Earlier this week, lawmakers received the quarterly revenue forecast from state economists. This forecast is particularly meaningful as it provides the revenue assumptions for the 2023-25 biennium state budget. Oregon has sustained revenue growth for the past 12 forecast cycles, and the most recent projections are no different.
Projected revenue for the 2021-23 biennium is up $1.87 billion since the last (March 2023) forecast. This means much higher current biennium ending balances, higher reserves and a much larger kicker payout in 2024. To put a finer point on the numbers:
- The 2021-23 biennium ending balance is now expected to be $7.02 billion
- The state Rainy Day Fund is expected to be $1.35 billion
- The state Education Stability Fund is expected to be $708 million
- All this results in a total effective ending balance and reserves of $9.06 billion for 2021-23
Economists continue to project slower growth going forward but also acknowledge a much different economic dynamic driving growth, both in Oregon and nationally. Inflation and borrowing costs (due to Fed rate increases) are a dampening factor. But for the time the state is seeing continued job strength, economic growth and incoming tax revenues.
The net general fund and lottery revenue forecast for the next 2023-25 biennium (which will begin on July 1, 2023) is now expected to be $31.9 billion, up $2.3 billion from the forecast three months ago. Based on continued revenue growth above earlier forecasts, state economists are now projecting a personal kicker of $5.5 billion to be paid/credited in 2024, and a corporate kicker of $1.8 billion which would go into state education reserve accounts.
Chamber Budget Priorities in 2023
- HB 2980: $100 million revolving loan fund for workforce housing development
- HB 2981: $60 million loan & grant fund for pre-development and infrastructure costs related to workforce housing development
- City of Bend $4.4 million request for operational funding for homeless shelters
Transportation & Infrastructure
- City of Bend $10 million request for Hawthorne Over-Crossing project
Tax & Fiscal Policy
- Corporate Activities Tax: Raising the CAT filing threshold above the current $1 million in gross receipts
- Research and Development Tax Credits: Tax credits to incentivize job growth in key industries with research and development components, including but not limited to the semiconductor industry
- Enterprise Zone Re-Authorization: Ten (10) year extension of local property tax abatements in current Enterprise Zone program
- State of Sport Task Force: Seed funding ($150,000) to promote Oregon’s athletics, team sports, outdoor activities, and recreation ecosystem
Next steps for the 2023-25 budget are with the Joint Ways and Means Committee for agency budget figure setting, and debate over policy budget requests. All of this work is scheduled to wrap up prior to the June 25th deadline and end of session. For more information, here is a link to the full June Forecast.