by Sara Odendahl, Bend Chamber’s Director of Government Affairs & Strategic Initiatives
Earlier this week, the Legislature’s Joint Revenue Committees received the quarterly economic and revenue forecasts. This is the data that will inform the budgeting process for the next biennium (FY 25–27), which begins July 1, 2025. State economist Carl Riccadonna delivered a sobering economic forecast, which he categorized as “a prolonged period of stagnant or sluggish growth for Oregon’s economy.”
Riccadonna also discussed the state’s GDP, Oregon trails the national average by 1.2 percent, and labor conditions, which remain stable when measured against prior pre-recessionary periods. Based on several metrics as well as a general air of uncertainty from the Federal government, this economic overview estimated a 25 percent chance of a recession in the upcoming year, compared to the national models, which predict a 40 percent chance of recession. Oregon does continue to post slower than average population growth (0.5% average predicted through 2035), which coupled with an aging demographic profile, creates less activity in the labor market.
Legislators asked a variety of questions, digging into federal tax and trade policy and impacts on Oregon businesses; declining manufacturing activity; and Oregon’s ability to position itself favorably for companies’ reshoring/investing in business operations.
2025–27 Revenue Forecast
The short story is that revenue projections are down from prior forecasts, in part due to declining wages/salaries and associated withholdings, as well as revisions to forecasting methodologies implemented in December 2024. Budget writers will have $39.3 billion to appropriate for the two-year budget, which is down $500 million from the prior forecast, which informed the draft budgets. However, this amount is up approximately $2 billion from the prior biennium.
2023–25 Biennium, ending on June 30:
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- The Ending Fund Balance for the current biennium is projected to be $2.17 billion, which is down $414 million from the prior forecast but is up $1.52 billion from the close-of-session forecast.
- A personal Kicker of $1.64 billion and a corporate Kicker of $916 million is projected for this biennium (the individual kicker is paid when people file taxes in 2026; the corporate kicker goes to education)
2025–27 Biennium beginning July 1, 2025, and ending June 30, 2027:
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- Total available resources, as noted above, decreased $756 million from the prior forecast. When considered with the substantial increase of $1.3 billion projected from the December forecast and the increase of $350 million from the March forecast, legislative budget writers have approximately $894 million more to spend than anticipated during the September 2024 forecast.
- General Fund and Lottery resources will soar to $39.3 billion for the upcoming biennium, which is approximately a $2 billion increase from the 2023–25 biennium. General Fund resources alone will increase by 12 percent.
Reserves:
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- The economists project that each of Oregon’s reserve accounts — the Education Stability Fund and the Rainy Day Fund — will have a total balance of $3.7 billion for the 2025–27 biennium.
A link to the full revenue forecast is here, and a link to the economic forecast presentation is here.
The next steps in the budget process are for Sub-Committees of Ways and Means to move through the various policy and budget bills currently waiting in the queue. Now that these revenue projections are public, the figure-setting process will begin in earnest, and bills will start moving quickly. It remains to be seen what implications the forecast will have on big-ticket items such as K-12 spending, Housing/Homeless funding and a Transportation Package.
Questions about the Chamber’s FY 25–27 budget priorities? Please contact Sara Odendahl, Director of Government Affairs & Strategic Initiatives.
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