Trump Tax Cuts Push Oregon Into $888M Budget Deficit

Oregon's budget projections for the 2025-27 biennium have worsened significantly due to President Donald Trump's tax and spending policies, specifically the Republican tax cut law known as the "One Big Beautiful Bill" (H.R. 1). The state's previously expected $472 million positive general fund balance is now forecasted to be a $373 million deficit, as the bill is projected to reduce Oregon's revenue by approximately $888 million. Oregon relies on federal taxable income to calculate state taxes, so changes in federal tax law, including new deductions like the $12,500 deduction for overtime pay, directly reduce state revenue. Additionally, Oregon faces an estimated $15 billion shortfall in federal funding for health insurance, food benefits, and other programs due to federal budget cuts. State economists also warn of an increased recession risk and slowing economic growth exacerbated by Trump's tariffs, which have led to significant job losses in key sectors such as manufacturing and trade. Lawmakers are considering options such as spending cuts or decoupling from the federal tax code to address the budget shortfall.