PORTLAND, Ore. (KOIN) – Oregonians could see a higher state revenue and kicker in the next budget cycle, according to a new forecast from Oregon's Office of Economic Analysis.
According to the office, this forecast took a different analytical approach compared to past reports after Carl Riccadonna took over as State Chief Economist in September.
The economic office explained that past forecasts “deviated significantly from actual tax collections," but after adjusting the personal income tax model and showing a tighter alignment between the Oregon revenue forecast with national economic trends, the latest forecast shows a heftier state revenue and kicker for Oregonians.
The December 2024 Oregon Economic and Revenue forecast, released Wednesday, shows the General Fund reaching $37.8 billion in the 2025-27 biennium -- increasing by $2.27 billion.
The personal kicker is expected to reach $1.79 billion, which will be included as a credit on Oregonians’ 2025 tax returns. The corporate kicker is expected to reach $1,024.5 million and will be retained in the General Fund and spent on education in the next biennium, the economic office found, noting Oregon's economy is “demonstrating moderate health.”
While Oregon is projected to see revenue growth, the economic office said projections on how policy under the incoming Trump administration will impact the state's economy is unclear.
"Until the timing and details of the next administration’s priorities are more clearly defined, it is prudent to say that medium-term economic tail risks have increased; or put another way, the potential distribution of outcomes relative to pre-election projections has widened," the forecast said.
The report adds that tariffs will be “extremely consequential to key industrial pillars of the Oregon economy, including timber, agriculture, tech/semiconductors and apparel.”
While showing optimism for the state of Oregon's economy, Governor Tina Kotek is also warning about potential revenue changes at the federal level, presenting “unknown” impacts to the state.
“This forecast calls for state leaders to stay the course on core programs and act strategically on issues of top concern for Oregonians. While Oregon’s economy is strong, unknown federal impacts are on the horizon. We must build on the progress we’ve made on housing and homelessness, behavioral health and education while fighting to protect Oregon values. These challenges don’t lend themselves to quick fixes or shortcuts, and real progress requires persistence and focus,” Kotek said.
Oregon House Speaker Julie Fahey (D-West Eugene, Veneta) echoed, "Today’s Economic and Revenue Forecast indicates that Oregon’s economy is strong and the worries of a recession have subsided. A healthy economy means we can continue delivering for working families and maintain critical investments in priorities like housing, addiction treatment, and public safety."
“The state economists have an obligation to accurately estimate revenue levels so that the legislature can invest in key services that Oregonians rely on. With this forecast heading into the upcoming legislative session, the legislature now has the information it needs to begin crafting a balanced budget that funds Oregonians’ top priorities," Fahey continued.
She cautioned, “Although the current forecast is strong and our reserves are healthy, potential changes at the federal level create uncertainty. Oregonians should know that even if there is instability at the federal level, here in Oregon there are responsible, focused leaders who will be steady hands at the wheel. We are prepared to use available resources to deliver on what Oregonians need most.”
Meanwhile, Oregon Senate Republicans expressed concerns that the updated forecast modeling could reduce the kicker in the future.
“This forecast raises important questions about the accuracy of these projections and their potential impact on taxpayers,” said Senate Republican Leader Daniel Bonham (R-The Dalles). “Oregonians deserve transparency to ensure the system works for them, not just for government budgets.”
State Sen. Lynn Findley (R-Vale), added, “The kicker is the people’s money, and it should remain so,” noting, “While this biennium’s kicker appears secure, changes to the revenue model could lead to smaller refunds in the future, and we need to ensure taxpayers are treated fairly.”
