LOC News
State Leaders Hear Final Economic Forecast Before Budget Setting
On Wednesday, Oregon’s Office of Economic Analysis provided the final revenue forecast of the legislative session to the Legislature’s revenue committees. Legislators will rely on this latest forecast’s assumptions when creating the 2025-27 state budget that will pass before the end of session.
Here are the topline highlights from the forecast:
- 2025-27 budget has less resources than expected. The Office of Economic Analysis expects the state to receive less revenue during the current and coming biennia than it predicted in its first-quarter forecast, released in March. This means the Legislature has about $500 million less to spend. However, the overall forecast predicts lawmakers will have $39.3 billion in general fund and lottery money to spend, compared to the $40.1 billion expected three months ago.
- A kicker is still expected. Kicker returns have been revised to $1.64 billion, a $87.5 million decrease.
- Economy slowing. Oregon’s GDP has grown more slowly than the national GDP by 1.5 percentage points. Job creation has lagged the national average as well, and the state’s population has continued to grow very slowly. The forecast predicts individual income growth to slow and business income to decline in 2025.
- Higher unemployment expected. Because the forecast predicts that growth will be “sufficiently slow” and that “labor conditions (will) soften appreciably,” this will eventually lead to higher unemployment.
- Federal uncertainty abounds. The state economic continues to track federal policy but does not speculate on future changes because they can be levers of the economy. The state economist did note federal tariff policies, which change by the day, would play a big role in whether the outlook gets better or worse. Oregon is highly trade dependent and would be more significantly impacted by trade wars than many other states.
Read the full revenue forecast
Read the executive summary for the revenue forecast
Watch the revenue forecast presentation to the Legislature
Contact: Jenna Jones, Tax & Finance Lobbyist – jjones@orcities.org
Last Updated 5/16/25