The State of Oregon’s most recent revenue forecast (PDF) was released on August 26 during a joint meeting of the interim House and Senate Revenue committees.
Revenue forecasts are used as the basis for the state’s overall budget, and enable lawmakers to make adjustments to the amounts allocated to the various agencies and commissions that provide services to all Oregonians.
State Economist Mark McMullen reported that revenues coming into the state’s coffers were $85 million lower than expected for the recently concluded 2013-15 biennium. Despite that, he described the forecast as “stable,” and said that taxpayers can expect to receive their personal “kicker.”
The “kicker” is the state’s only functional spending limitation, and sends money back to taxpayers in the form of a tax credit when revenues outpace forecasts by two percent or more. Although it is a relatively unique policy, Oregon voters placed the “kicker” in the state’s Constitution with the passage of Measure 86 in the 2000 general election.
Because of that, a total of $402 million will be returned to the people. It will be the first “kicker” to come back to Oregonians since 2007, and is expected to be around $124 for the average tax filer.
McMullen stated that the recent turmoil in the Chinese stock market and economy is a “big concern,” along with a strengthening U.S. dollar. While the 20 percent value increase in the dollar over the last year and a half means that foreign products are less expensive for American consumers, it also means that products manufactured here are more expensive for consumers elsewhere.
Manufacturing employment in Oregon is up four percent and showing strong growth, especially in the food processing industry. Overall, the state’s economy is showing employment growth, and especially in its mid-sized metropolitan areas. There has been growth in both high and low wage jobs throughout the state, but we’re still weak in the areas in between.
Rural Oregon has struggled mightily during the recent recession. McMullen said that those regions are adding jobs and seeing an increase in business formations and help wanted advertisements.
McMullen acknowledged, though, there is still a growing gap between Oregon’s urban and rural areas in employment.
Lower energy costs are proving to be a positive development for consumers. However, McMullen stated that those potential savings have been offset by rising housing costs.
To view a slideshow summary of the revenue forecast, click here.
Representative Gail Whitsett
House District 56
Permission to republish granted by Representative Gail Whitsett’s office