LOC News
State Revenue Forecast: Stable, but with Elevated Risk
On Wednesday, the state’s Office of Economic Analysis (OEA) issued its quarterly revenue forecast. Cities can watch the presentation or view the meeting materials on the Legislature’s website. The forecast was presented to a joint meeting of the House Revenue and Senate Finance and Revenue committees, chaired by Representative Nancy Nathanson (D-Eugene) and Senator Mark Hass (D-Beaverton) respectively.
State Economist Mark McMullin described the revenue outlook as “pretty darn stable,” but noted that there were still significant concerns that a national recession could happen in the next year. Revenues have been coming in above what would be expected given the overall economic picture, indicating some of these gains may be tied to one-time taxpayer behavior related to recent changes in federal tax law. Another identified risk was whether revenues from the newly enacted corporate activity tax will come in at estimated levels when returns are filed towards the end of the biennium.
Oregon indicators of a possible recession included slowing job growth and the recent announcement of mass layoffs at NORPAC facilities near Salem, though these concerns were tempered by the overall strength of the Oregon labor market. Unemployment in Oregon is still near 4%, and wage growth has brought Oregon median household income above the national average for the first time in decades.
McMullin also noted that during the 2017-19 kicker certification process it was determined that another $118 million was included in the personal income tax kicker credit, bringing the total rebate to just under $1.7 billion. This money will be returned to taxpayers in the form of a credit on 2019 returns filed next year. The OEA is not projecting a personal income tax kicker for the current 2019-21 biennium, but they did project a corporate income tax kicker of $135 million. If the estimate holds, the corporate kicker would go to K-12 education as required by a 2012 ballot measure.
Contact: Mark Gharst, Lobbyist – mgharst@orcities.org
Last Updated 11-22-19
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