Oregon continues to outpace peer states with strong economic predictions outlined earlier this week by state economists. The quarterly economic forecast allowed the opportunity to reflect on prior forecasts, share updated economic data and discussed migration and other trends impacting state revenue. At the macro level, Oregon’s economy remained relatively stable and state economist Mark McMullen reported that the Federal Reserve’s goal of a “soft landing” appears to be working as inflation numbers have cooled in recent weeks.
State revenue continues to outperform expectations, due to growth in personal and corporate income taxes, interest earnings and large increases in insurance tax revenue. Economists predict the state will have $274 million more than the September forecast estimated for the 2023-25 biennium. The implication for increased revenue is two-fold:
The corporate and personal kickers will not see any adjustments as those were triggered based on prior forecasts. Kicker rebates and credits will be issued in 2024 for personal tax returns and corporate kicker will be credited to the state education fund.
The state reserves remain high with the combined Education Stability Fund and state Rainy day fund balance at over $2 billion, relieving pressure on the General Fund for additional transfers.
The forecast informs state lawmakers as they prepare for the 2024 session, which starts in February, and plan funding allocations to address issues like the drug addiction crisis, affordable housing and childcare. The full revenue forecast and Joint Revenue Committee presentation can be viewed here.