May 18, 2017
May 18, 2017
May Forecast Brings More Revenue, Little Clarity
Since February, May 16 has been circled on Legislative calendars as the day budget talks would turn the corner and head down the stretch. The last forecast before the end of the 2017 Session would provide clarity, telling Legislators how much money they could spend in the next biennium. In particular, it would indicate whether revenues had exceeded projections enough to trigger “kicker” refunds to taxpayers.
As it turned out, the forecast probably raised as many questions as it answered. Economists currently project a kicker of $408 million. Even with a kicker, the state still will have $187 million more than originally projected, reducing the gap between the cost of current services and expected revenues to $1.4 billion.
News of the reduced budget gap and likely kicker deflected attention from other aspects of the revenue forecast. These points deserve Legislators’ attention:
Legislators can’t afford to ignore the warnings that lie beneath the headlines of the revenue forecast. If Oregon struggles to balance a budget during the best of times, it’s scary to imagine what will happen during the worst of times. And no approach to tax reform will work without tangible steps to slow expenses such as pension and health care costs that grow faster than revenues under all types of economic conditions.
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