The State’s quarterly revenue forecast was released on September 23 in a joint meeting of the House Committee on Revenue and Senate Committee on Finance and Revenue.

State Economist, Mark McMullen from the Oregon Office of Economic Analysis (OEA) presented updates to the committees noting the revenue forecast was “very surprising.”

While 2020 the unemployment rate matches that of 2010, the depth of the great recession, revenue projections are up $2 billion (8.6 percent) more than projected in the June forecast. State General Fund and Lottery resources are up $474 million (1.9 percent) from the 2019 close of session estimate.  

Broadly, among the factors changing this forecast were:

  • Timing of personal income tax payments due to the July 15 extension, many earners did exceptionally well;
  • The labor market is in bad shape, but not as bad as initially projected. Projections were based on the initial unemployment claims- an initial forecast anticipated 21 percent job loss and four year recovery. The actual job loss is 14 percent, with a new forecast of a three year recovery; and
  • An unprecedented amount of federal resources were infused into Oregon’s economy ($14 billion) through the Coronavirus Aid, Relief, and Economic Securities (CARES) Act.

Despite the surprising increase in current revenues, the impacts of the recession have not yet hit the State’s coffers, and the negative impacts of the most significant recession in Oregon history should not be discounted. While the 21-23 biennium is expected to have more revenue than anticipated, this surge to the budget will not be enough to cover the projected $4.4 billion dollar revenue shortfall the state will soon have to face.

To view the forecast summary, click here.

Contributed by: Megan Chuinard | Public Affairs Associate