Oregon has more spending money and recession fears have abated a little in Oregon’s most recent economic forecast.
Oregon Office of Economic Analysis economists presented the quarterly update to the Senate and House revenue committees on Wednesday.
“We have had a consistent pattern of every time we come in front of you, here’s more money, more money, more money,” said Mark McMullen, state economist.
The net General Fund revenues for 2019-21 has increased $387 million since the close of session last summer.
Oregon is in its 11th year of expansion, uncharted waters for forecasters, according to Senior Economist Josh Lehner. Economists are grappling with how changing demographics will affect Oregon.
Oregon’s household income is higher than the U.S. average across most income levels. Population and job growth, which are major drivers of Oregon’s economy, are expected to slow, though.
Oregon’s reserve funds are also predicted to grow, reaching 13.9% of the General Fund at the end of the 2019-21 budget period.
The national economy remains stable as trade wars have deescalated and rate cuts have calmed the financial markets. The coronavirus disease outbreak in China, however, raises new concerns about disruptions that could spark a recession. Oregon’s economy, which relies on labor migration and exports, is vulnerable.
Adjusting the budget is one of the main reasons the Legislature switched from bi-annual to annual sessions in 2010.
The State School Fund is unlikely to benefit from the extra revenue. The 2019-21 State School Fund increased $800 million to $9 billion, enough for most districts to maintain current service levels. At the same time, public education funding increased $2 billion a biennium with the new tax in the Student Success Act.
Meanwhile, other state agencies are facing budget holes. On Wednesday, The Oregonian/OregonLive reported that the Oregon Department of Forestry says it will run out of money by March.
Schools could see some new money indirectly. For instance, legislators are considering adding money this session to programs to help homeless youths.
The next revenue report is scheduled for May 20, after the session has ended.
