(The Center Square) — Oregon lawmakers are expected to convene a third special legislative session on the heels of a mixed state revenue report released on Wednesday by state economists.
In its latest report, the Oregon Office of Economic Analysis (OOEA) anticipates that the state’s general fund revenues will grow by a modest 5% over the 2021-23 budget period, placing a record $21.2 billion in state coffers. That number is $69.5 million below the September 2020 forecast.
The office does not expect that number to keep pace with the rising cost of public services.
"Should the baseline outlook come to pass, state resources will have remained roughly unchanged for three budget periods, while Oregon’s population and prices will have continued to grow,” OOEA analysts wrote.
In 2020, Oregon’s population totaled about 4.2 million—or about 10% more than the 3.8 million people who lived in the state in 2010.
Among the report’s more concerning findings is that real personal income in the state fell from $214.9 billion to $205.6 billion between the third and fourth quarters of 2020 alone.
Per capita income, meanwhile, fell from $56,200 to $53,900 during that same period, OOEA analysts found.
OOEA analysts added that while data on business closures is spotty, it found that filings for bankruptcies statewide appear to have flatlined at best.
In October, Oregon’s unemployment rate hovered near the national average at 6.9%.
The report also found that 55,000 Oregonians in October spent at least six months or longer searching for work—more than four times the people seeking work prior to the pandemic.
State legislative action
Oregon House Speaker Tina Kotek, D-Portland, called for Gov. Kate Brown to call a virtual special session next month to pass more emergency aid in lieu of further federal aid.
Kotek said she wanted to see the state pay out a portion of its $100 million in Emergency Fund to fund housing relief as the country waits on further federal aid and a COVID-19 vaccine.
Oregon’s savings accounts remain solid as its Rainy Day and Education Stability Funds are still sitting at $942.3 million and $472.2 million, respectively.
Brown shared such sentiments in a statement on Wednesday. The governor announced $55 million in aid this week for businesses affected by the state’s two-week shutdown with no clear timetable for when businesses will pocket the money.
"What is abundantly clear, however, is that our state—like so many others across the country—needs another round of federal stimulus money,” Brown said. “This is a worldwide public health crisis, and it demands a coordinated, national response. And we simply cannot wait until Congress convenes in January.”
Oregon Senate Minority Leader Fred Girod, R-Stayton, called on Brown to lift the state’s health restrictions to keep businesses afloat and reopen schools so parents could reenter the workforce.
As of Wednesday, the state was seeing a 13.3% average positivity rate statewide, according to the Oregon Health Authority. The death toll from the virus now stands at 788 people.
Oregon is currently on track to reach a daily average of 1,000 new cases per day and saw another 1,099 new COVID-19 cases on Wednesday, the OHA reported.
On the whole, tax revenue still remains strong across the board, the OOEA reported.
Oregon’s corporate tax revenue remains near their record highs. Projected gross revenue is estimated to top out at $1.23 billion for the 2019-2021 period and increase to $2.24 billion by 2021-2023.
Projected personal income tax revenue for the state is a bit more unpredictable, according to OOEA analysts.
Their most optimistic projection put personal income tax revenue at $235.4 million in 2020 and $238.8 million by 2021.
Analysts’ most pessimistic projection placed the state’s personal income tax revenue collections at $231.6 million in 2020 and $229.5 million by 2021.
Cannabis tax revenue is estimated to be $292.2 million for 2019-2021 period.
State lottery revenue, which makes up 5% of the state’s $24 billion budget, is estimated by the OOEA to lose as much as $41 million during Brown’s two-week shutdown, assuming high-risk regions like Multnomah County see shutdowns for two weeks longer.
Leisure and hospitality has already been hit the hardest by the pandemic across the country.
The industry’s national average dropped from 16.6 million workers in 2019 to 13.3 million workers in 2020. In Oregon, industry workers have fallen from 213,300 in 2019 to 163,900 in 2020.
Retail shrunk by 5% in 2020 from 209,800 workers in 2019 to 199,500 workers in 2020.
Health and Education services fared a bit better with a drop of 2.8% from 301,600 jobs in 2019 to 293,300 jobs in 2020.
Mining and logging, which saw 6,900 jobs in 2019, will finish 2020 with approximately 6,600 jobs marking a 5.3% job dip. That number is shy of the 12.8% industry decline nationwide from 700,000 workers to 600,000 workers.
In Oregon, financial services and manufacturing fared much worse than the rest of the country.
The former saw a 2.5% decline from 103,500 financial service workers last year down to 100,800 this year compared to a 0.2% dip nationally.
The latter saw a 7.2% decline compared to the U.S. average of 4.8%, going from 198,100 manufacturers in 2019 to 183,800 in 2020.
While state government job numbers in Oregon have barely budged, local government jobs in Oregon fell to 217,900 workers this year from 229,400 last year.
Local education jobs in Oregon suffered too, dipping to 123,800 workers in 2020 compared to 133,500 in 2019.
OOEA analysts concluded that the state’s economy will likely recover by sometime in 2023, but stressed that estimate is contingent on existing state tax codes, federal aid, and a COVID-19 vaccine all hitting Oregon next year.
The next Oregon Office of Economic Analysis revenue forecast is slated for January.