Oregon economy strong, but state budget gap still looms

SALEM, Ore. (AP) – Oregon’s economy boasted another strong year of employment, population and wage growth in 2016, rolling an extra $102 million in revenue into state coffers than previously expected, a new revenue forecast out Wednesday said..

State economists told lawmakers in Salem that the economic gains were seen across the state, and the positive effects are now filtering down to low-income households and other parts of the economy that are usually last to benefit.

Economists said these trends should continue over the next two years and raise an additional $195 million in revenue for the state budget than previously expected.

But with a projected shortfall still topping $1.7 billion for the biennium, legislative leaders said they still have a lot of work to do and hard choices to make.

“This forecast is good news,” said House Republican Leader Mike McLane, R-Powell Butte. “We will again set a new record for the amount of tax revenues flowing into government coffers. Now let’s pass a balanced budget by matching our spending with our revenues.”

House Speaker Tina Kotek offered this statement in response to the latest forecast:

“Oregon’s economic growth remains stable, and business activity is generally outperforming the rest of the country. Nonetheless, Oregon’s state budget is facing a shortfall of nearly $2 billion – a structural deficit that has been a generation in the making.

“For over two decades, legislators have been fighting to get our schools back on track and maintain essential services despite an unstable, inadequate tax system.

“We have succeeded in containing costs through health care and public safety reforms, and we will continue looking for ways to improve efficiency and streamline services.

“But without new revenue, the impacts of our current budget deficit will hit people in every corner of the state with teacher layoffs, bigger class sizes, higher tuition costs, the loss of health insurance coverage, or other harmful impacts in their everyday lives.

“We need to grapple with these stark realties, while also working full force to find a better way forward,” Kotek concluded.