Oregon Gov. Kate Brown said she will be making some tough calls in the budget she proposes Dec. 1.

PHOENIX - Worrisome signs remain for the Oregon economy ahead of Gov. Kate Brown's budget proposal Dec. 1, necessitating cuts, the state’s chief executive said.

The Oregon Office of Economic Analysis released its latest revenue projections Nov. 16, striking an optimistic tone despite a slowdown in personal income growth and signs of manufacturing weakness. General fund revenue has slowed but not by enough to seriously impact existing general fund expectations, according to the newest report.

General Fund revenues for the 2015-17 biennium are expected to reach $18 billion, an increase of $14.6 million from the September 2016 forecast, and an increase of $1.9 billion relative to the 2013-15 biennium. General Fund revenues for the 2015-17 biennium are now expected to come in $8 million above the forecast at the close of the legislative session.

As previous incarnations of the report have noted, demographic shifts in the labor force seem likely to pressure Oregon’s and other states’ revenue streams over the next decade or so.

“Revenue growth in Oregon and other states will face considerable downward pressure over the 10-year extended forecast horizon,” according to the forecast. “As the baby boom population cohort works less and spends less, traditional state tax instruments such as personal income taxes and general sales taxes will become less effective, and revenue growth will fail to match the pace seen in the past.”

Brown, who won election in her own right this month after ascending to the governorship following the resignation of John Kitzhaber, noted some positives in the forecast but acknowledged that her administration will have some tough budget choices to make.

"On the positive side, job growth is higher and unemployment is lower than the national average and Oregon's economy remains stable overall,” Brown said. “However, our obligations to fund important services such as public education and health care still exceed available revenues, and, looking ahead, there will be some very tough budget choices to make.

“The 2017-19 budget I propose on Dec. 1 will reflect my top priority — investing in kids and lifting families out of poverty — but will necessarily include a level of program cuts I find unacceptable,” she continued. “I have begun discussions with legislative leadership about working together in the upcoming session to better align state resources with our aspirations for a stronger, better Oregon."

 

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