State revenues have continued their upward trend in the second quarter revenue forecast presented by the Office of Economic Analysis.

Highlighted during the May 18 meeting of the House and Senate committees on revenue, the state exceeded revenue projections of combined net General Fund and Lottery Fund resources by $2.392 billion (7.9 percent) from the March 2022 forecast.

What does this mean for Oregonians? 

Due to Oregon’s unique kicker law, the state anticipates a potentially record-breaking personal kicker of over $3 billion in the spring of 2024, which state economists describe as “shocking.”

Tax season payments will come in at more than $1.2 billion over the last year. Economists note  that the surge in income tax collections was not unique to Oregon, though the rate of growth was significant as the typical state saw only about half of Oregon’s rate of growth.

Per the Office of Economic Analysis May Revenue Forecast, “the threshold for the kicker calculation is if revenues over the entire biennium are more than two percent above the Close of Session forecast made prior to the start of the biennium. If they are, the entire amount of revenues above the Close of Session – including the first two percent – are returned to taxpayers the following year.”

The projected corporate kicker means a dedicated $931 million to K-12 education spending in the 2023-25 biennium.

Looking forward

While revenues boom, economists cautioned the risk of recession is on the rise.

Because the state’s newfound revenue growth has largely been driven by nonwage sources of income, economists warn the increased revenue payments to state coffers are likely temporary. Economists suggest “taxpayer behavior also puts Oregon’s revenues at risk of the sharp declines experienced after asset market corrections in 2001 and 2007.”

Economic risks cited include inflation and current labor market trends, among additional factors.

Oregon Office of Economic Analysis presentation to the legislative committees on revenue can be found here.

Additional information from the Oregon Office of Economic Analysis can be found here, including the full forecast.

A summary of the revenue forecast from the Legislative Revenue Office can be found here.

Contributed by: Megan Chuinard | Public Affairs Associate