Oregon cities, counties say Measure 110 blew a hole in their budgets

By Dirk VanderHart (OPB)
Feb. 9, 2023 1 p.m.

Local governments are trying to get lawmakers to reroute tens of millions of dollars currently paying for addiction services. That has service providers up in arms.

FILE - A woman enters the Great Circle drug treatment center in Salem, Ore., on March 8, 2022. In 2020, Oregonians voted to decriminalize drugs and dedicate hundreds of millions of dollars to treatment services.

FILE - A woman enters the Great Circle drug treatment center in Salem, Ore., on March 8, 2022. In 2020, Oregonians voted to decriminalize drugs and dedicate hundreds of millions of dollars to treatment services.

Andrew Selsky / AP

Addiction service providers who’ve seen their funding swell under the state’s pioneering drug decriminalization law are rushing this year to fend off a proposal that would siphon tens of millions of dollars away from their efforts.


The drastically expanded slate of resources available to addicts around the state — housing, peer mentorship, low-barrier treatment, materials to safely use drugs, and more — are too fragile to risk pulling even a chunk of funding away, they say.

But counties and cities tell a different story, that the new services offered as a result of 2020′s Measure 110 came at the detriment of their budgets, and that public safety and other necessities have been harmed as a result.

City and county officials are asking lawmakers to pass House Bill 2089, a proposal to rejigger the formula for how money from state cannabis taxes is spent — and claw back tax money local governments and state police could count on before Measure 110 took effect.

The bill received a pair of public hearings in the House Revenue Committee this month. It represents a grudge match between two of the year’s most pressing issues: a growing addiction crisis that most politicians pin among the state’s greatest challenges and a possible looming recession.

“We’re all hurting,” said Tera Hurst, executive director of the Health Justice Recovery Alliance, which backed Measure 110 and is opposing the bill. “These dollars are spoken for.”

The impact of Measure 110

At issue in the debate over House Bill 2089 are the hundreds of millions of dollars in recreational cannabis taxes that Oregon takes in each two-year budget cycle. Prior to Measure 110′s passage, those dollars were distributed to cities, counties, schools, state police, and some behavioral health services.

When they approved Measure 110, voters upended the formula. Alongside decriminalizing personal possession of hard drugs, the measure capped the cannabis taxes that could flow to those former priorities each budget cycle at $90 million, a sum that can rise with inflation. It directed any cannabis taxes above that to a new fund aimed at building out a robust network of addiction services in each county.

While its rollout was far from pretty, that fund has sent more than $150 million to organizations throughout Oregon to date. Advocates say it has already helped tens of thousands of people access services that can steer them toward treatment and help them remain clean.

“When my stepson spent years and years in his addiction … I could not get him into treatment quickly,” said Janie Gullickson, executive director of the Mental Health and Addiction Association of Oregon, who testified against HB 2089 on Wednesday. “He overdosed many times. I am proud to say that once a Measure 110-funded program became available and was operational, I got him in within 24 hours.”

HB 2089 would change the flow of cannabis taxes yet again, routing 11% of the money that currently flows largely to Measure 110 priorities back to cities, counties and state police.

If in place in the current budget, that change would take back more than $30 million of the more than $220 million that Measure 110 services received, state revenue documents suggest. (The League of Oregon Cities, which supports the bill, says this transfer is intended to be one-time-only, but as the bill is written it would be ongoing.)

HB 2089 would also ensure that cities, counties and state police are the sole recipients of the pot of cannabis taxes they currently receive, but which they now share with schools and some addiction and mental health services.

“This bill is a proposal to restore revenue that was abruptly lost to local governments and Oregon State Police,” said state Rep. Nancy Nathanson, D-Eugene, who chairs the House Revenue Committee. “Are there other solutions? Sure there are other solutions, but each of those comes with opponents for various reasons.”


Peter and Paul

Dozens of people offered testimony against HB 2089, which they argue could sabotage the state’s nascent efforts toward adequately treating addiction.

“This proposal disrespects the Oregonians who championed and voted for an evidence-based, treatment-focused response to our state’s addiction crisis,” said Emily Hawley, of the ACLU of Oregon, another opponent.

Even some Measure 110 skeptics are circling the wagons. Mike Marshall is executive director of Oregon Recovers, a group that opposed the decriminalization measure when it went before voters.

“One of our primary concerns was that it stole from Peter to pay Paul,” Marshall testified Wednesday. “In other words, it looked to solve Oregon’s addiction crisis by transferring funding from important education, county, mental health programs to critically important recovery support programs.”

The proposal in House Bill 2089, Marshall argued, was simply Measure 110 “in reverse.”

“It’s Peter clawing back the money that Paul received,” he said.

Marshall and his allies are preparing to support a bill to hike alcohol taxes in Oregon to increase funding for state priorities like addiction treatment and deter drinking. He said Wednesday the amount of the tax hike proposal was still being worked out, and that he expected a proposal to emerge as early as next week.

Meanwhile, cities and counties that used to count on cannabis tax money before Measure 110 say they have struggled to fill the void, and that public services have suffered. According to the Legislative Revenue Office, more than $40 million that would have gone to cities and counties during the 2021-23 budget cycle before Measure 110 instead went to addiction services. State police saw their pre-Measure 110 share of cannabis taxes reduced by $33 million, to $13.5 million.

Proponents of HB 2089 hold up the explosion of illegal cannabis grows in Southern Oregon — which have led to stories of human trafficking, threats of violence, and water theft — as an example of the problems the foregone tax money might address.

“In the counties we are fighting illegal marijuana grows every day,” said Derrick DeGroot, a Klamath County commissioner and president of the Association of Oregon Counties, which supports the bill. “We have gentlemen that go to check on these grows to find out what’s going on. They’re just code-enforcement officers and they’re met with armed men … Not getting the revenues we need for police actions is devastating to counties.”

Oregon lawmakers put $25 million toward fighting illegal marijuana grows in late 2021.

Cities also argue that regular municipal services are in jeopardy because of Measure 110.

The Metropolitan Mayors Consortium, made up of Portland Mayor Ted Wheeler and 24 other metro-area officials, says their “ability to pay for public health and public safety services has lessened” because of the measure. The City of Beaverton says the funding cut it saw is the equivalent of 1.5 police positions and is exacerbating an expected budget shortfall. The city of Eugene says it’s had to absorb a million-dollar revenue gap.

“It’s not cities and counties versus the addiction community,” said Lindsay Tenes, a lobbyist for the League of Oregon Cities. “What Measure 110 did was take critical funds from services to fund new programs. Cities also want to be partners in the fight against addiction.”

HB 2089 is just one of a host of changes to Measure 110 lawmakers are contemplating this year. The measure has been held up by opponents as a major driver of rising overdoses and surging property crime, and several Republican bills would undo the drug decriminalization provisions altogether.

But those bills have little chance of passing in a Democrat-controlled state, where leaders like Gov. Tina Kotek say more time is needed before Measure 110 can be judged a failure or success. Leading Democrats are instead looking at less-sweeping tweaks, including a bill that would introduce potential criminal penalties for possessing five or more pills containing fentanyl. That bill, House Bill 2645, passed out of the House Judiciary Committee on Wednesday.

Lawmakers also could take up recommendations made in a recent audit of Measure 110 by Secretary of State Shemia Fagan’s office. They include better data collection to assess the measure’s impacts, eliminating inefficiencies, and directing the Oregon Health Authority to better support a citizen group responsible for steering funds.