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Dear friends,
While enjoying this long holiday weekend, please take a moment to remember why we celebrate Memorial Day. For a listing of statewide Memorial Day events and to learn more about this important holiday that commemorates the men and women who have died while in military service, click here. Thank you to all those who have served and sacrificed as well as to those families whose loved ones paid the ultimate price.
June 2 will mark the Legislature's "second chamber work session deadline." This is the date by which bills need to be passed out of most committees. "Most," because a few committees — namely, the Rules, Revenue, and Ways & Means Committees — are not subject to the same deadline and will continue to work bills after the deadline.
On May 16, the state's latest Revenue Forecast was released. Oregon's economy continues to grow; it’s bigger than it's ever been, and it's still growing. State economists now project $187 million in additional resources for Oregon's next budget. This helps, as the current deficit to fund current services now is estimated at $1.4 billion (down from the prior $1.6 billion projection). Unfortunately, it also now looks like the personal income tax kicker is also kick! The kicker is a rebate calculated for individual and corporate taxpayers in the state when the state collects more revenue than anticipated. Oregon's Constitution mandates the rebate be issued when calculated revenue for a biennium exceeds the forecast revenue by at least 2 percent. For individual taxpayers, the Oregon Department of Revenue distributes the rebate. For corporations, the kicker amount is returned to the state general fund to provide additional funding for K-12 school. The kicker is projected to be $407.8 million this biennium; that's $69.9 million above the 2-percent threshold. That said, the kicker is not yet a certainty and economists aren't even close to 100 percent sure we'll have one. For further details on the revenue forecast, please see below.
On May 5, I joined a field tour of the Willamette National Forest for members of the Legislature to discuss Oregon's unique partnership and collaborative approach to increase the pace and scale of restoration on our National Forests. We were also joined by Oakridge Mayor Jim Coey. The field tour was hosted by the Southern Willamette Forest Collaborative and the Willamette National Forest, Middle Fork Ranger District in collaboration with the Oregon Department of Forestry.
Below you will also find information on:
- My Session Bills: SB 930 (protecting personal information on vehicle registrations)
- Free Dental Care for Veterans: June 24
I hope this information is helpful and informative for you or someone you know. As always, feel free to share your comments, questions or concerns with me by phone, mail or e-mail.
May Revenue Forecast
The state's latest revenue forecast was released on May 16 by the Office of Economic Analysis:
Revenue Outlook
The close-of-session ending balance projection is up from the March forecast estimate by $375.8 Million. Revenue has slowed in recent months, but is still in a period of growth. The Rainy Day Fund will likely receive $180.7 Million at the end of the 2015-2017 biennium.
Both the corporate and personal income tax revenue projections have increased since the 2015 close-of-session estimates. This means both kickers are likely to be triggered. The corporate kicker is anticipated to contribute $75.5 Million to K-12 education for the 2017-2019 biennium. The personal kicker is projected to disburse $407. 9 Million. If the personal kicker were not a factor, the general fund would receive approximately $570 Million in additional revenue, an influx that would help the deficit significantly.
Economic Outlook
Job growth has slowed, but Oregon is still in a period of growth and projected to add more than 2,000 jobs per month throughout the rest of 2017. Jobs creation continues in service and tech sectors with a historically low unemployment rate continuing despite frictional unemployment from in-migration. As Oregon reaches near full employment, skilled worker shortages may be a factor in the future.
Forecast Risks
- Federal fiscal policy poses a risk in Oregon through a number of mechanisms, including federal grants, federal procurement, direct federal employment, timber policy and payments, direct spending reductions, household federal transfer payments, and transportation funding broadly. Additionally, Oregon may experience indirect impacts felt by neighboring states with large federal and military workforces. These impacts are indeterminate, and merit continued attention.
- Housing affordability in Oregon remains constrained throughout the Willamette Valley. Low vacancies and construction rates continue to be outpaced by demand in the both rental and ownership markets. Nationally, the rate of new home ownership has begun to increase slightly.
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Initiatives, referendums, referrals, and elections. Generally, the ballot box and legislative changes bring a number of unknowns that could have sweeping impacts on the Oregon economy and revenue picture. Three measures that passed during the recent election (Measure 95, Measure 98, Measure 99) will shape how some of Oregon’s revenues are spent.
Other notable items
Cannabis Revenue — Marijuana sales are still in a period of acceleration. The first year of sales exceeded the expectations based on Washington and Colorado’s market rollout. As the industry matures, recreational sales are expected to increase revenue by $150 million for the 2017-2019 biennium.
Lottery Resources — The Office of Economic Analysis continues to track the estimated impact of the Cowlitz Tribe’s Ilani Casino Resort that opens in La Center, Wash., this year. Video lottery sales are also down. Furthermore, there are new restraints on the spending of lottery revenue. Oregon voters approved two new constitutional amendments directing how lottery resources are to be spent. The measures below will likely constrain how discretionary lottery dollars may be distributed.
Reserves — The Office of Economic Analysis looks at three accounts when analyzing the state’s budget reserves: The Oregon Rainy Day Fund, the Education Stability Fund, and the current ending balance for the General Fund. The projected reserves at the close of the 2015-2017 biennium are: $388.8 Million from the Rainy Day Fund, $383. 8 Million for the Education Stability Fund, and $723. 9 Million in the General Fund. Totaling $1.5 Billion in reserves amongst all three funds.
Additional Information
Revenue forecast documents are available, here: https://olis.leg.state.or.us/liz/2017R1/Committees/SFR/2017-05-16-08-30/MeetingMaterials.
My Session Bills: SB 930 (protecting personal information on vehicle registrations)
Following reports of an uptick in burglaries in which thieves enter through the garagedoor, using the resident’s own stolen garage door remote, I introduced and carried this bill to passage in the Senate to allow registered owners of a vehicle to black out or obscure the residence address, business address, mailing address or vehicle address shown on registration card and on proof of insurance (or other current proof of compliance). This will reduce risk of additional loss in case of vehicle theft or break-in.
SB 930 is scheduled for a work session in the House Transportation Policy Committee on Wednesday, May 31.
Free Dental Care for Veterans: June 24
Veterans will receive free dental care on Saturday, June 24, when dentists and their teams from Aspen Dental-branded practices open their doors for a National Day of Service. Interested veterans should call 1-844-AspenHMM to find a participating practice in their community and to schedule an appointment in advance. Participating practices include Aspen Dental locations in Eugene and Roseburg.
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