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Dear Partners,
I'm pleased to share that the Oregon Legislature has concluded its regular session and approved ODHS’ budget for the 2025–27 biennium. Thanks to many months of thoughtful collaboration with the Governor’s Office and Legislature, the agency’s approved budget includes $7.5 billion in General Fund dollars—a 23% increase over the previous biennium—along with 11,384 positions.
In a time of constrained state resources and uncertainty around key federal funding streams, this budget represents a significant accomplishment for our agency and the people we serve. Its investments will support the core needs across our programs, strengthen our operational foundations, and improve safety for our clients and staff. Together, the resources will help ensure we can continue delivering equitable and effective services to Oregon’s children, families, older adults, and people with disabilities.
General Fund investment highlights
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Focus on safety and oversight: A $2.8 million investment in Senate Bill (SB) 5526 will strengthen oversight capacity in the offices of Aging and People with Disabilities and Developmental Disabilities Services, allowing more timely inspection of newly licensed or newly purchased community-based care facilities. The budget also includes investments for Shared Services security contracts to improve the safety of staff and clients in our local offices, and for positions in Vocational Rehabilitation that will ensure effective administration of employment services contracts.
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Youth and family support: SB 5526 also makes meaningful investments in prevention and intervention services, including $19.7 million to sustain core services in the Youth Experiencing Homelessness Program and $7 million to continue implementation of the Family First Prevention Services Act, aimed at helping families avoid child welfare system involvement.
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Services for older adults and people with disabilities: The agency’s current service level (CSL) budget includes a $56.9 million increase to implement the Agency with Choice service model, which will expand options for consumers of in-home supports to direct their own care.
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Provider rates: To support continued access to quality care, the budget includes $75 million to increase Medicaid provider rates in the offices of Aging and People with Disabilities (APD) and Developmental Disabilities Services (ODDS), plus $2.5 million to increase payments for the Independent Living Program administered by Child Welfare. These increases are in addition the 6% Behavioral Rehabilitation Services (BRS) and 11.3% nursing facility increases included in the CSL.
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Shoring up operations: The budget includes several investments to strengthen operational infrastructure in the Oregon Eligibility Partnership, including $2.2 million for mainframe modernization and $4.5 million to continue leveraging national data services to efficiently process Oregonians’ benefit applications.
Additional budget direction
Alongside these investments, SB 5526 is associated with several budget notes related to provider rates and wages. One directs ODHS to collect and analyze wage data from assisted living, residential care, memory care, adult foster home, and in-home care providers serving Medicaid beneficiaries, and to report findings to the Legislature by spring 2027. Two additional notes direct the agency to implement restructured rate methodologies for payments to adult foster home and residential care facility providers.
House Bill (HB) 5006, an omnibus bill passed near the session’s end, also includes a budget note pertaining to ODHS. Aimed at ensuring Medicaid compliance for the Stabilization and Crisis Unit (SACU), the note directs the agency to develop a plan in partnership with community for returning SACU to its original purpose as a short-term crisis stabilization setting.
Closing thoughts
We will continue to analyze the impacts of the recently passed federal budget bill and will communicate our findings in the coming days and weeks. However, the state budget is a strong vote of confidence by our local leaders in ODHS, our mission, and the thousands of staff members whose daily efforts turn legislative investments into real results for the people we serve. In a time of limited resources and competing priorities, these investments unequivocally affirm the value of this work and recognize the difference you are making for Oregon’s children, families, older adults, people with disabilities, and Federally Recognized Tribes. I’m deeply grateful for your continued commitment, and I look forward to all the ways your care, creativity, and collaboration will bring these investments to life in the biennium ahead.
In appreciation,
Fariborz Pakseresht, Director
Oregon Department of Human Services
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