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OFFICE OF ECONOMIC ANALYSIS
Economic and Revenue Outlook:
September 2015
August 26th, 2015 Oregon Office of Economic Analy...
OFFICE OF ECONOMIC ANALYSIS
Recent Economic
Performance
2
OFFICE OF ECONOMIC ANALYSIS
Expansions Do Not Die of Old Age
3
0 2 4 6 8 10 12
1945
1949
1954
1958
1961
1970
1975
1980
198...
OFFICE OF ECONOMIC ANALYSIS
Slower Chinese Growth, At Best
(Global growth slowing as well, not just China)
4
0%
2%
4%
6%
8...
OFFICE OF ECONOMIC ANALYSIS
Terms of Trade Make Oregon/US
Products More Expensive
5
70
80
90
100
110
120
130
140
150
160
1...
OFFICE OF ECONOMIC ANALYSIS
Stocks and Capital Gains
6
1
2
3
4
5
6
7
8
9
10
1995 1997 1999 2001 2003 2005 2007 2009 2011 2...
OFFICE OF ECONOMIC ANALYSIS
Oregon Economy
7
OFFICE OF ECONOMIC ANALYSIS
Traditional Advantage Regained
8
-8%
-6%
-4%
-2%
0%
2%
4%
6%
1985 1995 2005 2015
Total Nonfarm...
OFFICE OF ECONOMIC ANALYSIS
Oregon Continues to Improve
(Even with Unemployment Rate Wiggles)
9
OFFICE OF ECONOMIC ANALYSIS
Significant Progress Being Made
10
OFFICE OF ECONOMIC ANALYSIS
Incomes Rising as a Result
11
OFFICE OF ECONOMIC ANALYSIS
Yet Participation Gap Remains Large
12
OFFICE OF ECONOMIC ANALYSIS
Rural Recovery is Real, Albeit Slow
13
-10%
-8%
-6%
-4%
-2%
0%
2%
07 09 11 13 15
Oregon and th...
OFFICE OF ECONOMIC ANALYSIS
Outlook: Near-Term Strong,
Long-Term Weak
14
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Jan-60 Jan-70 ...
OFFICE OF ECONOMIC ANALYSIS
Revenue Outlook
15
OFFICE OF ECONOMIC ANALYSIS
$402 Million Kicker: What Is Your
Cut?
16
* Based on 2013 actual tax returns
** Based on 2013 ...
OFFICE OF ECONOMIC ANALYSIS
2015-17 Forecast Evolution
17
OFFICE OF ECONOMIC ANALYSIS
Filing Season Was Not As Big As It
First Appeared
18
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Jan
20...
OFFICE OF ECONOMIC ANALYSIS
Corp Collections Flatline…
19
-50%
-25%
0%
25%
50%
75%
100%
125%
150%
Jan
2014
Feb Mar Apr May...
OFFICE OF ECONOMIC ANALYSIS
…but Remain Inflated
20
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2000...
OFFICE OF ECONOMIC ANALYSIS
Lottery: Consumers Feeling More
Confident with Disposable Income?
21
-10% -5% 0% 5% 10%
Atlant...
OFFICE OF ECONOMIC ANALYSIS
2222
Forecast Changes
Difference from May Forecast, $ millions
-56
186.7
66.8
-75.4
-93.8
-$15...
OFFICE OF ECONOMIC ANALYSIS
23
10-Year Forecast
Table R.2
General FundRevenue Forecast Summary (Millions of Dollars, Curre...
OFFICE OF ECONOMIC ANALYSIS
2424
Biennial Revenue Growth
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Personal Income Taxes Total G...
OFFICE OF ECONOMIC ANALYSIS
25
For More Information
Standard Contact:
155 Cottage Street NE
Salem, OR 97301
(503) 378-3405...
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Oregon Economic and Revenue Forecast, September 2015

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Presentation to the Oregon Legislature on the latest economic and revenue outlook for the State of Oregon. Overview of the U.S. and international economic landscape in addition to what is happening in Oregon. Tax revenue tracking and outlook for personal income taxes, corporate income taxes and Lottery sales.

Published in: Economy & Finance
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Oregon Economic and Revenue Forecast, September 2015

  1. 1. OFFICE OF ECONOMIC ANALYSIS Economic and Revenue Outlook: September 2015 August 26th, 2015 Oregon Office of Economic Analysis Mark McMullen Josh Lehner
  2. 2. OFFICE OF ECONOMIC ANALYSIS Recent Economic Performance 2
  3. 3. OFFICE OF ECONOMIC ANALYSIS Expansions Do Not Die of Old Age 3 0 2 4 6 8 10 12 1945 1949 1954 1958 1961 1970 1975 1980 1982 1991 2001 2009* Expansion Length, Years Postwar U.S. Expansions * Current expansion through August 2015 Source: NBER, Oregon Office of Economic Analysis Post WWII Avg 58 Months Last 3 Expansion Avg 95 Months -2% 0% 2% 4% 6% Jan-80 Jan-90 Jan-00 Jan-10 Expansions End After Overheating Percentage point difference between actual unemployment rate and full employment rate Source: BLS, CBO, Oregon Office of Economic Analysis Full Employment
  4. 4. OFFICE OF ECONOMIC ANALYSIS Slower Chinese Growth, At Best (Global growth slowing as well, not just China) 4 0% 2% 4% 6% 8% 10% 12% 14% 16% 2000 2005 2010 2015 2020 Chinese GDP Growth Inflation-adjusted, annual Source: IMF, Oregon Office of Economic Analysis Forecast -->
  5. 5. OFFICE OF ECONOMIC ANALYSIS Terms of Trade Make Oregon/US Products More Expensive 5 70 80 90 100 110 120 130 140 150 160 170 Jan-95 Jan-00 Jan-05 Jan-10 Jan-15 Trade-Weighted Dollar Indexes 1996 = 100 Source: Federal Reserve, Oanda, Oregon Office of Economic Analysis Oregon U.S. Major Currency
  6. 6. OFFICE OF ECONOMIC ANALYSIS Stocks and Capital Gains 6 1 2 3 4 5 6 7 8 9 10 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Oregon Realizations of Capital Gains, $ billions September 2015 Forecast May 2015 Forecast
  7. 7. OFFICE OF ECONOMIC ANALYSIS Oregon Economy 7
  8. 8. OFFICE OF ECONOMIC ANALYSIS Traditional Advantage Regained 8 -8% -6% -4% -2% 0% 2% 4% 6% 1985 1995 2005 2015 Total Nonfarm Employment Year-over-Year Percent Change Oregon U.S. Source: BLS, Oregon Employment Department, Oregon Office of Economic Analysis
  9. 9. OFFICE OF ECONOMIC ANALYSIS Oregon Continues to Improve (Even with Unemployment Rate Wiggles) 9
  10. 10. OFFICE OF ECONOMIC ANALYSIS Significant Progress Being Made 10
  11. 11. OFFICE OF ECONOMIC ANALYSIS Incomes Rising as a Result 11
  12. 12. OFFICE OF ECONOMIC ANALYSIS Yet Participation Gap Remains Large 12
  13. 13. OFFICE OF ECONOMIC ANALYSIS Rural Recovery is Real, Albeit Slow 13 -10% -8% -6% -4% -2% 0% 2% 07 09 11 13 15 Oregon and the Great Recession Employment Change From Peak Urban Oregon Rural Oregon Data: Seasonally-Adjusted, 3 Month Average, Latest data point: June 2015 Source: Oregon Employment Department, Oregon Office of Economic Analysis
  14. 14. OFFICE OF ECONOMIC ANALYSIS Outlook: Near-Term Strong, Long-Term Weak 14 -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Jan-60 Jan-70 Jan-80 Jan-90 Jan-00 Jan-10 Jan-20 Oregon Nonfarm Employment Growth Year-over-Year Percent Change Expansion Average Forecast
  15. 15. OFFICE OF ECONOMIC ANALYSIS Revenue Outlook 15
  16. 16. OFFICE OF ECONOMIC ANALYSIS $402 Million Kicker: What Is Your Cut? 16 * Based on 2013 actual tax returns ** Based on 2013 actual tax returns, PIT kicker amount ($402 million) and the Oregon Office of Economic Analysis’ forecast for tax liability Income Group Adjusted Gross Income* Rough Estimate of Kicker Size** Bottom 20% < $10,200 $10 Second 20% $10,200 - $23,800 $55 Middle 20% $23,800 - $43,800 $125 Fourth 20% $43,800 - $79,900 $235 Next 15% $79,900 - $157,100 $469 Next 4% $157,100 - $336,400 $1,073 Top 1% > $336,400 $4,614 Average $53,900 $244 Median $30-35,000 $124
  17. 17. OFFICE OF ECONOMIC ANALYSIS 2015-17 Forecast Evolution 17
  18. 18. OFFICE OF ECONOMIC ANALYSIS Filing Season Was Not As Big As It First Appeared 18 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Jan 2014 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2015 Feb Mar Apr May June July Recent Personal Income Tax Collections % change over year ago, 3 month moving sum
  19. 19. OFFICE OF ECONOMIC ANALYSIS Corp Collections Flatline… 19 -50% -25% 0% 25% 50% 75% 100% 125% 150% Jan 2014 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May June July Corporate Excise Tax Collections % change year ago, 3 month moving sum
  20. 20. OFFICE OF ECONOMIC ANALYSIS …but Remain Inflated 20 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Corporate Taxes ($ Mil, 12 month sum)
  21. 21. OFFICE OF ECONOMIC ANALYSIS Lottery: Consumers Feeling More Confident with Disposable Income? 21 -10% -5% 0% 5% 10% Atlantic City Pennsylvania New York Racinos Ohio Casinos Colorado Casinos Rhode Island Las Vegas Strip Downtown Vegas Oregon Video Lottery Gaming Revenues Increasing 2015q2 Year-over-Year Growth in Slots/Video Lottery Source: Oregon Office of Economic Analysis
  22. 22. OFFICE OF ECONOMIC ANALYSIS 2222 Forecast Changes Difference from May Forecast, $ millions -56 186.7 66.8 -75.4 -93.8 -$150 -$100 -$50 $0 $50 $100 $150 $200 $250 2013-15 2015-17 2017-19 2019-21 2021-23 Personal Corporate Lottery Other Total
  23. 23. OFFICE OF ECONOMIC ANALYSIS 23 10-Year Forecast Table R.2 General FundRevenue Forecast Summary (Millions of Dollars, Current Law) Forecast Forecast Forecast Forecast Forecast Forecast 2013-15 % 2015-17 % 2017-19 % 2019-21 % 2021-23 % 2023-25 % Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Personal Income Taxes 13,958.3 15.2% 15,718.2 12.6% 17,575.9 11.8% 19,404.5 10.4% 21,364.8 10.1% 23,329.9 9.2% Corporate Income Taxes 1,116.5 26.3% 1,095.5 -1.9% 1,096.1 0.1% 1,110.0 1.3% 1,141.7 2.9% 1,287.6 12.8% All Others 1,030.2 -11.4% 1,186.6 15.2% 1,075.2 -9.4% 1,152.3 7.2% 1,211.8 5.2% 1,264.7 4.4% Gross General Fund 16,105.0 13.7% 18,000.2 11.8% 19,747.2 9.7% 21,666.8 9.7% 23,718.3 9.5% 25,882.3 9.1% Offsets and Transfers (74.2) (43.5) (73.6) (76.4) (80.1) (79.2) Net Revenue 16,030.8 13.3% 17,956.6 12.0% 19,673.6 9.6% 21,590.4 9.7% 23,638.3 9.5% 25,803.1 9.2%
  24. 24. OFFICE OF ECONOMIC ANALYSIS 2424 Biennial Revenue Growth -15% -10% -5% 0% 5% 10% 15% 20% 25% Personal Income Taxes Total General Fund
  25. 25. OFFICE OF ECONOMIC ANALYSIS 25 For More Information Standard Contact: 155 Cottage Street NE Salem, OR 97301 (503) 378-3405 oea.info@state.or.us www.oregon.gov/das/oea Social Media: www.OregonEconomicAnalysis.com @OR_EconAnalysis

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