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New Economic Forecast Due Out Friday
August 29, 2007
Author: CFM Staff
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Lawmakers will see the latest quarterly economic forecast this Friday, with indications that previous forecasts still hold. It is likely there will be slightly higher revenue estimates for personal and corporate tax collections and the Oregon Lottery.
Despite turmoil in the stock and bond markets, Oregon's economy - at least as reflected by state income tax revenues - appears to be humming along. But Legislative Revenue Officer Paul Warner cautions that tax revenues and underlying economic conditions aren't always in perfect sync.
"The recession of 2002 taught us," Warner says, "that tax revenue from income can decline far worse than economic performance would indicate."
The opposite is also true, which may be what is happening now. Warner notes that federal income tax collections, like Oregon's, continue to remain strong despite worries about mortgage debt - and even a growing national budget deficit.
While tax collections stay on a positive trend line, Warner says there may be a higher degree of anxiety that capital gains and Schedule E tax receipts could drop eventually as a result of the bond market morass.
One detail that will emerge Friday is the revenue base line for the personal and corporate kickers this biennium.
Friday's joint hearing between the House and Senate interim Revenue committees also will feature the debut of Senator Ginny Burdick, D-Portland, as chair of the Senate Revenue Committee. She is replacing Senator Ryan Deckert, D-Beaverton, who is expected to resign around October 1 to become the head of the Oregon Business Association.
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