Oregon lawmakers have unveiled a budget bill that would continue to funnel vast sums of money toward homeless shelters statewide while slashing funds for preventing evictions.

Democrats advanced the bill through a legislative subcommittee on a 5-2 party-line vote Tuesday, sending it to leaders on the Joint Committee on Ways and Means, who write the state’s budget.

Under Gov. Tina Kotek, Oregon has invested billions of dollars toward housing and homelessness in recent years, but the state continues to struggle with rising homelessness, evictions and a shortage of affordable housing.

Now, through House Bill 5011, the state’s Housing and Community Services Department would see its two-year budget reduced by roughly $1 billion to more than $2.6 billion starting July 1.

“The state has fewer resources than was anticipated when the Governor released her recommended budget in December, and she has appreciated that legislators have difficult decisions to make,” Roxy Mayer, Kotek’s press secretary, said in a statement Wednesday.

Funds to prevent eviction would see the biggest hit. The latest budget bill allocates $33.6 million toward programs like rental assistance or legal services that intend to keep Oregonians from becoming homeless in the first place.

That’s almost $100 million less than what was allocated in the current budget. For the upcoming biennium, Kotek had asked for $173.2 million to keep those programs running.

The latest budget proposal has enough money to serve about 4,300 households facing eviction, compared to more than 27,700 in the budget lawmakers passed in 2023, according to the nonprofit Oregon Law Center.

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The budget would also allocate $50.3 million toward helping Oregonians transition from homelessness to stable housing (Kotek had asked for $188.2 million), and $87.4 million for long-term rental assistance (Kotek’s request: $105.2 million). The governor is reviewing the budget, Mayer said.

“The Governor expects to be disappointed and hopes there will be additional investments in homelessness and housing in the end-of-session bill,” said Mayer.

The bill comes as the Legislature has $500 million less in revenue than formerly predicted for the state’s next budget, largely due to ongoing trade tensions and slow economic growth.

With only a few weeks left in this year’s legislative session, lawmakers are weighing a variety of competing priorities, such as Kotek’s proposal to dedicate hundreds of millions of dollars toward Oregon’s education and behavioral health systems.

In a statement Tuesday night, Democrats described the bill as “an ambitious plan to expand affordable housing, reduce homelessness, and protect vulnerable families.”

“This budget should serve as a clear sign to all Oregonians that housing remains a statewide priority, even amid federal uncertainty and economic strain,” Sen. Mark Meek, D-Gladstone, the co-chair of the Subcommittee on Transportation and Economic Development, which advanced the budget.

“We’ve made real progress, but we know that we must continue building on the work we’ve done until we solve this crisis.”

But on Tuesday, some committee members voiced concern that the state has been too slow to dole out funds through its housing programs — including for wildfire survivors — and they say regulations have stymied housing production.

“It feels like we should be seeing a lot more results for the dollars we’re investing, and I think there is ongoing frustration with Oregonians that we aren’t,” said Rep. Jami Cate, R-Lebanon, who voted against advancing the bill out of committee. “It seems that often the problem is growing.”

The bill comes as eviction filings last year surged to record highs — 27,290 cases total — and homelessness increased. Meanwhile, local governments issued fewer housing permits for the second consecutive year, falling to the lowest level in 12 years.

Rep. David Gomberg, D-Otis, co-chair of the Subcommittee on Transportation and Economic Development, said Tuesday that he pressed the state housing department for progress updates in recent months.

“The answer we’ve consistently received is that there was a big program and it took them a while to stand it up and to begin to get things moving.

“So I’m looking forward to success,” he said. “I also want to note that the budget we’re approving today is a far cry from what was requested by the governor.”

Oregon governor’s $217M homeless shelter bill faces uncertain future as budget woes mount

Housing and tenant advocates fear that backing off investments for eviction prevention could propel more people into homelessness, as many Oregonians face a shortage of housing and costs that have exceeded their wages.

“We understand that it’s a tough budget environment,” Sybil Hebb, the director of legislative advocacy for the Oregon Law Center, told OPB Wednesday. “But I think we were shocked and really devastated to see the proposed severity of the cuts.”

Hebb says that investing in eviction prevention is the best way to decrease costs on the social safety net by keeping people from being trapped in the cycle of homelessness.

“People are living very close to the bone these days, and housing is extremely expensive,” said Hebb.

She added: “Any unexpected expense or unplanned illness can put people temporarily upside down. These are dollars and resources and services that help people through that immediate crisis to make sure that it doesn’t turn into a long term.”

Despite recent concerns that the state might step back its role in funding shelters, the budget would allocate nearly $205 million to support homeless and emergency shelters. Kotek had asked for more than $217 million.

“Shelter dollars in the bill will help our local partners keep their doors open and beds available,” Rep. Pam Marsh, D-Ashland, chair of the House Committee on Housing and Homelessness, said in a statement Wednesday.

“That’s essential, because our shelters are the entry point to the continuum of services that enable individuals to regain stability and find permanent housing.”

The budget would also dedicate $10 million toward housing programs for Oregon’s nine federally recognized tribes.