Oregon lawmakers debate how to use additional $800 million in new revenue forecast
Upbeat revenue forecast also makes 2024 kicker rebate likely; reaction statements from Gov. Brown, lawmakers, OEA
PORTLAND, Ore. (AP) — Following another sunny revenue forecast in Oregon - fueled by a surge in corporate and income tax revenues - economists said Wednesday that state lawmakers have an additional $800 million to spend this legislative session.
In addition, the better-than-expected forecast means that Oregon taxpayers are likely to get another kicker rebate in 2024, on top of the collective $1.9 billion in kicker tax credits this year, state economists predict.
“This is a pivotal moment for Oregon,” Gov. Kate Brown said. “We have a windfall of one-time resources this year, and we have the opportunity to make big investments—and to do the big and bold work to help our working families and businesses thrive. We cannot miss this moment.”
The forecast comes as state lawmakers are a week into a one-month legislative session. Prior to lawmakers returning to the Capitol, some said — even without the forecast — they expected to spend roughly $2 billion this session.
The growth in revenue means a larger budget to work with during the short legislative session. But how the money is used remains up for debate
“Nice to have more money, and sometimes bad to have more money,” state Sen. Lee Beyer, a Springfield Democrat and chair of the Senate Finance and Revenue Committee, said. “The appetite for expenditures grows, and the real trick… is to use that money wisely on one-time expenses.”
Democrats have outlined an ambitious list of priorities this session including affordable housing, increasing child care options, bolstering the state’s workforce, addressing climate change and setting aside a significant amount of money for the next biennium in case state revenues weaken.
House Speaker Dan Rayfield, a Democrat, said in a statement he wants to use the additional funds for “critical investments” for areas like schools, job training, working families, housing, small businesses and behavioral health services.
Senate President Peter Courtney echoed many of Rayfield’s priorites.
“We can build big projects across the state. We can get the homeless off the street. We can do year-round schools. And we can better recruit, train and evaluate police. Much work to do in a very short period,” the Democrat said.
On the other side of the aisle, Republicans say they want to use the revenue to address crime, emphasizing a spike in violent crime and illegal marijuana grow operations causing major issues in southern Oregon.
Senate Majority Leader Tim Knopp, R-Bend, said he is pushing for an additional $60 million in funding for Oregon State Police, to help local law enforcement with general public safety needs and to combat illegal marijuana grows.
Republicans also called for spending $50 million on forest thinning to prevent wildfires.
“Decades of forest mismanagement has left our forests overstocked ready to explode with a single spark,” Knopp continued. “We must act in a bold way to ensure Oregonians are protected from devastating wildfire.”
Since the start of the pandemic, state economists have been giving positive revenue forecasts that have far exceeded expectations.
Much of the predicted surplus is due to corporate tax revenues, which have continued to surge as businesses raised prices amid supply shortages and found consumers prepared to pay more, economists said. Income taxes are also up, driven by wage increases.
Other sources of revenue, like estate taxes and lottery receipts, have also exceeded expectations.
Oregon Public Broadcasting reports that in total the surging revenues mean the state is expected to take in $2.7 billion more during the current two-year budget cycle than economists expected at the cycle’s outset in July 2021, a nearly 10% jump.
News releases:
Governor Kate Brown Statement on February Revenue Forecast
(Salem, OR) — Governor Kate Brown today issued the following statement on the state’s February revenue forecast:
“Our latest state revenue projections present an opportunity to make investments that spur a strong economic recovery and support working families, especially those who have been hardest hit by the pandemic, wildfires, and the unprecedented challenges Oregonians have faced in the last two years.
“This is a pivotal moment for Oregon. We have a windfall of one-time resources this year, and we have the opportunity to make big investments—and to do the big and bold work to help our working families and businesses thrive. We cannot miss this moment.
“While I am pleased to see growth in wages for Oregonians, there is more work we need to do to grow, develop, and support our workforce. Now is the time to make critical investments in housing, child care, workers, and businesses to help jumpstart growth and keep our economy moving.
“And as we work to help Oregon families succeed, with these additional resources at the midpoint of session, we also have an opportunity to ensure that every Oregonian feels safe in their community. I will continue to work with legislators to address community safety, and I encourage members of both parties to bring forward their ideas for evidence-based community violence prevention and intervention. When we invest in and create opportunities for Oregonians and their families, we create safer, healthier communities.”
Speaker Rayfield calls for investments to support schools, working families, small businesses following strong revenue forecast
SALEM – Today, Oregon House Speaker Dan Rayfield (D-Corvallis) issued the following statement after the release of the latest quarterly state economic and revenue forecast:
“After two incredibly difficult years, today’s news means we can make critical investments in our schools, working families, and small business.
“We need to seize this opportunity to invest in our schools, particularly given the burnout many frontline workers in education are feeling.
“We need to support working families and small businesses by investing in skills training and helping people start and expand small businesses.
“We need to do whatever we can to bring down the cost of living for hardworking Oregonians, particularly individuals and families in need of affordable housing. That means making smart investments to help Oregonians cover everyday necessities like rent, mortgage payments, prescriptions and childcare.
“We also need to prioritize investments that will keep our communities safe while helping our most vulnerable neighbors, including investments in mental and behavioral health services.”
Majority Leader Fahey Calls for Investments to Drive Down Cost of Living and Address Homelessness Following Latest Revenue Forecast
SALEM – Today, Oregon House Majority Leader Julie Fahey (D-West Eugene/Junction City) issued the following statement after the release of the latest quarterly state economic and revenue forecast:
“Today’s revenue forecast will allow us to invest in the critical programs and services Oregonians need to drive down the cost of living and address our state’s homelessness crisis.
“For too many working families, covering monthly expenses has become a challenge. We’ll fight to drive down costs by investing in affordable childcare, housing, and healthcare so that Oregonians don’t have to struggle to make ends meet.
“Solving Oregon’s homelessness crisis will require us to lead with compassion and invest in solutions that work. This session we support investing in a coordinated response to homelessness by partnering with local cities and counties across Oregon. We’ll also look to fund programs like Project Turnkey, an innovative model that buys and turns hotels, motels and other buildings into shelter and supportive housing units.
“Right now we have the means and the vision to help Oregonians and tackle some of our state’s biggest challenges. I stand committed to a robust, equitable recovery that reaches every corner of the state.”
Senate Republicans Call For Spending on Reducing Crime As Revenue Forecast Shows Big Money
SALEM, Ore. – This morning, Oregon’s Office of Economic Analysis reported that tax revenues coming into state government are higher than previously projected. The state has over $900 million in extra revenue.
In the meantime, rising crime rates are impacting Oregonians across the state, from shootings and theft in the Metro area to illegal marijuana growth in Southern Oregon.
With the excess revenue, Senate Republicans are pushing to spend $60 million on Oregon State Police to help local law enforcement with general public safety needs and to combat illegal marijuana grows.
“Crime is on the rise,” said Senate Republican Leader Tim Knopp (R-Bend). “The Governor continues to double down on letting criminals out of prison, while several bills are working through the legislature that will make our communities more dangerous. We must invest in public safety.
With the excess revenue, Republicans will also pursue a $50 million appropriation to fund forest thinning operations around the state.
“Decades of forest mismanagement has left our forests overstocked ready to explode with a single spark,” Knopp continued. “We must act in a bold way to ensure Oregonians are protected from devastating wildfire.
“We must also be responsible with this money. We need to reserve more funds for the next downturn. We also need to look seriously at giving Oregonians a tax break. The government has buckets of money, but inflation is pinching the pockets of working Oregonians. As Democrats introduce bills to increase taxes, Republicans are looking at ways to cut them.”
Oregon House Republican Caucus:
Oregon state revenue continues to increase while Oregonians feel the pressure of inflation
SALEM, Ore. – House Republican Leader Vikki Breese-Iverson (R-Prineville) released the following statement in response to the February state revenue forecast announced today.
“More money for the state is not the same thing as good news for Oregonians,” said Leader Breese-Iverson. “People are struggling to make ends meet while the state is swimming in tax revenue. Years of Democrats’ failed leadership have resulted in tax and fee increases. This has brought the state more money than ever at a time when inflation is hurting individuals, families and small businesses by raising prices and diluting salaries. Now should be the time to eliminate financial burdens. Instead, Democrats have floated ideas like a new sales tax. Oregonians deserve better.”
The National Federation of Independent Businesses’ Small Business Optimism Index recently reported that the number of small business owners raising average selling prices increased by the highest amount since the fourth quarter of 1974.
Oregon Education Association:
State Revenue Forecast Provides Opportunity to Make Real Investments in Education
PORTLAND, OR – Following this release of the Oregon State Revenue Forecast, OEA President Reed Scott-Schwalbach released the following statement:
“Today’s revenue forecast demonstrates that Oregon is well positioned to invest in our neighborhood public schools and to get our students the resources they need to thrive. One of best ways to do that during our current legislative session for lawmakers to pass House Bill 4030, which includes funding to build the next generation of educators, retention grants for current educators, and streamlines the process to get more educators into Oregon classrooms for face-to-face instruction and student support.”
