The Oregon Legislature has requested 5% budget reduction scenarios from state agencies to address projected revenue shortfalls. This is an exercise done every cycle, but with HR 1 fully in place these cuts are more possible than ever. While these are proposals—not final decisions—the timeline is tight and impacts are significant. This analysis highlights the major cuts affecting education members but is not exhaustive; the complete agency submissions contain numerous additional program reductions and service cuts. Through coordinated advocacy, we can scale back the most harmful elements during the 2026 legislative session.
Implementation Timeline: Year One (2025-26) is the current school year with initial reductions. Year Two (2026-27) brings deeper cuts and complete program eliminations.
Oregon Department of Education: Major Program Impacts
Total ODE and SSF Impact: $748,498,581 in reductions fundamentally affecting all aspects of K-12 education.
Programs Funded in Year One, Eliminated in Year Two:
Programs with Graduated Reductions:
State School Fund: Foundation Funding Under Pressure
Total impact: $583,604,248 - a significant decrease in per-pupil funding affecting all districts.
| Funding Source | Budget Reduction |
| General Fund | $493,449,376 |
| Corporate Activity Tax | $41,989,783 |
| Lottery Fund | $30,325,084 |
| Other Funds | $2,207,891 |
Higher Education: Community College Crisis
Total HECC Impact: $151,265,880 in reductions fundamentally altering college accessibility.
Student Access Programs Eliminated in Year Two:
- Oregon Promise - no new awards for ~17,500 applicants from Class of 2026 ($13,000,000)
- Child Care Grant - no new awards for student parents ($1,000,000)
- Part-Time Faculty Health Insurance Fund - completely eliminated ($740,000)
Student Access Programs Eliminated in Year Two
Community College Support Fund: $20,947,567 cut (~10% of state funding by Year Two)
Expected impacts: Tuition increases up to 10%+, 200+ position eliminations, program closures (especially high-cost CTE), reduced student services, elimination of part-time faculty healthcare funding starting 2027-2029 biennium.
Career Pathways: $2,000,000 reduction affecting workforce training at all 17 community colleges.
Member Benefits: Direct Financial Impact
Oregon Educators Benefit Board (OEBB): $195,869,651 in cuts
- ~15% benefit reductions starting mid-year 2026
- Another ~15% reduction for 2027 plan year
- Impact: Higher premiums, reduced coverage, increased deductibles/out-of-pocket costs
Public Employees Retirement System (PERS): $11,099,456 in administrative reductions which delay modernization from mail-based to electronic processing.
Cumulative Impact
These reductions represent fundamental restructuring of Oregon's educational priorities. The elimination of specialized student support programs, combined with significant cuts to basic funding formulas, will particularly impact rural and underserved communities. The timing creates cliff effects where programs disappear entirely rather than scaling back gradually.
For community colleges, reduced state support plus eliminated access programs will make higher education less affordable when demographic trends already challenge enrollment. Health benefit reductions create immediate financial pressure on educator families, effectively reducing take-home pay through increased healthcare costs.
What's Next
These proposals will be debated in the 2026 session. Because Year One is already underway and major eliminations take effect in Year Two, early coordinated engagement is essential. These are starting points—we can scale back the most harmful elements together through strategic advocacy.
Source Documents Complete agency proposals available through Oregon Legislative Information System (OLIS):
