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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.

Confirmed Cases: 21488

Reported Deaths: 357
CountyConfirmedDeaths
Multnomah496096
Washington311925
Marion293870
Umatilla230228
Clackamas154940
Malheur80414
Deschutes61110
Lane5903
Jackson4732
Yamhill46713
Lincoln4189
Union3942
Morrow3723
Jefferson3714
Polk31912
Linn28410
Klamath2012
Hood River1930
Wasco1923
Benton1696
Douglas1511
Josephine1152
Columbia970
Coos910
Clatsop850
Crook491
Baker400
Tillamook340
Lake320
Wallowa191
Sherman160
Curry150
Harney100
Gilliam40
Grant40
Unassigned00
Wheeler00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 574231

Reported Deaths: 10476
CountyConfirmedDeaths
Los Angeles2105434998
Riverside41983820
Orange40527726
San Bernardino36072546
San Diego32975594
Kern24440171
Fresno17846171
Alameda13631209
San Joaquin12864223
Santa Clara12694205
Sacramento12040177
Tulare10862196
Stanislaus10264169
Imperial9693244
Contra Costa9404139
Ventura863492
San Francisco762367
Santa Barbara670469
San Mateo6318120
Merced573670
Monterey544635
Marin540481
Kings445356
Solano427441
Sonoma367047
Madera246339
Placer231922
San Luis Obispo225416
Yolo183444
Santa Cruz12436
Butte12388
Napa107411
Sutter9527
San Benito7654
El Dorado7552
Lassen6830
Yuba6464
Mendocino47210
Shasta45910
Colusa3914
Glenn3603
Nevada3571
Humboldt2864
Tehama2761
Lake2402
Amador1822
Mono1581
Tuolumne1553
Calaveras1471
Inyo1063
Siskiyou1020
Del Norte1000
Mariposa622
Plumas360
Modoc50
Trinity50
Sierra40
Alpine20
Unassigned00
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