November 19, 2008
Author: CFM Staff
The latest quarterly economic forecast released today confirms what most Oregon political leaders feared – state tax revenues are dropping as the recession tightens its grip nationwide. The forecast projects a $184 million drop in revenue in the current biennium and a drop approaching $1 billion in 2009-2011. The worst may not be over yet.
State economists predict more job losses in the last quarter of this year and continuing into 2009. Fewer people working means less income and lower income tax revenues for the state.
Senator Bruce Starr, R-Hillsboro, said his experience dealing with the recession earlier this decade suggests even deeper revenue declines may lie ahead. "We could be looking at the loss of another $1 billion," he said.
Until now, the national recession has only grazed Oregon. But the downturn has cast a larger shadow in recent weeks, culminating in news earlier this week that Oregon's jobless rate shot up to 7.3 percent. Job losses span the entire Oregon economy, with plant layoffs in paper mills and furloughed architects and design engineers, as credit markets remain tight and consumers slap shut their wallets.
Senate President Peter Courtney, D-Salem, responded to the grim revenue news today by declaring, "The 2009 session started today. We can't afford to wait two more months to go to work addressing this budget crisis." He implored fellow lawmakers to "roll up our sleeves and begin finding ways to close those budget gaps. We can't just tax our way out of it and we can't just cut our way out of it."
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