Governor Kotek Urges Trump Administration to Withdraw Politicized Budget Rule

Salem, OR – Governor Tina Kotek called on the Trump Administration to withdraw a proposed federal rule that would overhaul how federal grants are awarded and managed. Oregon's formal comments warn the proposal would inject politics into funding decisions, create unnecessary bureaucracy, and threaten the stable federal partnerships that support essential services in communities across the state.

"Federal tax dollars should be awarded based on the needs of communities and the merits of projects – not shifting political priorities," Governor Kotek said. "This proposal would make it harder for states like Oregon to deliver the services people rely on every day, from healthcare and emergency preparedness to infrastructure, education, and public safety. Oregonians deserve a federal government that provides certainty and transparency, not one that creates confusion and instability."

In fiscal year 2025, Oregon relied on $21.5 billion in federal grants to deliver critical services in every corner of the state. The grants support wildfire preparedness, coastal resilience, road and bridge improvements, disaster recovery, healthcare, housing, education, food assistance, and economic development. The Governor warned that greater uncertainty around these investments could delay projects, increase costs, and reduce services for Oregonians.

The State's comments submitted to the Office of Management and Budget (OMB) outline several major concerns with the proposed rule, including:

• Giving political appointees greater authority to approve, suspend, or terminate federal grants based on vague and subjective standards rather than established program requirements.
• Removing fixed amount subawards thereby creating uncertainty for states, local governments, Tribes, nonprofits, hospitals, universities, and community organizations that depend on predictable federal funding.
• Increasing administrative costs and paperwork while making it harder to deliver services efficiently.
• Undermining long-standing merit-based grantmaking by allowing political considerations to influence funding decisions.
• Putting essential programs at risk, due to undefined and subjective standards, including those supporting public health, food assistance, emergency management, transportation, workforce development, scientific research, environmental protection, and rural communities.

Oregon also raised concerns that the proposal exceeds federal authority, creates significant legal uncertainty, and would impose substantial new administrative burdens without sufficient analysis of the financial impacts on states and local partners.

In addition to requesting that OMB withdraw the proposal outright, Governor Kotek urged the federal government to extend the public comment period by at least 90 days to allow states, local governments, and stakeholders enough time to fully evaluate the far-reaching changes.

To view the State of Oregon’s full response, click here.