SALEM, Ore. — A slow, steady economic recovery means the state treasury will take in more money than previously expected, economists said Thursday.
A quarterly forecast unveiled during a House Revenue Committee meeting indicated that revenue from tax collections will be up by more than $270 million since the last projections.
The tax revenue gains are divided between the current two-year budget cycle ending this year and the next two-year cycle ending in 2015.
The projections come amid an impasse among Republican and Democratic lawmakers over the budget. Democrats want more money for schools. Republicans still want deeper cuts to public pensions.
Democrats said they were cheered by the report, and Republicans were less reassured.
Senate Minority Leader Ted Ferrioli said in a statement that the projections should not change the budget debate.
“The focus of this session must remain the same: fixing Oregon’s broken retirement system and fostering job creation,” he said.
House Speaker Tina Kotek called the forecast “great news” and said the money should be used to reinvest in schools and education.
“We can go home with a good budget for schools and critical services, but we have the opportunity to do more,” she said in a statement.
Senate President Peter Courtney acknowledged that the forecast doesn’t make lawmakers’ decisions any easier but suggested a compromise as the best way forward.
Courtney said he wants to see the “new money” used to fund mental health services.
On Wednesday, Gov. John Kitzhaber unveiled a budget proposal aimed at breaking the deadlock. He gave lawmakers until the end of Thursday to get on board.
The forecast showed that personal and corporate income tax collections are higher than expected over the past few months.
State economists said there’s a good chance the increased revenue will trigger corporate kicker rebates this year. There is a much slimmer chance of personal kicker rebates.
State economist Mark McMullen said that while Oregon’s economy is improving, the pace of its recovery is slower than in previous downturns.
“We’re still not back to the good old days,” he said.