WASHINGTON: Oregon legislators received a relatively rosy economic forecast Wednesday morning, with revenue projections up for the current state budget period and through 2025. But Democratic leaders warned that it’s still not enough to keep up with rising costs. “Even when business is booming in Oregon, our revenue system prevents us from generating the funds we need to invest in our schools, senior care, and health care programs,” House Majority Leader Jennifer Williamson said in a statement. Economists are projecting an additional $188.6 million in the general fund and $6.7 million in lottery funds for the 2017-19 budget. That will put a small dent in the projected $1.8 billion budget gap that lawmakers currently are struggling with. The gap is due to rising costs for the state’s public pension system and Medicaid, as well as three costly voter initiatives passed last fall. “Our budget isn’t balanced,” Senate President Peter Courtney said in a statement. “We’re going to have to make some cuts. We’re going to have to raise some revenue. Both are tough. Both have to get done if we are going to meet the needs of Oregon and her people.”
The Legislature will wrap up a series of statewide public hearings on the 2017-19 budget next week, with hearings in Ashland, Eugene and Tillamook. It will finalize the spending plan following the May 16 revenue forecast. Republican leaders, meanwhile, reemphasized their call for spending reform. “This forecast is good news,” House Republican Leader Mike McLane said in a statement. “We will again set a new record for the amount of tax revenues flowing into government coffers. Now let’s pass a balanced budget by matching our spending with our revenues.”
“The sky is not falling,” Senate Republican Leader Ted Ferrioli said in a statement. “Today’s released revenue forecast is one of the greatest forecasts in recent memory.” The state’s reserves also are continuing to grow and are expected to pass the $1 billion mark for the first time this biennium. The majority of those funds are in the state’s Rainy Day Fund and Education Stability Fund. In addition to providing a cushion during a recession, the healthy reserve fund also is boosting the state’s credit rating, state economist Mark McMullen said. “People are really starting to notice,” he said. Economists also said it’s unlikely, but not impossible, that personal income taxpayers will receive a “kicker” refund for the current biennium, triggered when tax collections beat projections by at least 2 percent.They also noted that the state’s economic growth has truly been statewide, with all but one county – Morrow – adding jobs last year.
