Oregon’s most recent
revenue forecast was released by representatives of the
state’s Office of Economic Analysis on December 2. Their
presentation provided a snapshot of where our economy is
right now and what it is projected to look like on a
short and long-term basis.
There were several positive aspects of the forecast. The
first is that the state will have $56 million more in
resources than was anticipated during the previous
forecast in September.
Around half of the $56 million in additional revenue
came from corporate taxes. The analysts said that is the
result of a “boom” in the state’s corporate excise tax
According to the analysts, job gains in Oregon have been
matching their fastest rates during the housing boom
that preceded the 2008 onset of the Great Recession.
Personal income tax revenues coming into state coffers
are growing at double-digit rates and wages for the
average Oregon worker are increasing between 3 and 4
percent. That is higher than the national average, which
is between two and two and half percent.
Overall, the state has around 50,000 more jobs than it
did before the Great Recession. Not all of our 36
counties are adding jobs, but that expansion is finally
reaching into the state’s rural areas at a two percent
rate. That is right around the national average.
The total number of jobs in Oregon is higher than it’s
ever been, and so is the state’s population. Rural areas
are seeing some of that population increase. A downside,
however, is that housing affordability is becoming a
huge issue in many parts of the state. This is
especially the case in areas like Bend, Hood River and
Another revelation from the forecast is that around half
of the $56 million in additional resources is from an
upswing in lottery sales. One of the analysts stated
that “vice sure is alive and well in Oregon.”
Revenues from alcohol, lottery and criminal fines are
all growing by double digits. Cigarette sales are also
doing better than expected. The gaming industry is
increasing nationally after five years of weak
performance, and it’s the strongest in Oregon. Much of
the growth here has been driven by a double-digit
increase in video lottery sales.
The state ended the 2013-15 biennium with around $1
billion in reserves. While that is the highest
percentage of the general fund that the state has ever
been able to save, the analysts cautioned that it would
not be enough to offset another recession. They said
that such a scenario would take around double that
amount, $2 billion, from revenues.
Also included in the forecast was a look at options for
restricting Oregon’s state and local revenue systems.
The Legislative Revenue Office was
directed to prepare that analysis under
House Bill 2171,
which passed through both chambers with broad bipartisan
support during the 2015 regular session.
A technical advisory group was formed to look into the
different options that are available, and that body
worked on six simulations that were presented during the
forecast. The systems used by other states were examined
as part of the analysis. Half of the options were
revenue neutral, and the other three sought to increase
dollars flowing into state government. Options that were
discussed included a gross receipts tax and a
The analysis of alternative revenue scenarios started
with the premises that our current tax structure is
volatile due to its heavy reliance on the income tax.
Its second premises was that local tax systems are
“rigid” due to the passage of previous ballot measures
that limited the property taxes that cities and counties
can levy on citizens.
All indications are that there will be further
discussions in the 2016 session and beyond as to what
the state’s tax structure should look like. As your
elected state representative, my job is to solicit your
input about these and all other matters and bring it
forward when these issues are being considered in Salem.
As such, I would love to hear from you about your
suggestions and ideas regarding the state’s revenue
structure. Are you happy with the way it is right now,
or would you like to see it changed? If so, what changes
do you want made to it?
I look forward to hearing your suggestions to help
ensure that your voice is heard when the Legislature
meets again for its next regular session in February.
To watch the video of the Revenue forecast, click the
Representative Gail Whitsett
House District 56