Plans for the Southern Oregon Medical Workforce Center, which has been years in the making and is intended to address the shortage of medical professionals in the region as well as provide an economic boost to Douglas County, took a turn this week with the announcement that the $10 million in lottery funds appropriated for it by the Oregon State Legislature is no longer available.
A steep drop in lottery funds due to the COVID-19 crisis killed the sale of $273 million in state bonds to pay for 37 major projects in Oregon. Funding for the projects — including the money earmarked for the workforce center — was authorized by the Legislature at the end of the 2019 session.
Other projects losing funding include water system overhauls in Warm Springs and Salem, rehabilitating the Wallowa Lake Dam, a Deschutes Basin piping project, two affordable housing projects, a new YMCA for Eugene and deepening the Coos Bay channel.
“There’s not enough money — there is no repair,” said Sen. Betsy Johnson, D-Scappoose, a chair on the budget-writing Joint Ways and Means Committee.
The City of Roseburg agreed last summer to loan up to $10 million to help establish the center. Roseburg City Manager Nikki Messenger, who also sits on the board of the nonprofit corporation created last fall to oversee the project, said it’s too early to tell what the loss of $10 million in lottery bond funding means for the project.
The board of that nonprofit — the Umpqua Valley Development Corp. — has scheduled an emergency meeting for Tuesday, and Messenger said she expects to get additional information then.
“My expectation is that we will continue to work with Oregon Solutions to move the project to the next stage while the funding issues are worked out in the Legislature,” she said.
Oregon Solutions is the state agency created by the Oregon Legislature as a watchdog arm of the government on projects involving larger expenditures of public funding. Last month the agency released a report that said while the proposed Southern Oregon Medical Workforce Center has strong community support, those involved also have a host of concerns, including a lack of transparency, a shortage of housing and public transportation and a potential inability to attract adequate faculty.
Richard Heard, board president of the UVDC, said work toward making the center a reality will continue despite this week’s setback.
“We’re continuing to move forward with development of the Southern Oregon Medical Workforce Center as the legislature addresses the statewide shortfall in lottery funds,” Heard said. “We have proven the necessity of the project for the region and built a strong coalition of public and private support.”
George Fox University has signed on to provide the academic and administrative structure of the college. Plans called for the college to offer advanced degrees in multiple allied and mental health fields.
When the Legislature approved the $10 million in funding for the center last summer, Kelly Morgan, CHI Mercy Health CEO and vice president of the UVDC board, touted the potential it had to transform the region.
“Healthcare is vital to our local communities and the region. The demand for healthcare has steadily grown over the years and along with it the need for skilled providers. Southern and rural Oregon face growing allied and mental health workforce shortages that pose serious healthcare access issues,” Morgan said. “Building the Southern Oregon Medical Workforce Center will provide a regional pipeline of skilled healthcare providers to better ensure access to services.”
But that $10 million is no longer available due to a collapse in the sale of lottery tickets. Those sales took a nosedive during the coronavirus — sales for April were off by 90% compared to the year before.
In order to sell bonds, the state has to show a 4-to-1 ratio between forecast Lottery Fund revenue and the amount of debt in the bonds. That has not been a problem in previous budget cycles since the lottery was established in 1984.
Lottery sales sharply declined during the coronavirus crisis that arrived in Oregon at the end of February. The subsequent closing of businesses and the stay-home emergency order for residents kept customers away from venues that sell the state-sponsored games of chance.
The loss has left the state with a Lottery Fund bonding ratio of just over 3-to-1, which is too low.
“The State Debt Policy Advisory Commission has notified legislative leadership and the Governor there are no longer sufficient funds to issue lottery-backed bonds approved during the 2019 session,” said Nikki Fisher, a spokeswoman for Gov. Kate Brown.
Fisher said Brown and legislative leaders are discussing “next steps” on the projects.
The Associated Press contributed to this report.