Oregon public health programs hit with $117 million in surprise federal cuts; counties await word on impact

The Oregon Health Authority, nonprofits and county health officials are bracing for layoffs and cuts after the Trump administration abruptly halted $12 billion in funding that the federal government had already approved for fighting addiction, combatting diseases like syphilis and tuberculosis and other public health purposes.

Oregon officials on Thursday announced that the cuts total roughly $117 million in the state, adding that the impact “will be felt immediately in all nine federally recognized Tribal communities and in every county in Oregon.”

The cuts come even as county public health agencies and community-based organizations already have been struggling due to previous state and federal cutbacks. Local officials have been asking state lawmakers for more money to address health inequities and increase youth addiction prevention efforts, among other things.

Local agencies are tallying up how much money has already been spent under the grants while preparing to refund any federal funds that have not yet been spent.

“For the counties that will be losing funds, it will be devastating,” said Sarah Lochner, executive director of the Oregon Coalition of Local Health Officials. Already, she added, state laws that ensure property taxes don’t keep up with inflation mean that “every county has been struggling to continue the service levels that residents expect.”

An agency spokesperson did not immediately respond to a question from The Lund Report about layoffs. Oregon Health Authority managers have only recently begun discussing the cuts with unions representing their employees, often a preliminary step toward layoffs.

“These cuts are of a size and scope that they will impact staffing across the whole agency,” agency Director Sejal Hathi wrote in an email to staff late Thursday.

According to the agency’s public announcement tallying the impact of the cuts, the money had been going to purposes including the following:

• Fill gaps in community substance use treatment, prevention, and recovery services, especially for veterans, young adults and communities of color.
• Provide technical assistance and training to rural health care providers, Tribes, local public health departments and community-based organizations to improve health in communities experiencing health inequities.
• Promote vaccines to combat preventable diseases.
• Add laboratory capacity and modernize data systems to promote increased disease tracking, testing and response.

State agency staff have been cautioned to not expect a lot of shifts to fill gaps. The Oregon Health Authority had already been struggling internally with $260 million in unexpected costs and externally with spending cuts. Earlier this month it instituted a hiring freeze and ban on discretionary spending at the Oregon State Hospital.

Meanwhile, top agency leaders have sought to redirect funding to create and staff a new high-level central management and policy office to better align its policies, finances and public relations messaging.

Gov. Tina Kotek has requested an increase to the Oregon Health Authority, in part to boost capacity in behavioral health. But state budget leaders recently sounded a note of caution about those goals, well before the surprise federal cuts were announced.

In Minnesota, state officials on Wednesday estimated the budget hit at $226 million and in Washington state officials put the figure at $160 million. The New York Times has reported that the cuts are expected to result in dozens of layoffs around the country. And some states may sue.

According to the Oregon Health Authority announcement, officials “will continue to engage in a full evaluation of the impacts of these terminations, including whether they are legal.”

• The Lund Report is an independent, nonpartisan, nonprofit, online news source covering health care issues in Oregon and southwest Washington. Nick Budnick can be reached at nick@thelundreport.org.