Oregon House chamber on June 26, 2025. Lawmakers in during the February 2026 session will consider more than 250 proposals and, most urgently, find ways to balance the state budget. (Photo by Laura Tesler/Oregon Capital Chronicle)
Ninety lawmakers from across Oregon will gather today at the State Capitol in Salem to tackle a host of urgent issues, including balancing the state’s budget amid a looming deficit, keeping the state’s transportation department solvent, protecting Oregonians and immigrants from aggressive federal enforcement tactics and affordability.
The lawmakers — 30 senators and 60 representatives with Democratic majorities in both houses — have no more than 35 days during the short session to pass new laws. Each member is allowed to propose two bills, though each chamber and the committees within them can propose additional, joint legislation.
So far more than 260 bills have been posted to the Oregon Legislative Information System, and the session must end by March 8. Here’s a look at the biggest issues and proposals lawmakers will consider:
Balancing the state’s budget
The short sessions that take place during even years in Oregon — as opposed to the long sessions that take place over six months during odd years — are typically focused on balancing the state’s existing budget.
Making that work harder for lawmakers now is the massive tax and spending cut package that congressional Republicans and President Donald Trump passed during the summer. It includes income tax exemptions on tips and overtime, major tax write-offs on business investments and assets and trillions in spending cuts over the next decade to food and health insurance programs for low-income Americans, including billions for Oregonians.
And because Oregon’s state tax code automatically replicates changes to the federal tax code, lawmakers are expected to have $63 million less revenue to spend than expected on critical services over the next year and a half. That could change, however, depending on the upcoming state revenue forecast Oregon’s lead economists will unveil on Wednesday.
At a news conference leading up to the session, Democratic leaders in the House and Senate said they will consider ways to reduce current spending, potentially tap the state’s reserve funds and consider selectively disconnecting Oregon’s state tax code from the federal tax code.
“If a tax break is putting more money in working people’s pockets, then we can say ‘keep that,’” House Speaker Julie Fahey, D-Eugene, said about the selective disconnect, and preserving some tax changes such as keeping tips tax-free. “We want to make sure that our tax policy actually incentivizes economic growth, and is not just a giveaway to the corporations.”
Participate in the public hearing on Oregon’s budget:
Attend in person from 5 p.m. to 8 p.m. in public hearing room 40 at the Oregon Capitol in Salem or online here.Republicans asserted the state has enough money to execute its priority functions, and that legislators should be focused on reducing state spending, not on imposing or raising any taxes.
“State government should tighten its belt, the same way Oregon families have been forced to do over the last few years,” said Senate Minority Leader Bruce Starr, R-Dundee.
The Legislature’s Joint Committee on Ways and Means will hold a public hearing on Tuesday from 5 p.m. to 8 p.m. at the Capitol to get feedback from Oregonians on budget reduction options.
Protecting immigrants
Both Democratic and Republican lawmakers said they’ve heard from constituents fearful and angry about recent federal immigration enforcement actions. though House Republican Leader Lucetta Elmer, R-McMinnville, blamed Oregon’s sanctuary laws and news reports as flaming tensions.
House Majority Leader Ben Bowman, D-Tigard, shot back that “the fear is real,” referring to the growing number of children and U.S. citizens who have been swept up in immigration enforcement actions in Oregon and nationwide. Those include a high schooler in Elmer’s district and a 7-year-old in Portland, along with her parents, who were seeking emergency medical care for their daughter.
“What we’re seeing is madness,” Bowman said. “I think the proposals you’ll see in Oregon will be effective, they’ll be constitutional and we’ll do what we can to protect Oregonians.”
The Democrats’ “immigration justice package” includes bills that would allow Oregonians to sue individual federal agents for constitutional rights violations, protect the data privacy rights of immigrants in Oregon and require schools notify parents when there’s Immigration and Customs Enforcement, or ICE, activity on or near campus.
Other bills meant to bring more transparency to federal immigration operations would limit masking by law enforcement and standardize identification for all law enforcement in Oregon. Another proposal would put guardrails on federal agencies’ use of license plate reader data collected by local law enforcement.
A proposal from Rep. Willy Chotzen, D-Portland, would allow the state to withhold tax payments to the federal government, if the federal government unlawfully withholds funds from the state. It comes in light of recent threats from Trump and his administration to withhold federal dollars from Oregon and other Democratic states’ for enforcing sanctuary laws.
Transportation funding
Lawmakers will need to get creative and collaborative following a years-long saga to get sustainable revenue flowing to the Oregon Department of Transportation for critical infrastructure and safety upgrades, and to cover the agency’s $240 million budget hole.
Democrats in a special session in September passed a $4.3 billion, 10-year funding package that would increase gas and payroll taxes and vehicle license and registration fees, but that’s in limbo after Republican opponents gathered enough signatures to refer it to the ballot. Oregon voters will decide on the new taxes and fees during the May primary.
In the meantime, Gov. Tina Kotek called on lawmakers to reallocate existing money within the transportation department to cover its budget holes, staving off hundreds of layoffs. She said no money can be allocated from the general fund, and that long-term solutions to state transportation funding will need to be solved in 2027.
Affordability
Both Democrats and Republicans have introduced bills they believe will make living in Oregon, buying a home, finding a job and running a business more affordable and accessible.
Kotek is backing a bill in the House that would create a council to fast-track permitting for industrial sites and expand eligibility for the state’s enterprise zone program, a property tax subsidy to coproporations in exchange for the promise of economic development and jobs.
Another Kotek-backed proposal would create an exception to state land use and urban growth boundary laws that would make it easier for developers to site and build manufactured homes and mobile home parks for Oregonians 55 and older who meet low-income thresholds.
Other Democratic bills to address housing affordability are aimed at making it harder for multi-billion-dollar private equity firms to buy up Oregon homes, and eliminate the mortgage interest deduction on income taxes if the mortgage is for a vacation home.
To address housing affordability, Republicans are sponsoring a bill that would create a deferred loan program for closing costs for first time homebuyers, allowing the loan and interest to be paid off when the home is sold to the next buyer.
Other Republican proposals that lawmakers said would increase affordability would be to pause the Clean Fuels Program, which is a carbon tax on gas and fuels distributors in the state that some lawmakers said gets passed onto consumers. The program is part of state-mandated emissions reduction targets that fossil fuel providers reach to lower the intensity of their planet-warming pollution.
Another proposal would expand the types of schools, apprenticeships and training programs that Oregonians can pay for with federal Pell Grants available to low income students and students from low-income families.
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