The latest state Economic and Revenue Forecast makes clear that the Governor needs to call for a special session — separate from the upcoming special session to address transportation funding — to head off a looming fiscal crisis.

The forecast delivered sobering news: Oregon’s general fund resources have dropped by more than $845.5 million since the last forecast in May. That is a precipitous drop.

A major driver of the revenue loss is Oregon’s automatic connection to the federal tax code. Oregon connects to changes in the federal tax code on a rolling basis. As a result, when Congress alters the federal tax code, Oregon automatically replicates many of the changes. And in July, the Republican majority in Congress passed a budget bill — the so-called One Big Beautiful Bill Act — laden with massive tax cuts that heavily favor the rich and blow up the national deficit. Oregon is on course to automatically replicate many of those inequitable tax cuts. It’s estimated that this rolling reconnection will cost our state nearly $1 billion in the current budget period.

That nearly $1 billion in revenue loss comes sooner and on top of the billions in losses to the state as a result of the cuts to health care, nutrition programs, and other services in the Republican budget bill in the years to come. Automatically replicating tax cuts — tax cuts mainly benefiting the wealthy — is a dangerous way to manage Oregon’s finances. The Oregon legislature held no hearings on these tax cuts. No Oregonian got to weigh in on whether it’s a good idea for the state to double down on these inequitable tax policies. And the budget Oregon lawmakers crafted earlier this year assumed no such tax cuts.

To prevent deeper harm, the Governor should call a special session as soon as possible, and lawmakers should heed that call. There are two priorities they should advance in this special session.

First, the legislature should shift from a rolling to a static tax connection, restoring control over state tax policy and protecting state revenue from the volatility of federal politics. Oregon should not let Congress dictate our state’s future. Moving immediately to a static connection will protect Oregon from much of the billion-dollar revenue loss, putting Oregon in a better place to deal with the other fiscal challenges posed by the federal Republican budget.

Second, lawmakers should retain a portion of the state’s projected kicker, which is estimated to total $1.4 billion. Trimming the kicker from just the top 5% of Oregonians would save hundreds of millions of dollars, resources that will help the state keep Oregonians from going hungry or without health care. We cannot afford the luxury of giving massive kickers to the richest Oregonians while Congress pulls the rug out from under our state’s most vulnerable families.