We are now just over a month into the 2021 Legislative Session. Things continue to all be done virtually and it is becoming more and more difficult as bigger policy issues are beginning to be debated.
Today the Senate Republican’s opted to not participate in the Senate Floor session in protest to how the Governor is administering vaccines and the need to get students in the classroom as soon as possible.
Here is a quick update on the on yesterday’s new revenue forecast for the state.
The state economist delivered the March revenue forecast on the afternoon of 2/24 to the House Committee on Revenue, and it was surprisingly better news than many were expecting. In their words, the economic scarring to date in terms of business closures and permanent layoffs is much better than first feared. Total personal income is higher that it was prior to the pandemic, despite Oregonians having 160,000 fewer jobs. As the pandemic wanes, pent-up demand has the potential to fuel growth in the month ahead. While the lottery forecast is down from the last forecast by about $100m, the new forecast predicts our combined general fund and lottery revenues will come in roughly $642M higher than forecasted in November of last year. In addition, a personal kicker is projected somewhere in the neighborhood of $570M and about $420M is supposed to be dedicated to K-12 Education spending for the 21’-23’ biennium through the corporate kicker. This means the state has now seen an increase of $1.2B since the June 2019 “close of session” forecast which is the foundation for which all the budgets are built. A couple of the factors playing into this strong revenue collections include large amounts of federal aid and asset markets continuing to be strong. Any potential federal dollars received though some sort of an additional spending package would further improve the state’s budgetary picture, however such a scenario remains speculative at this point. At the November 2020 forcast the state was then at a shortfall of current service level of about $1.6B and now the shortfall is down to about $900M.
As always, please reach out with any questions or concerns.
Markee & Associates, Inc
5065 Inland Shores Way #110
Keizer Oregon 97303