SALEM, Ore. — State economists say the upward trend in Oregon’s economy and job market has stayed the course, but they warn growth may soon begin tapering as ongoing problems in the stock market, among other issues, could take a big chunk out of tax revenues starting next year.
For lawmakers, who were briefed by economists Wednesday, it means that they won’t need to make significant revisions to the current 2015-17 budget cycle during this year’s short five-week session, which began Feb. 1. They also have slightly more revenue than previously expected — an extra $61 million — to work with for education, housing and other areas they’re hoping to boost this year.
While the positive economic trends seen most recently have helped keep the state’s current budget on stable ground, economists say they’re concerned personal income and corporate tax revenues will take a hit as early as next summer due to volatility in the stock market and other external factors.
Gov. Kate Brown said she was pleased to see stability in the current economic landscape, but she echoed economists’ concerns about the future.
“Although state revenues are on track to fulfill important commitments in education and other critical services, my optimism is tempered by longer-term dynamics in the forecast that call for caution,” Brown said in a statement. “I will work with legislative leadership to build reserves for future needs.”
Brown’s fellow Democrats similarly expressed cautious optimism about the quarterly economic report.
“Oregon’s economy remains stable and job growth is continuing at a healthy pace,” House Speaker Tina Kotek, D-Portland, said. “The legislature will continue budgeting wisely — making needed investments that will help Oregon families and communities thrive, while also maintaining a strong reserve fund.”
Republicans chimed in with more negative sentiments, calling attention to the nearly $166 million drop in total revenue economists are now projecting for the upcoming two-year budget cycle that begins July 2017.
“Our economy is flat, and the alleged economic recovery that bypassed middle-class Oregon families is sputtering,” Senate Minority Leader Ted Ferrioli, R-John Day, said. “Years of one-party rule plagued by overspending and government waste and an assault on small businesses has left us with a bleak economic outlook that needs to be addressed now.”
