State Facing $1.35B Budget Deficit Next Year In Spite Of Booming Job Market
Oregon's economy is flourishing, but there are warning signs of a national slowdown and state lawmakers are staring down a $1.35B budget deficit next year. Over the next three budget cycles, state revenue could be lower than previously anticipated, with state economists forecasting $67.9M less general fund and lottery revenue from 2017 to 2019 than previous estimates, The Oregonian reports.
The panel of state economists identified missed state revenue expectations as one of the signs of a national slowdown. Other signs include a weak manufacturing sector and businesses’ reluctance to invest in capital. State economists are not predicting a recession during the next two-year budget.
"It's hard to be scared when Oregon's job market continues to perform as it has,” said state economist Mark McMullen. “We're growing twice as fast as the US across a wide range of industries. At some point, this does have to come back down to earth, and we expect it to do this during the next biennium, which puts the lid on our revenue growth going forward."
While Measure 97, a corporate tax measure on November’s ballot that would tax gross receipts at a rate of 2.5%, would boost annual tax revenue by about $3B, House Minority Leader Mike McLane feels it could still have adverse effects. "Now is not the time for significant policy changes that would not only produce uncertainty but could have a chilling impact on our private sector,” he said. [TO]