Strong Oregon Economy Triggers Taxpayer Refund

Revenues in Oregon have soared beyond expectations, according to the state's economic office, which could mean an extra tax credit for taxpayers next year.

Posted: Feb 27, 2019 4:02 PM

By SARAH ZIMMERMAN

SALEM, Ore. (AP) — Revenues in Oregon have soared beyond expectations, according to the state's economic office, which could mean an extra tax credit for taxpayers next year.

The state is forecasted to bring in $20.6 billion by the end of June, which is $147 million and over 4 percent more than what economists originally predicted, according to the state's Economic and Revenue Forecast released Wednesday. But the Legislature will have to return some of that money to taxpayers under the so-called "two percent kicker" law, which refunds excess revenue when the state's coffers are more than 2 percent higher than forecasted.

The Office of Economic Analysis predicts that the Oregon will have to shell out $748 million in kicker payments in the first half of 2020, the largest payout in state history. But given the size of the state's economy, individuals will see a smaller share of that refund - which comes in the form of a personal and corporate income tax credit - than in years past. The average payout to taxpayers is expected to be $367, with those earning $26,300 to $47,800 per year predicted to get $185 in tax credit.

Oregon has financially benefited from a strong U.S. economy, a robust labor market and better-than-expected sales in exports and the state's budding marijuana industry.

"Oregon's economy continues to hit the sweet spot," according to the state's revenue forecast, which is released four times a year. "Even as disparities remain, these gains are seen by all ages and racial or ethnic groups across the state. The feel good part of the economy is here."

This is the last revenue forecast before the Democratically-controlled Legislature will be tasked to come up with a budget addressing the state's affordable housing crisis and chronically underfunded education and pension systems, among other things.

Economic growth has particularly benefited from an influx of in new residents, who have come to the state in search of new opportunities and lower costs of living. More people are working for higher pay, and state's median household income is now on par with the rest of the nation--the first time that's happened since the 1980s.

The state's also remained largely insulated from President Donald Trump's ongoing trade disputes. Oregon's economy largely depends on exports, with its biggest customers being China and Canada. But its main products, including electrical and industrial machinery, haven't yet been touched by tariffs.

And the recreational marijuana market, made legal in 2014, has provided a steady stream of revenue. That's especially surprising given that an oversupply of marijuana has led to plummeting prices, which means the state is taking in less money per item sold. More Oregonians admit to smoking marijuana than cigarettes, and the state has the highest population of adults in the nation who admit to regular marijuana usage.

But although the state's economy may currently be riding high, economists also warn that the good times won't last forever. Job growth is slowing, and the state doesn't have enough housing to keep up with population growth--which has led to skyrocketing housing prices and could dampen growth in the future.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 309841

Reported Deaths: 3569
CountyCasesDeaths
Multnomah50840642
Washington34683272
Marion32181388
Clackamas26315270
Lane23632246
Jackson20753255
Deschutes16401100
Umatilla12552125
Douglas10599185
Linn1030285
Josephine8536163
Yamhill737299
Klamath637891
Polk617770
Malheur475867
Benton454027
Coos406469
Columbia320237
Jefferson310446
Lincoln272829
Union266036
Wasco236739
Crook212137
Clatsop210225
Tillamook179623
Baker171920
Morrow166621
Curry166317
Hood River161635
Harney77115
Grant7538
Lake6608
Wallowa50111
Gilliam1364
Sherman1283
Wheeler651
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4636268

Reported Deaths: 67966
CountyCasesDeaths
Los Angeles144412725849
Riverside3575584802
San Diego3492274006
San Bernardino3468955501
Orange3135295354
Sacramento1498662070
Santa Clara1403871841
Fresno1356471889
Kern1343971515
Alameda1160681320
Ventura976231120
San Joaquin971621615
Contra Costa95595924
Stanislaus800341229
Tulare72812896
San Mateo52172607
San Francisco51808605
Monterey49445565
Solano44061312
Santa Barbara43065500
Sonoma39376376
Merced39279535
Placer36390364
Imperial34235755
Kings30038285
San Luis Obispo28273313
Madera21672258
Butte21205230
Shasta20647276
Santa Cruz20134211
Yolo19118239
Marin17080242
El Dorado15964127
Sutter13055153
Napa1224695
Yuba923461
Nevada845685
Humboldt826284
Tehama821184
San Benito708567
Mendocino681971
Lassen636827
Tuolumne612593
Lake601087
Amador489759
Glenn396430
Siskiyou388841
Calaveras339366
Del Norte334234
Colusa290718
Inyo166239
Mono14935
Plumas12336
Mariposa96712
Trinity71910
Modoc6278
Sierra1980
Unassigned1180
Alpine1000
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