Quarterly Forecast Nuggets Buried in Plain Sight

Media coverage of Oregon’s quarterly economic and revenue outlook tends to focus on whether net state revenues have gone up or down since the last forecast. But that overlooks a lot of other interesting nuggets mined by the state economists who generate the report.

Media coverage of Oregon’s quarterly economic and revenue outlook tends to focus on whether net state revenues have gone up or down since the last forecast. But that overlooks a lot of other interesting nuggets mined by the state economists who generate the report.

Oregon’s quarterly economic and revenue outlook grabs headlines, usually related to whether net state revenue has gone up or down. But the outlook contains lots of interesting nuggets that generally go unreported, but are easily mined.

Here are some of those interesting nuggets generated by the Oregon Office of Economic Analysis:

  • While Oregon has a projected 2017-2019 biennial budget hole, the state also will have approximately $1.5 billion in budgetary reserves.  The two largest chunks of reserves are locked in the Rainy Day Fund and the Education Stability Fund, which are intended to fill in budget gaps during economic downturns.
  • Despite all the talk about a wall on the Mexican border, the outlook says Mexican-born Oregon residents has declined to 5,000 since 2009, down from 55,000 in both the 2000s and 1990s.
  • The outlook lists immigration migration as a risk factor to Oregon’s economy, but notes the 388,692 foreign-born Oregon residents constitute less than 10 percent of the state’s population, compared to foreign-born residency in the United States stands at 13.2 percent.
  • Federal policy is also listed as a risk factor. Risks noted included rising interest rates, tax changes, deregulation, federal lands, trade wars and the status of the Affordable Care Act or its replacement.
  • Oregon employment has continued to grow since the start of 2010. Job growth so far in 2016 is highest along I-5 from Salem south to Medford. The percent of job growth in non=metropolitan areas now has caught up with the Portland metropolitan area.
  • Monthly statewide job growth since 2011 peaked at slightly more than 6,000 in the first part of 2016. State economists predict monthly job growth will hover at or above 4,000 into 2018, then taper off in 2019 to 2,000 jobs.
  • Oregon is in the top 10 states in terms of per capita federal Medicaid grants, which in FY 2016 total $1,895, making the state more vulnerable to proposed Obamacare changes that would reduce subsidies.
  • One chart in the outlook underscores why rural parts of Oregon that are timber-dependent have continued to suffer economically. The chart shows timber harvest rates in the 1970s compared to the current decade. On federal lands, current harvests are 88 percent lower. Timber cuts on private lands are 22 percent lower. Harvests on state and local lands are up 35 percent.
  • Estate taxes are by their very nature unpredictable. From 2001 to 2015, the largest monthly spikes topped out at $20-$23 million. However, two recent months spiked to between $40-$48 million.
  • State revenues from marijuana sales during 2016 totaled $60 million, which was slightly more than the $59 million derived from snuff and $209 million from cigarettes. The comparative totals are interesting because the effective tax rate on marijuana is substantially less than on cigarette and other tobacco products.