Quarterly revenue forecast triggers movement on budget

At a May 16 joint meeting of the Oregon Senate Finance and Revenue Committee and House Revenue Committee, State Economist Mark McMullen released the quarterly Economic and Revenue Forecast. According to the forecast, general fund revenues will total $15.6 billion in 2013-15, an increase of 9.5% percent from the prior biennium.  This increase is one percent above the March forecast.

For the current biennium (2011-13), projected state revenues are up another $126 million since the last forecast in March 2013 and up $216 million above the close of the 2011 legislative session forecast. The total forecast for 2011-2013 general fund revenues is now $14.2 billion. The May outlook assumes that corporate tax revenues will be $2.7 million above the threshold, generating a kicker payment of $20.3 million. In their report, state economists Mark McMullen and Josh Lehner said the state could still see enough personal income tax growth to trigger the personal kicker. According to McMullen, this forecast reflects a slow, steady economic recovery that has resulted in slightly higher revenue collection.  

The co-chairs of the budget-writing Joint Ways and Means Committee indicated on May 17 that they intend to move forward with the budget based on the May forecast. The co-chairs’ announcement came two days after Governor John Kitzhaber offered lawmakers a “grand bargain” that included $350 million in saving through changes in PERS and $200 million in new tax revenue. He called on legislators to adopt his plan (or a version of it) by May 16 or move forward with crafting a budget based on the May forecast without any additional revenue or cost savings.