Oregon’s tax revenue forecast exceeds expectations

SALEM, Ore. (AP) — Oregon’s tax revenue forecast has jumped again, potentially giving state lawmakers more money to spend in the next budget and driving up the likely state tax rebate that taxpayers could receive next year, the Oregonian/OregonLive reported Wednesday.

State economist Mark McMullen told lawmakers Wednesday that income taxes paid by individuals and corporations continue to outstrip economists’ expectations. But the state has only begun to receive a “trickle” of tax returns and tax payments so there’s little solid information, McMullen said. The next revenue forecast in May will provide a sharper focus and state lawmakers will base their 2023-2025 budget on that.

“There is a significant amount of additional resources that will be available for policymakers as they craft the next biennial budget,” McMullen said. “That said, there’s still a tremendous amount of uncertainty out there.”

The state of Oregon is now expected to send nearly $4 billion back to taxpayers next year, as forecast revenues continue to soar past economist’s initial expectations, Oregon Public Broadcasting reported.

State economists bumped up their prediction for general fund and lottery revenues in the current budget cycle by nearly $500 million, according to a document from the Legislative Revenue Office.

The latest predicted state revenue bump could help erase a budget shortfall of $560 million forecast by budget analysts in December.

In the big picture, economists expect Oregon lawmakers will have $3 billion less general fund and lottery revenue to spend in the next two years than they had available in the current budget cycle, the Oregonian/OregonLive reported.

Gov. Tina Kotek said in a statement Wednesday that “the Legislature still has some tough choices to make.”

“We will have to keep focused and stay the course in order to make much-needed investments in Oregonians’ most urgent shared priorities: housing and homelessness, behavioral health, and education,” Kotek said.

At the last state revenue and economic forecast released in November, state economists estimated the kicker rebate to be paid out as tax credits in 2024 could be around $3.7 billion. Senate Republican Leader Tim Knopp, of Bend, has proposed legislation to issue the kicker to taxpayers as checks this year. Senate President Rob Wagner, D-Lake Oswego, said that idea was a nonstarter.