Latest Oregon revenue forecast rises by $2 billion
SALEM, Ore. (AP) — Oregon economists presented a “shocking” and significantly improved revenue forecast Wednesday, which could leave the state’s current budget nearly unscathed by the economic impacts of COVID-19.
Despite the forecast, which is $2 billion more than predicted in May, officials say that the “economic pain has yet to be fully reflected in Oregon’s revenue data” and that future budgets will still likely face cuts.
“The substantial improvement in today’s revenue forecast highlights the uniqueness of a recession brought on by a global pandemic,” House Speaker Tina Kotek, D-Portland, said. “While we are in a better financial position than we expected to be, it is still an unpredictable road ahead.”
"Hallelujah! We needed some good news," Gov. Kate Brown said during a wildfire briefing, noting that her hope is waning for a federal relief package from Congress.
Mark McMullen, the state economist, attributed much of the improved forecast to billions of dollars in federal aid, the CARES Act, personal income tax payments that were filed near the extended July deadline, corporate income taxes and lottery revenues.
McMullen said he was shocked by the increase in corporate tax collections, which could even trigger a “kicker”—a surplus in tax revenue that would provide additional funding for schools.
During Wednesday’s presentation, Rep. E. Werner Reschke, R-Klamath Falls, reviewed charts that showed an increase in personal income tax collections and corporate tax collections from the previous years.
“If you were to lay (the charts) in front of somebody and told them that there was some sort of catastrophic economic pandemic event and asked them to pick where it was they wouldn’t be able to do it, because it just looks like things have continued as normal,” Reschke said.
In August, Oregon lawmakers held a special session to close the then-predicted $1 billion shortfall in the state budget. But, with the new revenue forecast Oregon could end the current two-year budget with a $1.7 billion “cushion.”
McMullen noted that this will likely not always be the case, however economists predict that the state’s economy will recover sooner than initially expected.
While some lawmakers called the news a “success” others argued against the notion, specifically noting a disproportionate economic hardship on impoverished communities, people of color and rural cities and towns.
“I don’t think this is a success,” said Sen. Lynn Findley, R-Vale. “I think we have damaged rural Oregon to a degree that I don’t know if they will come back in the next three to five years.
McMullen noted that revenue numbers don’t fully reflect the financial inequality that Oregonians face.
“It’s clear that the federal stimulus is working to sustain families and businesses, and by extension, state revenues in the short term,” House Republican Leader Christine Drazan, R-Canby, said. “This is encouraging news, but long term is another story as more than 150,000 Oregonians look for work and families and communities across the state are just beginning the difficult process of rebuilding and recovering from devastating wildfire losses.”
Governor Kate Brown Statement on September Revenue Forecast
(Salem, OR) — Governor Kate Brown today issued the following statement about the state’s September revenue forecast:
“Today’s revenue forecast is a testament to the resiliency of Oregonians and to how we—as a state—have been able to manage the COVID-19 pandemic by working together.
"Oregon workers and business owners have risen to the challenge, by following health and safety guidelines and continuing to go to work, helping our economy to begin recovering from the impacts of this pandemic while preventing large-scale outbreaks. By working together to keep major sectors of the economy open, including construction and manufacturing, we have kept Oregonians working and businesses operating, all while keeping people safe at the same time.
"This does not, however, take away from the massive impact that this disease has had on our communities, particularly its disproportionate impact on Black, Indigenous, People of Color, and Tribal communities and those dependent on the service economy.
“While revenue projections are up for this biennium, the revenue forecast did not balance our upcoming budget, and we must tread lightly. We still face structural inequities, as well as fluctuations in health care spending related to ongoing COVID-19 response, at the same time we face a serious budget deficit. In addition, many of our critical pandemic response efforts, from testing to personal protective equipment, have been funded with CARES Act funding, which expires at the end of the year. We urgently need congressional action to provide direct help to local governments, businesses and families so that we can all continue to provide critical services to Oregonians during this crisis.
"Oregon has a history of being smart with our reserves and saving for a rainy day. We cannot abandon this approach in the middle of a pandemic, with cold and flu season rapidly approaching. Or while response and recovery efforts to a historic statewide fire emergency continue, and the costs of those efforts to save homes and lives continues to grow. We must prepare for the costs of continuing to provide critical services in the next biennium––from health care to affordable housing to wildfire readiness and response.
“This year, we must celebrate every piece of good news we can get. But even with the welcome news of increased revenue projections, my commitment remains to make prudent financial decisions and position our state to manage unforeseen economic challenges that may come our way."
News release from Oregon brewers, winegrowers and restaurant industry:
Oregon Economic Forecast: Bars and Restaurants Hit Hardest
44% of Oregonians working in the hospitality and leisure sector have lost their jobs
PORTLAND, Ore. — On Sept. 23, the Oregon Office of Economic Analysis released its 2020 Economic and Revenue Forecast, which showed the hospitality sector has been hit hardest by the COVID-19 pandemic.
The report states demand and revenue for Oregon’s restaurants and bars are down 56% and the leisure and hospitality sector will have lost 53,000 jobs in 2020 — a 44% decrease — far more than any other sector.
Oregon Wine Council Board Co-Chair, Elin Miller, Oregon Brewers Guild Executive Director, Christina LaRue, Oregon Beer and Wine Distributors Association President, Bob Liner, Oregon Winegrowers Association President, Alex Sokol, and Oregon Restaurant and Lodging Association President and CEO, Jason Brandt, released the following joint statement:
“Closures due to COVID-19 are having a devastating impact on Oregon’s breweries, wineries, cideries, distilleries, restaurants, bars and hospitality sector. Prior to the COVID-19 pandemic, Oregon was home to 900 wineries, 1,200 vineyards, 73 distributors, 400 breweries, 60 cideries, more than 50 distilleries and 10,000 restaurants, creating thousands of good-paying jobs and several billion dollars in wages. Many of those jobs are now at risk or have been lost. We’ve also been hit hard by the recent and ongoing wildfires plaguing our state.
“Beer, wine, cider and spirits are an essential part of Oregon’s economy and identity. In order to survive, Oregon’s breweries, wineries, cideries, restaurants and bars need the support of our elected officials. The last thing our local businesses need right now are tax increases. We remain committed to working together to help rebuild our economy and communities once the public health crisis ends.”
Despite this economic report highlighting the devastating blows experienced by beer, wine, cider, spirits, bars, restaurants and the hospitality sectors, lawmakers are considering proposals to raise alcohol taxes in the 2021 legislative session, including a plan from the Oregon Health Authority that would increase beer, wine and cider taxes by nearly 800%. More than 80% of Oregon likely voters oppose increasing these taxes according to a recent survey conducted by Patinkin Research Strategies.
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About the Oregon Wine Council
Representing over fifty percent of Oregon wine grapes grown, produced and sold, the Oregon Wine Council (OWC) advocates on behalf of growers, producers and businesses supporting Oregon’s thriving wine industry across the state. The Oregon Wine Council’s mission is to protect, strengthen, unify and represent the entire Oregon wine and grape industry through strong leadership for the benefit of current and future Oregon winegrowers.
About the Oregon Brewers Guild
The Oregon Brewers Guild is Oregon’s non-profit trade association for the state’s independent breweries. The Guild, which receives no state funding, comprises 160 brewing companies, 125 associate or supplier members and nearly 4,000 enthusiast members or S.N.O.B.s (Supporters of Native Oregon Beer). For more information, see https://oregoncraftbeer.org/.
About the Oregon Beer and Wine Distributors Association
The Oregon Beer & Wine Distributors Association (OBWDA) is a full-service, professional trade association representing beer and wine distribution companies in Oregon. Our primary mission is advocating on behalf of member companies in the legislative, regulatory, legal and public policy arenas. The OBWDA is a valuable resource to policy makers and the public on alcohol regulation, educational programs designed to combat underage drinking and drunk driving, and the many good-paying jobs we create.
About the Oregon Winegrowers Association
The Oregon Winegrowers Association advances and protects the investments of its members. Harnessing the power of state-wide consensus, the OWA stands as a vital advocate for the health, growth and economic sustainability of Oregon's wine grape growing and wine production community. The OWA is the premier statewide organization speaking on behalf of Oregon's vineyards and wineries to decision-makers in Salem and Washington, D.C. to ensure the community's continued success. The OWA is funded through voluntary membership dues and provides legislative and regulatory advocacy, legal guidance, regulatory compliance updates and cost saving solutions to its members.
About the Oregon Restaurant and Lodging Association
Oregon Restaurant & Lodging Association (ORLA) is the leading business association for the foodservice and lodging industry in Oregon. A not-for-profit trade organization, ORLA represents approximately 2,600 members, and advocates for over 10,220 foodservice locations and more than 2,000 lodging establishments in Oregon. The lodging and food and beverage industry is responsible for 183,191 jobs bringing in over $13.8 billion in annual sales for Oregon.
