coos Bay, and when the time comes, I’m hopeful that I can rely on the legislators from Coos Bay to help me get money for a dam in Newport. 

“Those are the kinds of back-and-forth challenges that we face. And by banding together, working together, focusing on common needs and common goals, we can accomplish more than we can just working alone.”

Gomberg acknowledges that some constituents are for cutting state spending, and others will be upset if programs they use or favor are cut. But in the end, defending programs in his district depends on Gomberg’s ability to influence Democratic Party leadership budget decisions and to win votes taken in the House and Senate.

“As a rural legislator with a large district, I’m always on guard to try and protect the things that are unique to this part of Oregon. Most of the votes in the legislature come from the I-5 corridor, from Portland, from Salem, from Eugene. Here in Lincoln County, we’ve got two votes, one in the Senate, one in the House, so that puts a lot of responsibility on the shoulders of those of us that are representing this district to protect programs that are critically and uniquely important here. Let me tell you, Portland doesn’t care about tide gates.”

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