Today the Office of Economic Analysis presented its third economic and revenue forecasts of the 2021-2023 biennium.
All of Oregon’s primary revenue streams continue to out-perform forecast predictions including lottery, personal and corporate income.
Forgive me for the short report today. Lots going on in Salem due to compressed timelines.
Some general takeaways from today’s presentation:
The Labor supply, which I reported on last time, is increasing but not nearly as fast as employers want to hire.
Housing, a major component of the economy is not keeping up with demand due to several factors including land supply, supply chain issues and labor shortages to name a few.
All major revenue sources are growing strongly led by corporate taxes.
Oregon’s General Fund is still volatile, but the state has diversified its revenue recently with a few consumption based taxes like the Corporate Activities Tax (CAT tax) and marijuana taxes being the most recent.
Now to the numbers:
Fourth quarter personal income tax collections were below $122.4 million (-4.4%) from the December forecast, personal income was $6.4 billion (2.6%) above the December forecast, and personal income tax revenue is up $760 million (3.7%) from the Close of Session Forecast (COS).
Fourth quarter corporate income tax collections were up $161.7 million (90.5%) from the December forecast and corporate tax revenue is up $633.8 million (46.2%) from the 20201 COS.
Oregon’s employment was 8,290 jobs (-0.4%) from the December Forecast.
General Fund (GF) gross revenue is up $1.598 billion (6.8%) from the 2021 COS estimate and Net GF and Lottery resources are up $2.722 billion (9.8%) from the 2021 COS estimate.
As a result, Oregon’s PERSONAL Kicker is projected to kick to the tune of 964.2 million for 2023 as opposed to the projection of $558.3 million back in December. As for the CORPORATE Kicker, it is now expected to kick to the tune of $633.8 million, as opposed to the projection of $250.3 million back in December. Of course this kicker will be dedicated to K-21 education spending during the next biennium.
Projected 2021-2023 Net General Fund Resources are up $771.5 million (3.2%) from the December forecast, Projected 2021-2023 Lottery resources are up $19.9 million (1.1%) from the December forecast and as a result projected combined net General Fund and Lottery Resources are up $1.173 billion (4.0%) from the December forecast.RevForecast.pdfEcoforecast.pdf