Oregon economic forecast includes kicker, possibility of 2020 recession
Wednesday, August 29, 2018
Oregon’s rosy quarterly economic report Wednesday included a note of recession caution.
Oregon’s continued strong economic growth would lead to an estimated $894 million in state kickers, about the same time that federal fiscal and monetary policies will begin to drag on economic growth in 2020, according to the quarterly Oregon Economic and Revenue Forecast.
“We are really running up on an inflection point in the economic cycle,” Mark McMullen, Oregon Office of Economic Analysis state economist, told legislators. He said factors such as demographics, tax law changes and interest rates could be “creating headwinds” that would affect economic growth in 2020.
State economists presented the latest projections to a joint meeting of the Senate Interim Finance and Revenue and the House Interim Revenue committees.
The forecast calls for Oregon revenue exceeding the 2017 forecast by $894 million, leading to a $686 million personal income tax kicker and a $208 million corporate kicker. Under Oregon’s kicker law, if state revenue exceeds the close of session budget forecast by more than 2 percent, the surplus goes back to taxpayers.
Dedicating the personal kicker to education is among the revenue reform ideas floated by members of the Joint Interim Committee on Student Success. The corporate kicker is already dedicated to K-12 education. The Student Success Committee has been tasked with finding ways to improve and adequately fund the Oregon education system.
The next forecast, due Nov. 14, will form the basis of the governor’s budget for 2019-21.