County Weighs Which Services It Can Afford

The American public is telling pollsters they’re worried about the cost of living and personal expenses. In an extraordinary work session held on December 16, Lane County officials came face-to-face with a projected $5 million deficit that will have real world impacts.

County Administrator Steve Mokrohisky said the county is facing financial pressures driven by three compounding factors: Oregon’s property tax system (which limits annual growth to about 3 to 3.5 percent); significant reductions in federal and state funding (since 2022 following a decade of expansion in health and human services programs); and Lane County’s low permanent property tax rate of $1.28 per $1,000 of assessed value. By comparison, Jackson County’s rate is $2.01, Marion County’s exceeds $3, and Clackamas County’s reaches $3.70 when enhanced law enforcement rates are included.

Christine Moody, the county’s budget and financial planning manager, presented projections that showed the general fund could face a shortfall of up to $5 million in this year, before accounting for vacancy savings. She said the county operates 35 separate funds, but the general fund (largely supported by property taxes) is the county’s most flexible.

Roughly 74 percent of the general fund supports public safety, including the Sheriff’s Office, District Attorney, emergency management and youth services.

General government accounts for 13 percent, central services 8 percent, with smaller shares devoted to public health and welfare. Moody said that despite being called “discretionary,” about 97 percent of general fund spending is tied to state mandates or legal requirements.

Public safety alone accounts for $52.9 million of the discretionary general fund, Moody said. General government services like assessment and taxation as well as elections and recording total nearly $2 million. Public health and welfare services expenditures amount to about $5.5 million.

Moody told commissioners an across-the-board cut of 6.67 percent would reduce 911 funding by $1 million, jail operations by $783,000 and criminal prosecution by $669,000. Exempting public safety from cuts would force other departments to absorb reductions of more than 25 percent, including a $1.9 million hit to assessment and taxation and $737,000 to human services. Even if central services were eliminated, it would still leave the county $1 million short of balancing the budget, she said.

Funding uncertainty continues to ripple through her department according to Health and Human Services director Eve Gray. She said community health centers are seeing flat revenues at the same time expenses climb. Upcoming changes to coordinated care organization contracts and potential Medicaid work requirements beginning in 2027 add further risk Gray said. A federal Housing and Urban Development notice tied to continuum-of-care funding was recently pulled, creating the possibility of millions of dollars in lost revenue. She went on to note that public health has already eliminated positions, and developmental disability services are awaiting guidance on potential Medicaid restructuring.

Community Justice and Rehabilitation Services Director Greg Rikhoff, speaking remotely, said his department has lost four positions due to state funding cuts. As a result, about 400 individuals who should be under supervision are not being monitored.Rikhoff added that Oregon continues to fund counties at “minimum levels” to avoid returning services to state control.

Assessor Mary Vuksich-Shafer highlighted the impact of unfunded mandates. House Bill 3940 requires manual re-evaluation of more than 15,000 property accounts she said. Impacts would include changes in fire patrol assessments, adding an estimated 6,000 to 7,000 hours of work without additional funding for the county’s 25 rural fire protection districts.

Mokrohisky said the county has already taken numerous cost-saving steps, including restructuring health insurance, budgeting for position vacancies, paying down debt and investing in infrastructure projects that reduce long-term costs. A “financial exploration team” now meets weekly to examine additional revenue options and operational efficiencies. Changes may be coming for transient lodging tax allocations to internal service delivery models, Mokrohisky said.

Board chairman Pat Farr stressed the need for community input, suggesting surveys to identify the services people value the most. He questioned whether the county could refuse to implement unfunded state mandates and hoped that increased timber revenues could offer some relief.

East Lane commissioner Heather Buch voiced questioned whether voters would support new taxes amid widespread tax fatigue. Commissioner Laurie Trieger stressed the importance of preserving service capacity so the county can recover when revenues improve. Commissioner Ryan Ceniga said across-the-board cuts are unrealistic, particularly given the already high combined city and county tax burden paid by Eugene residents.

Further budget discussions are scheduled in the coming weeks, including a legislative committee meeting on January 9, and a leadership team kickoff set for January 15. Formal Budget Committee meetings are expected to begin in May.