Oregon recently wrapped up its short legislative session, and let’s be honest about what happened: lawmakers modestly trimmed tax breaks for rich investors and corporations to stave off cuts to services families depend on. That was the easy part.

Oregon is facing a genuine budget crisis over the next five years because of cuts to Medicaid and food assistance in H.R. 1, the federal budget package enacted by congressional Republicans last July. Oregon will need to spend billions more to keep families insured by the Oregon Health Plan and prevent them from going hungry. That’s a structural problem that won’t fix itself. The sooner lawmakers confront it, the better off Oregonians will be.

The just-concluded legislative session sent Senate Bill (SB) 1507 to the Governor’s desk for her signature, a good step in the right direction — but only a step. The bill helped to address the immediate budget hole created by H.R. 1 by stopping Oregon from doubling down on a few wasteful federal tax breaks that mainly benefited the rich and corporations. This will save Oregon more than $300 million in the current budget period, and hundreds of millions more in the years to come, helping to protect the services Oregonians depend on. The bill also expanded Oregon’s strongest tax benefit for working families, the Earned Income Tax Credit (EITC).

Those are real accomplishments. As a result of SB 1507, Oregonians who would have lost health coverage or food assistance from the budget shortfall still receive benefits. And because of the EITC increase, about 230,000 Oregon families working hard but living on the brink will have more money in their pockets to afford rent or groceries.

And yet, we came into this session having identified more than $700 million in tax changes Oregon lawmakers could have acted on, but didn’t. Under pressure from business interests, the legislature acted on less than half of that amount. The gap between what the legislature did and what it could have done isn’t hypothetical. It’s families who may still lose access to the Oregon Health Plan, parents who may still lose child care support, and families on the edge who needed the legislature to do more to tackle the affordability crisis. 

While some argue that the better approach is to woo businesses with direct subsidies and tax incentives and trust that the jobs and revenue will follow, experience shows otherwise. Research finds that 75 percent or more of these kinds of incentives subsidize projects that would have happened anyway. This means that, more often than not, business tax subsidies hand corporations public money to make the same business decisions they would have made without it. In other words, they’re usually a waste of public resources.

Here in Oregon, we’ve seen this approach play out. Not long ago, Oregon layered direct funding and tax credits to help Intel win billions in federal funding, and yet Intel announced layoffs of nearly 4,500 workers here anyway. Big corporations make decisions based on global forces that no state tax break can overcome. Meanwhile, every dollar we give away is a dollar that can’t keep a neighbor insured or fed.

What actually builds a strong economy is investing in people. Healthy, educated Oregonians who can afford housing and child care create a cycle of widespread prosperity. Children raised in a stable home with quality care and access to nutritious food will be more prosperous and productive as adults. The presence of a skilled workforce is a more crucial factor in attracting businesses than tax incentives. Oregon should prioritize investing in our people.

The 2027 legislative session is the next opportunity to confront the structural problem created by H.R. 1, and lawmakers need to be more ambitious than they’ve been thus far. The budget hole caused by federal cuts will demand leadership and courage. Prioritizing the needs of Oregonians over the demands of big corporations is in Oregon’s interest, both morally and economically.

SB 1507 was a meaningful step. Now, Oregon needs to leap.