State of Oregon's quarterly economic and revenue forecast release. Still no personal income tax kicker in the baseline, however the threshold is razor thin with one income tax filing season to go. There is a corporate kicker in the forecast, which will be dedicated to education next biennium. This forecast also forms the base of the Governor's Recommended Budget for the 2015-17 biennium.
Oregon Economic and Revenue Forecast, December 2014
1. OFFICE OF ECONOMIC ANALYSIS
Economic and Revenue Outlook: December 2014
November 13th, 2014
Oregon Office of Economic Analysis
Mark McMullen
Josh Lehner
9. OFFICE OF ECONOMIC ANALYSIS
Back to the Future: 1980’s Revisited
9
0%
5%
10%
15%
20%
25%
1978 / 2005
1981 / 2008
1984 / 2011
1987 / 2014
Severe Recessions in Oregon
Early 80s U-6
Early 80s U-3
Great Recession U-3
Great Recession U-6
1978
1981
1984
1987
1990
-
10,000
20,000
30,000
40,000
50,000
-
10,000
20,000
30,000
40,000
50,000
2005
2008
2011
2014
2017
Oregon's Housing Bust Replay
Early 80s
Housing Bubble
1973-2007 Avg
10. OFFICE OF ECONOMIC ANALYSIS
Job Growth Spreads to More Regions
10
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
2007
2009
2011
2013
2015
Uneven Recovery Across Oregon
Employment Relative to Pre-recession Peak
Portland
Oregon
Bend, Corvallis, Eugene
Medford, Salem
Outsideof
Metropolitan
Areas
11. OFFICE OF ECONOMIC ANALYSIS
Oregon Job Growth Picking Up
•Big cities performing best
•Second tier metros now surging
•Rural Oregon slowly improving along with housing and government
11
-8%
-6%
-4%
-2%
0%
2%
4%
Jan-06
Jan-08
Jan-10
Jan-12
Jan-14
Oregon Employment: Metro and Nonmetro
Year-over-Year Change
Portland
Bend, Corvallis, Eugene, Medord, Salem
Nonmetro
14. OFFICE OF ECONOMIC ANALYSIS
Forecast Evolution: No More Wiggle Room
14
$15.5
$15.6
$15.7
$15.8
$15.9
$16.0
$16.1
$16.2
$16.3
$14.2
$14.3
$14.4
$14.5
$14.6
$14.7
$14.8
$14.9
$15.0
Dec '10
Dec '11
Dec '12
Dec '13
Dec '14
Billions
Billions
2013-15 BN Personal Kicker Base
$29 Million
-$259 Million
<--2% Kicker Threshold
Expenditures-->
<--COS Forecast
15. OFFICE OF ECONOMIC ANALYSIS
Extension Filers Weigh On Personal Income Tax Collections
15
0%
2%
4%
6%
8%
10%
12%
14%
Oct
Nov
Dec
Jan2014
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Recent Personal Income Tax Collections
% change over year ago, 3 month moving sum
Preliminary
16. OFFICE OF ECONOMIC ANALYSIS
16
Strong Response to 2013 Federal Tax Increase
-30%
-20%
-10%
0%
10%
20%
30%
40%
Schedule E
Capital Gains
Dividends
Business Income
Taxable IRAs
Total Income
Growth Across Matched Tax Returns: Filers Affected by Measure 66
2012
2013
20. OFFICE OF ECONOMIC ANALYSIS
Corp Collections Stall, but “Kicker” Payment to Schools Still Predicted
20
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Oct
Nov
Dec
Jan2014
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Corporate Excise Tax Collections
% change year ago, 3 month moving sum
Preliminary
21. OFFICE OF ECONOMIC ANALYSIS
Video Lottery: Fall Bump in Sales Unexpectedly Returns in FY2015
21
$10
$11
$12
$13
$14
$15
$16
$17
$18
$19
J
A
S
O
N
D
J
F
M
A
M
J
Millions
Month in Fiscal Year
Video Lottery Sales
4 Week Moving Average
2008
2007
2006
2010-14
2015
22. OFFICE OF ECONOMIC ANALYSIS
(Millions)
2013 COS
Forecast
September 2014
Forecast
December 2014
Forecast
Change from
Prior Forecast
Change from
COS Forecast
Structural Revenues
Personal Income Tax $13,558.2 $13,851.4 $13,832.9 -$18.5 $274.7
Corporate Income Tax $1,056.6 $1,046.7 $1,060.4 $13.7 $3.8
All Other Revenues $1,027.9 $1,003.5 $1,019.1 $15.6 -$8.7
Gross GF Revenues $15,642.6 $15,901.6 $15,912.4 $10.8 $269.8
Offsets and Transfers -$120.8 -$72.6 -$73.2 -$0.5 $47.7
Administrative Actions1 -$18.2 -$12.7 -$3.3 $9.3 $14.9
Legislative Actions -$136.9 -$136.7 -$136.7 $0.0 $0.2
Net Available Resources $15,910.1 $16,166.4 $16,174.8 $8.4 $264.7
Confidence Intervals
67% Confidence +/- 3.2% $502.1
95% Confidence +/- 6.3% $1,004.3
1 Reflects cost of cashflow management actions, ex clusiv e of internal borrowing.
2013-15 General Fund Forecast Summary
$15.41B to $16.41B
$14.91B to $16.92B
Table R.1
22
December 2014 General Fund
Forecast Summary
Positive
Factor
Negative
Factor
Corporate
Excise Tax:
Strong
Collections in
Early Fall
Personal
Income
Taxes:
2013
Extension
Filers
Estate Taxes Court Fees
Interest
Savings
Beginning
Balance
Reconciliation
Video Lottery
Sales
23. OFFICE OF ECONOMIC ANALYSIS
Effective Reserves
23
0%
1%
2%
3%
4%
5%
6%
7%
8%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
99-01 BN
01-03 BN
03-05 BN
05-07 BN
07-09 BN
09-11 BN
11-13 BN
FY14
FY15
15-17 BN
17-19 BN
Oregon’s Budgetary Reserves ($millions)
General Fund Ending Balance
Education Stability Fund
Rainy Day Fund
Percent of General Fund, rhs
24. OFFICE OF ECONOMIC ANALYSIS
24
24
Forecast ChangesDifference from September Forecast, $ millions
18.967.4121.2264.2378.9-$150-$100-$50$0$50$100$150$200$250$300$350$400$450$5002013-152015-172017-192019-212021-23PersonalCorporateLotteryOtherTotal
25. OFFICE OF ECONOMIC ANALYSIS
25
10-Year Forecast
Table R.2General Fund Revenue Forecast Summary (Millions of Dollars, Current Law) ForecastForecastForecastForecastForecastForecast2011-13%2013-15%2015-17%2017-19%2019-21%2021-23% Revenue SourceBienniumChgBienniumChgBienniumChgBienniumChgBienniumChgBienniumChgPersonal Income Taxes12,118.2 15.8%13,832.9 14.1%15,636.6 13.0%17,145.0 9.6%19,047.7 11.1%21,134.7 11.0% Corporate Income Taxes883.9 6.8%1,060.4 20.0%1,080.0 1.8%1,043.2 -3.4%1,078.4 3.4%1,156.4 7.2% All Others1,153.9 -5.9%1,019.1 -11.7%1,003.4 -1.5%1,040.3 3.7%1,118.0 7.5%1,184.9 6.0% Gross General Fund14,156.0 13.1%15,912.4 12.4%17,720.0 11.4%19,228.4 8.5%21,244.1 10.5%23,476.1 10.5% Offsets and Transfers(12.0) (73.2) (104.7) (101.7) (39.6) (42.7) Net Revenue14,144.0 13.0%15,839.2 12.0%17,615.3 11.2%19,126.8 8.6%21,204.4 10.9%23,433.4 10.5% Other taxes include General Fund portions of the Eastern Oregon Severance Tax, Western Oregon Severance Tax and Amusement Device Tax. Commercial Fish Licenses & Fees and Pari-mutual Receipts are included in Other Revenues
27. OFFICE OF ECONOMIC ANALYSIS
27
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:
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@OR_EconAnalysis