Contributed by: Gil Riddell, Policy Director, Governance
June 3, 2016
The House and Senate Revenue Committees received the June, 2016, Revenue and Economic Forecast from the Oregon Office of Economic Analysis on June 3rd. Briefly, goods-producing sectors (construction, natural resources, manufacturing) are expected to grow significantly slower; Intel layoffs will contribute to a drop in previously forecasted high tech employment; and Oregon housing starts will see modest growth in spite of the low housing supply.
On the revenue side, general fund and lottery resources are up $123.2 million (0.6%) from the 2015 close-of-session estimate. Of particular interest to counties, lottery revenues continue to climb; projected 2015-17 revenues up $37.2 million (3.1%) from the February 2016 forecast.
[Recall that in the 2016 session AOC pushed for a change in the legislature’s treatment of counties’ 2.5% share of video lottery revenue from a fixed amount based on the 2015 close-of-session forecast to 2.5% of the actual revenues received. Our argument was based on the significant projected growth of that resource. Based on the February 2016 revenue forecast, the adjustment to the allocation to counties would have been plus $1,752,921. With this latest jump in the forecast of lottery resources – of which video lottery is a large portion – of $37.2 million/3.1%, the AOC argument becomes considerably stronger].
The current forecast implies a corporate kicker, which would mean $32.3 million to be dedicated to K-12 education spending in 2017-1