By GARY A. WARNER/Oregon Capital Bureau
More than $10 million for three Lincoln County construction projects could be funded under a proposal in Gov. Kate Brown’s 2021-23 budget to resurrect more than 30 projects that died last summer when the state bond market collapsed during the COVID-19 pandemic.
Brown’s budget proposal includes Oregon Lottery bonds set aside for $200 million worth of projects in nearly every corner of the state. These include:
- $4.1 million to help the city of Newport repair leaks and other issues at its two dams on Big Creek that are in danger of failing;
- $5 million for the Oregon Coast Aquarium in Newport for its $18 million capital campaign for expansion and renovations; and,
- $1.5 million for Lincoln City’s cultural center plaza and grounds development.
It’s essentially a repeat of the lottery bond allocations approved by the 2019 Legislature and signed by Brown at the end of last year’s session. The bonds were set to go on sale this past summer.
The steady flow of money into the state-run games of chance make the bonds attractive as a conservative long-term investment with relatively small return but a rock-solid record of paying off at the end of the bond’s term. The bonds have performed well during economic booms and recessions.
But COVID-19 was what investors call a “black swan” — a rare unforeseen catastrophic event that upends economies, blowing away the usual rules and strategies of the boom-and-bust market cycles.
When the pandemic ramped up in Oregon at the beginning of March, Brown issued an executive order telling residents to stay at home and shutting most businesses, including bars and restaurants. The Lottery’s points of sale are inside businesses and the shutdown cratered revenues as never before. At one point, Lottery sales were off by more than 90 percent. The state’s May revenue forecast indicated a crippled economy with massive revenue deficits.
Oregon Treasurer Tobias Read announced in July that the lottery bonds approved in 2019 would not go on sale. The bond market required a 4-to-1 revenue to debt ratio on the sale and the hit on the lottery sales had sent its balance to just above 3-to-1. Without the sale, the projects were dead.
Beginning in September, state economists reported surprising trends. State revenues were holding relatively steady during the crisis, fueled by income and business taxes. In December, the state’s balance sheet showed that with the partial reopening of businesses in the summer, lottery sales hadn’t just rebounded — sales had risen so strongly that the lottery was on pace to end 2020 with more annual sales than 2019.
Despite the current high COVID-19 infection rates, many lottery sales sites remained open. With vaccines giving hope for an end to the pandemic by next summer, Brown’s 2021-23 state budget proposal included lottery bond sales with the projects to receive revenue largely the same list as in 2019.
On Dec. 1, Brown released her $25.6 billion budget proposal for 2021-23, the next financial year, which begins July 1. Her plan to increase the main government budget — the general fund — by 8 percent drew the majority of attention from politicians and the media.
During the press conference, Brown made one passing reference to the lottery bonds. The proposal was a paragraph on page 310 of the 503-page budget. It said Brown planned to resubmit the same list as 2019, with a few modifications.
After the bond sale failure, the Legislature made an emergency allocation of general funds to make up for the bonds to pay for $7.8 million in repairs to the water system at the Confederated Tribes of Warm Springs. A rail project near Coos Bay was also shifted to another cost area.
Brown did withdraw bonds for a $15 million channel deepening project at the Port of Coos Bay and $6.5 million for an agricultural resource management project at Blue Mountain Community College. Both had been controversial items in the 2019 bond package and would likely flare debate again.
The proposal’s next stop is the Legislature, which convenes Jan. 19. The lottery bonds will be put into a bill and sent through the usual legislative system of hearings. The final list will be combed over by the Joint Ways & Means Committee. The lottery bond budget is usually one of the last pieces of legislation to be sent to the House and Senate chambers for a vote. Oregon does not allow for amendments to legislation on the floor of the House and Senate. It’s an up-or-down vote.
Having enjoyed bipartisan support when originally approved in 2019, the lottery bond projects, which touch just about every corner of the state, have a strong chance of passing largely unaltered.
In addition to the three Lincoln County projects, location-specific proposals include:
- City of Salem drinking water improvements: $20 million
- Eugene Family YMCA facility: $15 million
- Wallowa Lake Dam rehabilitation: $14 million
- Deschutes Basin Board of Control piping project: $10 million
- City of Roseburg/Southern Oregon Medical workforce center: $10 million
- City of Sweet Home wastewater treatment plant: $7 million
- YMCA of Columbia-Willamette/Beaverton Hoop YMCA: $5 million
- Jefferson County Health and Wellness Center: $4.1million
- YMCA of Marion and Polk Counties veterans affordable housing: $4 million
- Parrott Creek Child and Family Services, Oregon City, building renovation: $3.5 million
- Wallowa Valley Center for Wellness, Enterprise: $2.5 million
- Center for Hope and Safety, Salem: $2.5 million
- Port of Cascade Locks business park expansion: $2.4 million
- Reynolds High School health center: $2.33 million
- City of Sherwood pedestrian connectors: $2 million
- City of Gresham Gradin Sports Park: $2 million
- Curry Health District, Brookings Emergency Room: $2 million
- Hacienda CDC Las Adelitas Housing, Portland: $2 million
- City of Hood River waterfront stormwater line: $1.7 million
- Umatilla County Jail expansion for mental health services: $1.6 million
- Beaverton Arts Foundation Patricia Reser Center for the Arts: $1.5 million
- Port of Morrow Early Learning Center expansion: $1.4 million
Statewide projects
- Special Public Works Fund: $30 million
- Affordable Housing Preservation: $25 million
- Affordable Market Rate Housing Acquisition Loan Program: $15 million
- Water Supply Development Account: $15 million
- Levee Grant Program: $15 million
- Brownfields Redevelopment Fund: $5 million
- Oregon Main Street Revitalization Grant Program: $5 million
- Storm Drainage Improvements: $1.88 million.
- The Oregon Capital Bureau in Salem is staffed by reporters from EO Media and Pamplin Media Group and provides state government and political news to their newspapers and media around Oregon, including YachatsNews.com