State revenue forecast: Job growth cooling off
SALEM, Ore. (AP) — Oregon’s job growth has cooled off, and with that, the growth in personal income taxes that the state collects has also slowed.
The state says in its economic and revenue forecast, published Wednesday, that Oregon’s General Fund revenue outlook remains stable. Currently, those revenues are expected to land within $8 million of the estimate from the close of the last legislative session.
The report says that based on new employment data and withholdings out of Oregonian paychecks, the slowdown is already here. While Oregon’s labor market growth is slowing somewhat, the state is at or near full employment.
Governor Kate Brown issued the following statement in response to the November revenue forecast:
“On the positive side, job growth is higher and unemployment is lower than the national average and Oregon’s economy remains stable overall. However, our obligations to fund important services such as public education and health care still exceed available revenues, and, looking ahead, there will be some very tough budget choices to make.
“The 2017-19 budget I propose on Dec. 1 will reflect my top priority — investing in kids and lifting families out of poverty — but will necessarily include a level of program cuts I find unacceptable. I have begun discussions with legislative leadership about working together in the upcoming session to better align state resources with our aspirations for a stronger, better Oregon.”
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House Republican Caucus Budget Chair, Representative Greg Smith (R-Heppner), issued the following statement regarding today ‘s quarterly revenue forecast:
“While our economy appears stable for now, today ‘s forecast should serve as a reminder that future growth is anything but guaranteed. We are beginning to see signs of a slowing economy and a decrease in tax revenues on top of an already projected revenue shortfall in the next biennium. Taken together, these facts should give legislative leaders pause as we approach the budgeting process in the 2017 Legislative Session. It will be increasingly important in the weeks and months ahead for members of both parties to set aside partisan politics and embrace a reform-minded conversation about the state of our budget and our revenue system. Oregonians are counting on us to get this right.”
– Representative Greg Smith (R-Heppner)
Today ‘s revenue forecast included the following notable highlights:
New Facts
· Third Quarter personal income tax collections were up $57.4 million (3.0%) from the September 2016 forecast.
· Third Quarter corporate income tax collections were up $0.9 million (0.6%) from the September 2016 forecast.
· Oregon personal income was up $2.2 billion (1.2%) from the September 2016 forecast.
· Oregon employment was down 10,357 jobs (-0.6%) from the September 2016 forecast.
Changes Since Close of Session (COS)
· Personal income tax revenue is down $35.1 million (-0.2%) from the 2015 COS estimate.
· Corporate tax revenue is up $3.7 million (0.3%) from the 2015 COS estimate.
· General Fund gross revenue is up $9.7 million (0.1%) from the 2015 COS estimate.
· Net General Fund and Lottery resources are up $116.8 million (0.6%) from the 2015 COS estimate.
Kicker Refunds Implied by Forecast
· Personal – There is no personal kicker projected for 2017.
· Corporate – No corporate tax revenue is projected to be dedicated to K-12 education spending in 2017-19.
Revenue Changes
· Projected 2015-17 Net General Fund resources are down $14.3 million (-0.1%) from the September 2016 forecast.
· Projected 2015-17 Lottery resources are up $1.8 million (0.1%) from the September 2016 forecast.
· Projected combined net General Fund and Lottery resources are down $12.5 million (-0.1%) from the September 2016 forecast.
Ending Balance
· The projected ending balance is down $79.0 million (-24.4%) from the 2015 COS estimates.
· The projected ending balance is down $14.3 million (-5.5%) from the September 2016 forecast.
· The Rainy-Day Fund is projected to receive $180.7 million following the 2015-17 biennium.
