Economists are saying that Oregon’s financial good times may be ending. House Speaker and Dem Dan Rayfield of Corvallis, who is a former chief budget writer, said the Legislature would keep investing in things like housing, mental health, addiction and abortion access. Republicans, on the other hand, want to slash the budget. But it was the Oregon state economists on Wednesday who made the statement and a serious warning: The state’s surging revenue growth is about to end.
Research into the Oregon economy found multiple outlooks but lead mostly to a downward turn. Under the more optimistic “baseline” forecast, economists say Oregon will see $600 million more in the current two-year budget cycle than they anticipated just three months ago, an increase largely driven by personal income taxes. Taking a look, this would result in Oregonians receiving a record $3.46 billion back in the form of the kicker, the unique Oregon policy that returns personal income taxes if they come in at least 2% higher than initial forecasts.
Economists in their latest quarterly revenue forecast offered two possible scenarios in coming years: diminished economic growth or outright recession. However, that won’t stop Oregonians from seeing a massive tax refund.
The potential recession sounds scary to those who lived through them. If Oregon does enter into a recession, economists say Oregon will still see roughly $50 million more than previously expected in the budget cycle that runs through June 2023. But they say revenues for the next two biennial budgets come in at $1.2 billion and $1.4 billion lower than previous estimates.
State economists say Oregon will see $600 million more in the current two-year budget cycle than they anticipated just three months ago. This is an increase largely driven by personal income taxes. This is under the more optimistic “baseline” forecast. That would result in Oregonians receiving a record $3.46 billion back in the form of the kicker, the unique Oregon policy that returns personal income taxes if they come in at least 2% higher than initial forecasts.
Oregon currently holds record budget reserves that are expected to top $2 billion by June 2023. And Oregon is currently sitting on $3.7 billion in revenue that it held off spending in the current budget. If lawmakers leave that money untouched, it could help offset future downturns.
