Lawmakers will hear quarterly economic report
As Oregon approaches the halfway point in its two-year budget cycle, lawmakers will soon hear the states quarterly report about how the economy is doing and how much it will yield in taxes for schools and state services.
The report will be presented Wednesday morning to a joint meeting of the House and Senate revenue committees.
Personal and corporate income taxes, which the state budget largely relies on to pay for most state services and aid to public schools, have held up so far during the cycle that started back in July 2013.
The two-year budget was based on an assumption of about $17 billion in income taxes and lottery proceeds. So far, with three quarterly reports since lawmakers approved the budget, the projected total of combined funds is $17.1 billion, $110.4 million ahead of the close-of-session forecast.
The general fund, which gets most of its money from income taxes, has actually done better and is $192.8 million ahead of the original forecast. But lottery proceeds have been lagging; net amounts available for the budget will be reduced as the Oregon Lottery upgrades all of its video terminals in the next few years.
During the past 10 months, Oregons unemployment rate has dropped from 8 percent to 6.9 percent, and the economy has added 36,200 jobs, all but 3,000 in the private sector. Oregons peak unemployment during the downturn was at 11.6 percent five years ago.
The three previous reports did not project a rebate of excess income taxes known popularly as the kicker, which occurs when collections exceed the original forecast by 2 percent at the end of a budget cycle. The last such kicker was in late 2007, when a record $1.1 billion was paid out to individual taxpayers.
The quarterly report will be presented by state economist Mark McMullen and senior economist Josh Lehner. The legislative revenue staff, led by Paul Warner, will offer supplemental information.