Oregon Economic and

Revenue Forecast

March 2018

Volume XXXVIII, No. 1

Release Date: February 16, 2018

Katy Coba Kate Brown Prepared By:

Chief Operating Officer Governor Office of Economic Analysis

DAS Director Department of Administrative Services

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Department of Administrative Services Katy Coba

DAS Director Chief Operating Officer

Office of Economic Analysis

Mark McMullen, State Economist

Josh Lehner, Senior Economist

Kanhaiya Vaidya, Senior Demographer

Michael Kennedy, Senior Economist

http://oregon.gov/DAS/OEA

http://oregoneconomicanalysis.com

http://twitter.com/OR_EconAnalysis

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Foreword

This document contains the Oregon economic and revenue forecasts. The Oregon economic forecast is published

to provide information to planners and policy makers in state agencies and private organizations for use in their

decision making processes. The Oregon revenue forecast is published to open the revenue forecasting process to

public review. It is the basis for much of the budgeting in state government.

The report is issued four times a year; in March, June, September, and December.

The economic model assumptions and results are reviewed by the Department of Administrative Services

Economic Advisory Committee and by the Governor's Council of Economic Advisors. The Department of

Administrative Services Economic Advisory Committee consists of 15 economists employed by state agencies,

while the Governor's Council of Economic Advisors is a group of 12 economists from academia, finance, utilities,

and industry.

Members of the Economic Advisory Committee and the Governor's Council of Economic Advisors provide a two-

way flow of information. The Department of Administrative Services makes preliminary forecasts and receives

feedback on the reasonableness of such forecasts and assumptions employed. After the discussion of the

preliminary forecast, the Department of Administrative Services makes a final forecast using the suggestions and

comments made by the two reviewing committees.

The results from the economic model are in turn used to provide a preliminary forecast for state tax revenues.

The preliminary results are reviewed by the Council of Revenue Forecast Advisors. The Council of Revenue

Forecast Advisors consists of 15 specialists with backgrounds in accounting, financial planning, and economics.

Members bring specific specialties in tax issues and represent private practices, accounting firms, corporations,

government (Oregon Department of Revenue and Legislative Revenue Office), and the Governor’s Council of

Economic Advisors. After discussion of the preliminary revenue forecast, the Department of Administrative

Services makes the final revenue forecast using the suggestions and comments made by the reviewing committee.

Readers who have questions or wish to submit suggestions may contact the Office of Economic Analysis by

telephone at 503-378-3405.

Katy Coba

DAS Director

Chief Operating Officer

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Table of Contents

EXECUTIVE SUMMARY .………………………………………….……...…….…….....…………….. 1

ECONOMIC OUTLOOK ……………………………………………………………….……………….. 2

U.S. Economy ……………………………………………………………..….……………………. 2

Oregon Economy ……………………………………………………………...…………………… 4

Oregon Labor Market …………………………………………….……………..……….............. 6

Leading Indicators ……………………………………………………………..………………….. 9

Short-term Outlook ………………………………………………………………..………………. 10

Forecast Risks ………………………………………………………………..…………............... 13

Alternative Scenarios ………………………………………………………..……………………. 15

Extended Outlook ……………………………………………………………..…………………… 16

Regional Trends ……………………………………………..…………………………………….. 19

State Comparisons ………………………………………………………………………………… 21

REVENUE OUTLOOK ………………………………………………………………………………….. 22

General Fund Revenues, 2017-19 ………………………..…………………………………….. 25

Extended Outlook ………………………………………..………………………………………… 27

Tax Law Assumptions …………………………………..……………………………….............. 27

Alternative Scenarios ……………………………………..………………………………………. 29

Lottery Outlook …………………………………………..……………………………….............. 29

Budgetary Reserves …………………………………..………………………..………............... 32

POPULATION AND DEMOGRAPHIC OUTLOOK ………………………………………………….. 37

APPENDIX A: ECONOMIC …………………………………………………………………………….. 40

APPENDIX B: REVENUE ………………………………………………………………….................. 48

APPENDIX C: DEMOGRAPHIC ………….……………………………………………….................. 62

EXECUTIVE SUMMARY

March 2018

The U.S. economy continues to perform well. Economic growth has picked up in recent quarters and job gains

remain strong enough to pull down the unemployment rate even as more individuals are looking for a job. More

importantly the near-term prospects for economic growth are good. The business cycle is not yet waning. The

tight labor market drives wage growth higher. And as the economy approaches capacity, inflation is set to rise

after five years running below target. From this relatively strong cyclical vantage point, the recently passed Tax

Cut and Jobs Act by the federal government will boost near-term growth even further. However, longer-run

forecasts remain relatively unchanged, in part due to the temporary and expiring provisions in the legislation.

In Oregon, the outlook remains bright as the economy continues to hit the sweet spot. Employment growth is

more than enough to meet population gains and to absorb the workers coming back into the labor market.

Wages are rising faster than in the typical state, as are household incomes. That said, employment and

measures of economic wages have come in below expectations in the second half of 2017. From this somewhat

lower starting point, the modest economic boosts provided by federal tax changes results in a relatively

unchanged forecast overall.

Since the September 2017 forecast, two significant factors have come into play that have changed Oregon’s

General Fund revenue outlook. The first factor, the new federal tax law (Tax Cuts and Jobs Act), stands to reduce

state revenues in the near term, and will boost them in future budget periods. The second factor, a potential

equity market correction, draws down revenues after a short delay.

Oregon’s tax collections are tied to federal tax law both directly and indirectly. The starting point for calculating

Oregon income tax is taxable income from a filer’s federal return. As a result, most federal changes to what is

defined as income, or to what can be deducted or excluded from it, directly feed into Oregon tax collections.

The new 20% federal deduction for pass-through income will feed directly into lower Oregon taxable income,

and reduce Oregon revenues.

Ignoring behavioral responses and other dynamic effects for now, static impact estimates suggest that Oregon’s

General Fund revenues will be reduced by more than $200 million in the current biennium due to TCJA. This

impact reverses during the next decade, increasing revenues by more than $200 million per biennium. Several

provisions contribute to this pattern, including accelerated depreciation (expensing), new inflation factors,

expiring individual provisions and repatriated income from multinational corporations. Due to a quirk in current

tax law, multinational repatriation represents a near-term revenue loss in Oregon rather than a windfall.

These static revenue impact estimates only tell part of the story, however, as households, firms and tax

professionals are all certain to change their behavior in light of the new rules of the game. Many of these

behavioral responses, including the macroeconomic effects, will serve to mute the impact of TJCA on Oregon

General Fund collections. While changes in the timing of tax payments are already evident, it will take some

time before it becomes clear how many taxpayers will change their filing status in light of TJCA provisions.

Finally, Oregon’s General Fund is sensitive to equity prices, given our dependence on personal income taxes. The

performance of equity markets feed into personal and corporate tax liability in many complex ways, but capital

gains are the largest single piece. Although housing wealth is playing a larger role in driving taxable capital gains

during the current business cycle than in the past, earnings and losses in stock markets account for the lion’s

share of movements in taxable capital gains in the typical year.

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ECONOMIC OUTLOOK

Economic Summary

The U.S. economy continues to perform well. Economic growth has picked up in recent quarters and job gains

remain strong enough to pull down the unemployment rate even as more individuals are looking for a job. More

importantly the near-term prospects for economic growth are good. The business cycle is not yet waning. The

tight labor market drives wage growth higher. And as the economy approaches capacity, inflation is set to rise

after five years running below target. From this relatively strong cyclical vantage point, the recently passed Tax

Cut and Jobs Act by the federal government will boost near-term growth even further. However, longer-run

forecasts remain relatively unchanged, in part due to the temporary and expiring provisions in the legislation.

In Oregon, the outlook remains bright as the economy continues to hit the sweet spot. Employment growth is

more than enough to meet population gains and to absorb the workers coming back into the labor market.

Wages are rising faster than in the typical state, as are household incomes. That said, employment and

measures of economic wages have come in below expectations in the second half of 2017. From this somewhat

lower starting point, the modest economic boosts provided by federal tax changes results in a relatively

unchanged forecast overall.

U.S. Economy

The U.S. economy continues to see a healthy data flow. Real GDP growth has been above potential for the past

three quarters, marking the best stretch since 2014. Given employment gains continue to outpace labor force

growth, the unemployment rate is set to decline further. The combination of record-setting job openings, and

faster wage gains due to a tighter labor market are pulling more individuals off the sidelines. Some of these

improvements are masked due to the wave of Baby Boomer

retirements in recent years, however progress is being made.

That said, the economy is likely not quite at full employment,

as some economic measures continue to show slack. In

particular, the share of prime working-age Americans with a

job remains about one full percentage point below where it

stood prior to the Great Recession, and two and a half

percentage points below its late 1990s readings. As such,

wage growth, while improving and set to march higher,

remains relatively tame compared with past business cycles.

Similarly, inflation has picked up in recent months, following

five years of running below target.

The combination of healthy U.S. data and better-than-expected growth from around the world reveals an

economy that is finally is a strong cyclical position. The International Monetary Fund recently revised up their

estimates for global GDP in 2017 and raised their forecasts for this year and next. Additionally, Moody’s

Analytics finds that no major economy around the world is currently in recession for the first time since the

financial crisis a decade ago. The business cycle has clearly not waned yet. And it is from this position that the

U.S. is set to run a fiscal experiment, given the recently passed Tax Cut and Jobs Act and the federal budget

negotiations.

While the conventional case for fiscal stimulus is typically countercyclical, undergoing stimulus today may prove

productive and at the same time also have relatively limited risks in the near term. Or at least risks that are

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skewed toward the upside and not the downside. Today, U.S. GDP is at potential, or at least the most recent

estimate of potential from the Congressional Budget Office.

However, GDP remains four percent below the CBO’s 2014

estimate and eleven percent below their 2007 estimate. To

the extent that this fiscal experiment of providing stimulus in

a relatively strong economy can wring out those last few

percentage points of prime-age employment, or increase

business investment and raise potential GDP further, then it

may be worth taking the opportunity to try. These benefits,

should they be realized, would be very valuable. Full

employment and a tight labor market do work wonders, even

if they cannot cure all ills.

Even so, while all of the major studies of the Tax Cut and Jobs Act find the legislation to be stimulative, the

impacts on economic growth are very much on the margin. IHS Markit, formerly IHS Global Insight, estimates

the impact on GDP in 2018, 2019 and 2020 to average 0.3 percentage points. Moody’s Analytics is a bit more

optimistic in 2018 and 2019, however their estimated

impacts turns negative sooner, and more severe in 2020

and 2021 as the tax cuts begin to shrink and eventually

phase out, at least on the personal side. Over the longer-

term, no major study finds that GDP increases

substantially due to the legislation, at least in part due to

the temporary provisions, in part due to the strength of

the business cycle, and in part due to the nature of the

tax cuts. Some of the tax windfall for both individuals and

corporations will be saved and not spent or invested in

growth enhancing endeavors.

Should there be less economic slack than believed, or the supply side constraints harder to overcome, then the

fiscal stimulus will likely manifest itself into higher inflation. From here, the Federal Reserve would step in and

raise interest rates faster than they otherwise would to slow economic growth. This plausible scenario could also

signal the end of the expansion and the onset of the next recession. Engineering the so-called soft landing,

where the Fed slows growth to head off inflation but not tipping the economy into recession, is difficult to

achieve in reality. Just like the economy overall, the newly reconfigured Fed and FOMC faces considerably

different challenges in 2018 and beyond than what has happened in recent years.

In fact, as stock markets have repriced their expectations of interest rates, due at least in part to the healthy

flow of economic data and the Federal Reserve signaling their future path of hikes, there has been a correction

in valuations in recent weeks. To date this correction, if anything, works in the Fed’s favor, or their baseline

outlook. Longer-term interest rates have crept up slightly as economic growth and inflation have firmed, and

concerns about excessive financial market growth are gone, for now.

Finally, the economy is beginning to run into supply side constraints. The biggest and most pressing issue today

is labor. The fiscal stimulus may lead to higher participation rates as workers are pulled back into the strong

economy and tight labor market, and to higher wages in the long run. However, the classic economic case for

lower corporate taxes leading to higher wages is not for a company to take their savings and immediately turn

around and hand some of it to their workforce. This may occur, but the economic literature, as laid out by

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President Trump’s Council of Economic Advisors1, shows the typical channel is through investment and

productivity gains. As businesses invest a portion of their tax savings in new, better, or more capital, their

workers become more productive, and earn higher wages. This is very much a multi-year process. As such,

recent media reports and corporate press releases noting worker bonuses and pay raises may better reflect the

current tight labor market, rather than compensation increases solely due to the tax legislation.

U.S. Bottom Line: The economic expansion marches on and the flow of economic data remains healthy. The U.S.

is about to embark on a fiscal experiment of stimulating a relatively strong economy. Expectations are for

somewhat stronger growth in the near-term. However, even as the probability of recession remains low – just

14 percent based on the latest Wall Street Journal consensus – a plausible recession scenario has now come into

focus. Should the economy truly be at full employment, then the stimulus will manifest itself in higher inflation,

leading to interest rates rising faster than currently expected, and potentially choking off economic growth

entirely. However, this is far from a foregone conclusion at this date and economists and the Federal Reserve

are watching for signs of better employment gains, wage growth, inflation, and pushing through supply side

constraints.

Oregon Economy

The Oregon economy continues to hit the sweet spot. Job growth is strong enough to keep up with population

gains and absorb the workers coming back into the labor market. The state’s participation gap is effectively

gone, following the rising labor force participation rate in recent years. The tight labor market is resulting in

faster wage gains here in Oregon than in the typical state.

While Oregon’s average wage remains lower than the U.S.

average, it is now at its highest relative point since the

mills closed in the 1980s. And Oregon’s per capital

personal income is now at its highest relative point since

the dotcom crash. All told, Oregon’s expansion remains

intact. However, both job growth and measures of

economic wages, like those from the Bureau of Economic

Analysis, have come in below forecast in recent quarters.

Oregon is still seeing growth, however a bit below our

office’s expectations. Combining this relatively lower

starting point, with the modest expansionary gains from

federal tax reform results in a relatively unchanged

forecast overall.

Like the U.S., Oregon’s labor market is tight. Difficulty

finding and retaining workers2 is the biggest challenge

many businesses face today. This tight labor market is

expected to remain in place until the next recession for

two different reasons that are coming to a head today:

the business cycle and demographics.

First, the unemployment rate is flirting with record lows

even as Oregon has seen the labor force response one

1 https://www.whitehouse.gov/sites/whitehouse.gov/files/documents/Tax%20Reform%20and%20Wages.pdf 2 https://www.qualityinfo.org/documents/10182/90519/A+Lack+of+Applicants+in+a+Growing+Economy?version=1.2

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would expect. There is no longer a large reserve of potential workers waiting around for a job. In fact, the share

of prime working-age Oregonians with a job is back to where it was prior to the Great Recession. This

employment rate can go higher still, and we should hope it does. The tight labor market not only pulls workers

back in, but it also forces businesses to dig deeper into the resume stack. The employment rate is not only back

in aggregate, but also for each level educational attainment.

Second, the labor market is tight for demographic

reasons. Baby Boomer retirements have picked up in

recent years and will remain at these higher levels for the

coming 15 years or so, or until the Boomer have fully aged

into retirement. Now, the working-age population in

Oregon is continuing to increase – the Millennials and Gen

Z are larger in number than the Boomers, and Oregon

sees net in-migration – but at slower rates than in past

decades. The labor force will continue to grow, but

competition for available workers will remain strong

across industries and firms.

Given the cyclical strength and the demographic constraint, where will additional labor come from? First and

foremost, the labor force will continue to grow due to population. Oregon remains a magnet state. In particular

Oregon is able to attract young, working-age households which provide an ample supply of labor for local

businesses. However, beyond population growth, there are three pockets of potential workers that have

remained untapped in recent decades. Each of these groups, should they return to the workforce in greater

numbers, could account for around 20,000 potential workers, or 10 months of job gains by themselves.

Combined these three groups could represent nearly 3 years of Oregon job growth.

The first group are those with self-reported disabilities, physical and/or cognitive. Over the past 20-30 years

there has been a massive increase in the share of prime-age adults citing illness or disability as the reason they

are not working. This increase is approximately 3 percentage points of the prime-age population nationwide and

4 percent in Oregon. However there has not been a corresponding increase in Social Security Disability Insurance

caseloads, nor a big increase in households reporting disability income3. This difference is puzzling. To the extent

some of this increase in self-reported disabilities represents individuals trying to save face when discussing

employment with government survey workers, then a tight

labor market may produce a cyclical decline among this

seemingly structural trend. If a quarter of the increase in

prime-age Oregonians citing disability as a barrier to work

returned to the labor force, that is approximately 20,000

potential workers.

The second group are stay-at-home moms of elementary

school age children, which have increased considerably in

recent decades4. Labor force participation rates are 10-15

percentage points lower today than in the late 1990s. Given

high childcare costs, especially in Oregon, and possibly

3 For more see: https://oregoneconomicanalysis.com/2017/08/09/labor-supply-how-much-more/ 4 For more see: https://oregoneconomicanalysis.com/2014/06/18/oregon-stay-at-home-parents/

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family leave practices, it may be unlikely that mothers with newborns or preschoolers will return to the

workforce in greater numbers. However, moms with elementary schoolers may return in a stronger economy.

Today’s elementary school students were all born at the peak of the housing bubble, during the Great

Recession, or in its immediate aftermath. Job opportunities barely existed for anyone looking. It is possible that

today’s middle school and high school students were born long enough ago that their moms were able to stay in

or enter the labor market under better economic conditions. The big unknown, however is just how much of

these participation rate changes are economic related versus broader societal shifts or personal and family

preferences.

The third group are young adults, or teenagers and college-age kids. Participation rates among this population

have fallen around 15 percentage points since the turn of the century. However there was been a corresponding

increase in school enrollment. To the extent that falling participation rates reflected a weak economy with fewer

opportunities for young adults without work experience and fewer skills, then some reversal of these trends in a

strong economy would be expected. This reversal, should it come to pass, means lower enrollments in higher

education, particularly among the more cyclically sensitive institutions like community colleges and trade

schools. Whether or not this would be a good development is an open question. The silver lining to fewer young

adults working today is that when they return to the labor market in the future, they will have additional skills.

However, in a strong economy young adults face better employment prospects and higher wages, thus raising

the opportunity costs of attending college. Already, enrollments have fallen across the country in part due to

demographics, in part due to fewer international students choosing to come to America, and in part due to the

stronger economy.

Oregon Bottom Line: All told, the current outlook for Oregon remains positive. The labor market is tight due to

the strong economy and the demographic crunch. Oregon is expected to continue to transition down to a more

sustainable rate of growth over the medium term. However, boosts from federal fiscal policy raise the near-term

outlook slightly even as employment and wages have come in a bit below expectations to end 2017. Between

today and the next recession, Oregon is expected to continue to hit the sweet spot. Workers are being pulled

back into the labor market, household incomes are rising and poverty rates are falling.

Oregon’s Labor Market

The Office of Economic Analysis examines four main sources for jobs data: the monthly payroll employment

survey, the monthly household survey, monthly withholding tax receipts and the quarterly census of

employment and wages. Right now all four measures of the labor market are improving. Jobs are being added,

albeit at a slower rate. Wages are rising, both in aggregate and for each worker. The unemployment is under

what can be considered full employment for Oregon.

As our office has been discussing, or more accurately,

warning over the past few years, the pattern of

unemployment rate changes does not likely reflect the

overall pattern of growth in the Oregon economy.

The preliminary data for both 2015 and 2016 showed the

Oregon unemployment rate going on a roller coaster ride. A

few months of extreme declines to start each year were

followed by huge increases over the next few months. These

types of increases in the unemployment rate have only been

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seen during recessions. These wild swings have largely been revised away each year during the annual

benchmarking process (i.e. revisions). The overall pattern of Oregon’s unemployment rate has been a fairly

steady decline since the depths of the Great Recession.

However, it must be noted that once again Oregon’s unemployment rate plunged again in early 2017 followed

by increases over the summer months. If the recent past is any guide, expect the month to month changes to be

moderated once the data is revised in early 2018 (March). That said, Oregon’s unemployment has continued to

decline in 2018, particularly relative to 2017.

More importantly, wages in Oregon remain relatively

strong, although different measures have diverged in

recent quarters. Withholding collections, which matter

the most to our office given the revenue forecast,

continue to see healthy gains. Although withholdings

have slowed some in recent years, in keeping with the

slower employment growth. That said, withholdings

also include revenue from bonuses, stock options and

the like which are not pure wages. Measures of

economic wages have slowed further in recent

quarters, although with each round of revisions they

are shifting up and the gap between the series is

shrinking somewhat. This divergence is something our

office is keeping a close eye on and will monitor

moving forward. For now, expectations are for ongoing healthy wage gains in Oregon given the labor market

continues to advance.

Overall, getting a handle of the health of Oregon’s labor market is being somewhat complicated by technical

issues within the underlying payroll jobs data. For this reason the employment data in our office’s forecast is

adjusted for two important technical purposes: seasonality at the detailed industry level and the upcoming

benchmark revisions5. Specifically, our office uses the benchmarked, or revised employment data through

2017q3 and imputes the 2017q4 employment data based upon the available preliminary Oregon estimates,

national data, and our office’s economic forecast model. As such, for this quarterly forecast, the first pure

forecast period is 2018q1.

5 Each year the U.S. Bureau of Labor Statistics revise the employment data – a process known as benchmarking. The current establishment survey (CES), also known as the monthly payroll survey, is benchmarked against the quarterly census of employment and wages (QCEW), a series that contains all employees covered by unemployment insurance. The monthly CES is based on a sample of firms, whereas the QCEW contains approximately 96 percent of all employees, or nearly a complete count of employment in Oregon. The greatest benefit of the CES is the timeliness – monthly employment estimates are available with only a one month lag – and these estimates are reasonably accurate. However the further removed from the latest benchmark, the larger the errors. The QCEW is less timely as the data is released approximately 3-4 months following the end of the quarter. The greatest benefit of the QCEW is that is a near 100 percent count of statewide employment. For these reasons, the CES is usually used to discuss recent monthly employment trends, however once a year the data is revised to match the historical QCEW employment trends. The last month of official benchmark data is September 2016. The QCEW is currently available through September 2017, thus the preliminary benchmark used here covers the October 2016 – September 2017 period.

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In the fourth quarter, total nonfarm employment increased 2.0 percent over the past year with the private

sector growing at 2.3 percent and the public sector at 0.9 percent. These rates of growth are a clear step down

from the full-throttle rates seen in recent years, however still remain faster than needed to keep pace with

population gains so far.

The nearby graph illustrates the number of job gains by

major industry by the length of the bar. The percentage

increase these changes represent is noted as well. The bars

are color coded by growth rate relative to total employment

growth. Industries with dark blue colored bars are growing

at rates much faster than total employment, light blue bars

represent industries which are growing approximately in line

with the average, while grey bar industries are growing at

rates significantly less than the average.

So far in recovery, the large service sector industries have

generally led job growth in terms of the number of jobs

added and with above-average growth rates. These include

jobs in professional and business services, health services,

and leisure and hospitality industries. These three industries

have gained 18,300 jobs in the past year and account for 49

percent of all job gains across the state. The good news is that this share has fallen as the expansion continues

and other industries add jobs, which was not the case earlier in the expansion.

In terms of illustrating how each industry has fared over the

Great Recession and so far in recovery, the second graph

shows both the depths of recessionary losses6 and where

each industry stands today relative to pre-recession peak

levels.

Currently, ten major industries are at all-time highs. Private

sector food manufacturing, education, and health never

really suffered recessionary losses – although their growth

did slow during the recession. Professional and business

services and leisure and hospitality have each regained all

of their losses and are leading growth today. In recent

months retail emploment, other services, wholesale, and

transportation, warehousing and utilities, in addition to the

public sector have surpassed their pre-recession levels and

are at all-time highs. The nine private sector industries at

all-time highs account for 62 percent of all statewide jobs.

6 Each industry’s pre-recession peak was allowed to vary as, for example, construction and housing-related industries began losing jobs earlier than other industries or the recession’s official start date per NBER.

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The public sector accounts for an additional 17 percent of all jobs.

With the Great Recession being characterized by a housing bubble, it is no surprise to see wood products,

construction, mining and logging and financial services (losses are mostly real estate agents) among the hardest

hit industries. These housing and related sectors are now recovering, although they still have much ground to

make up. Transportation equipment manufacturing suffered the worst job cuts and is likely a structural decline

due to the RV industry’s collapse7. With that being said, the subsectors tied to aerospace are doing better and

the ship and boat building subsector is growing again. Metals and machinery manufacturing, along with mining

and logging, have shown the largest improvements since the depths of the recession.

Coming off such a deep recession, goods-producing industries exhibited stronger growth than in past cycles.

While all manufacturing subsectors have seen some growth, they are unlikely to fully regain all of their lost jobs.

The good news, certainly in the short-term, is that much of the manufacturing sector has returned to growth in

recent months following declines a year ago. All told, Oregon manufacturers typically outperform those in other

states, in large part due to the local industry make-up. Oregon does not rely upon old auto makers or textile

mills. The state’s manufacturing industry is comprised of newer technologies like aerospace and

semiconductors. Similarly Oregon’s food processing industry continues to boom.

All told, each of Oregon’s major industries has experienced some growth in recovery, albeit uneven. As the

economy continues to recover there will be net winners and net losers when it comes to jobs, income and sales.

Business cycles have a way of restructuring the economy.

For additional information on the most recent quarter’s

employment forecast errors, please refer to Table A.1 in

Appendix A.

Leading Indicators

After more than two years of no real sustained movement up

or down, both of the Oregon-specific composite leading

indicators have broken through the malaise to the upside in

recent months. In keeping with the general pattern of

economic growth, the mixed bag of indicators in both our

office’s Oregon Index of Leading Indicators (OILI) and the

University of Oregon’s Index of Economic Indicators, showed

many of the manufacturing, or goods-producing indicators

languishing while all others pointed toward growth. As

discussed in recent quarters, the manufacturing indicators

began picking up, leading to gains in the overall index. This

pattern has continued.

As of today no individual indicators are showing no growth. In

recent quarters both Help Wanted Ads and the Oregon Dollar

Index were flashing warning signs for those indicator series.

However businesses are posting more job openings and the

7 http://oregoneconomicanalysis.com/2012/07/10/rv-workers-and-reemployment/

Improving OILI

Slowing Air Freight

Not Improving Help Wanted Ads

Housing Permits

UO Index Industrial Production

Capital Good Orders Initial Claims

Housing Permits Manufacturing PMI

Initial Claims New Incorporations

Manufacturing Hrs Oregon Dollar Index

Consumer Sentiment Semiconductor Billings

Employment Services Withholding

Interest Rate Spread Consumer Sentiment

Weight Distance Tax

Individual Indicators

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

75

80

85

90

95

100

105

110

115

120

Jan-05 Jan-08 Jan-11 Jan-14 Jan-17

Oregon Economic Indexes, Jan 2005 = 100

Employment

OILI

UO Index

Recession Probability, rhs

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dollar is depreciating. Among the indicators that are currently slowing, none are particularly worrisome from an

economic growth perspective. The fact that housing permits and new construction continues to increase slowly

in fits and starts is worrisome from an affordability point of view, but it also suggests the housing expansion still

has legs to run.

Across both aggregate leading indicators there are no real signs for concerns at the moment. This is one reason

economic forecasters are sanguine about the risk of recession in the immediate future, outside of unforeseen

geopolitical shocks and the like. University of Oregon professor Jeremy Piger has created a real time probability

of recession8 model, and finds there is just 0.5 percent chance the U.S. has entered into a recession. However,

another recession will come, of that we can be sure. IHS Global Insight puts the probability of recession over the

next year at 20 percent, and the Wall Street Journal consensus is at 14 percent.

Hopefully Oregon’s leading indicators will give a signal in advance of the next recession, which neither is doing

today. While past experience is no guarantee of future performance, Oregon’s leading indicator series do have a

good track record in their relatively brief history. Both series flattened out in 2006 and began their decline in

advance of the Great Recession. Similarly both Oregon series reached their nadir in March 2009, a few months

before the technical end of the recession (June 2009 per NBER) and about 9 months in advance of job growth

returning to Oregon.

Short-term Outlook

While Oregon’s economic expansion continues, growth has slowed and stabilized. In recent years, the state has

enjoyed robust, full-throttle rates of job gains in the 3-3.5 percent range, or nearly 5,000 jobs per month. No

longer is this the case. Oregon is expected to continue to see healthy job gains – a bit more than 3,000 per

month or about 2 percent over the course of the 2017-19 biennium – but the state is now past its peak growth

rates for this expansion. Importantly, such gains remain strong enough to hold unemployment down and

account for ongoing population growth.

After these near-term job gains, longer-run demographic trends weigh on growth to a larger degree. While

consistent with the general character of recent forecasts, there are a few minor revisions. Employment is revised

down a few thousand jobs in 2018 due to actual employment coming lower than expected to end 2017.

However the forecast is revised up 4-5,000 jobs in 2019 and 2020 due in part to federal fiscal stimulus. Similarly,

personal income is revised down slightly in 2018, before seeing upward revision in 2019 and 2020. All told, the

expectation of future growth rates remains largely unchanged, however the growth path between today and

2027 has been altered slightly.

The state’s new minimum wage law, passed during the 2016 legislative session, will also impact the Oregon

economy over the forecast horizon. Using estimates provided by the Oregon Legislative Revenue Office, along

with the academic literature, our office’s outlook includes a slowdown in job growth due to the higher minimum

wage moving forward. While the impact is small when compared to the size of the Oregon economy, it does

result in approximately 40,000 fewer jobs in 2025 than would have been the case absent the legislation. Our

office is not predicting outright job losses due to the higher minimum wage, however we are expecting future

growth to be slower as a result. In the near term, the higher minimum wage boosts overall state income as low-

wage workers receive raises. Over the medium term, employers are expected to adjust to the higher wages and

8 http://pages.uoregon.edu/jpiger/us_recession_probs.htm/

11

increase worker productivity, possibly via capital for labor substitutions. Our office has incorporated these

overall effects into the outlook for wages and in the industries which employ the largest numbers of low-wage

workers. These include the obvious like leisure and hospitality, and retail trade, but also health care and food

processing manufacturing, among others.

Should this overall economic outlook come to pass, it will have matched the equivalent of previous expansions

in Oregon. Given demographic trends today, particularly the aging Baby Boomer cohort, job growth of 3 percent

is considered full throttle. In decades past, growth of 4 or 5 percent was common during expansions in Oregon,

however that time period also coincided with the Baby Boomers entering their prime working years. Today the

opposite is occurring. Even so, demographic trends are not all bad, as the even larger cohort of Millennials are

currently entering their prime working years. The net effect is overall lower rates of labor force and economic

growth, due to demographics.

Private sector growth, measured by the number of jobs created, will be dominated by the large, service sector

industries like professional and business services, leisure and hospitality and health.

Nevertheless, goods-producing industries, while smaller,

had previously been growing at above-average rates.

Expectations in recent forecasts have been that these

goods-producing industries would slow. Growth over the

next few years would be considerably less than that seen in

the past few years. Even construction is expected to add

jobs at a slower pace even as the housing rebound

continues. This is in part due to the fact that growth must

cool off after the exceptionally strong gains in construction

in recent years.

Natural Resources (mining and logging) are somewhat of a

technical exception. There was a reclassification of a few firms out of this industry, leading to employment

Economic Forecast Summary

2017:4 2018:1 2018:2 2018:3 2018:4 2016 2017 2018 2019 2020

Personal Income, Nominal U.S. 4.3 4.6 5.0 5.2 5.0 2.4 3.1 4.4 5.2 5.0

% change Oregon 6.4 5.4 6.1 6.0 5.7 4.2 3.7 5.5 5.7 5.3

Wages and Salaries, Nominal U.S. 3.8 4.4 5.0 5.4 5.6 2.9 3.1 4.4 5.5 4.9

% change Oregon 7.1 5.6 6.8 6.5 6.5 5.4 4.3 6.3 6.2 5.1

Population U.S. 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.8 0.8 0.8

% change Oregon 1.4 1.3 1.5 1.7 1.3 1.5 1.6 1.5 1.4 1.3

Housing Starts U.S. 1.27 1.25 1.27 1.28 1.36 1.18 1.21 1.29 1.40 1.45

U.S. millions, Oregon thousands Oregon 19.5 19.6 20.4 21.0 21.1 19.1 19.0 20.5 22.1 23.7

Unemployment Rate U.S. 4.1 4.0 3.9 3.8 3.7 4.9 4.4 3.9 3.7 3.8

Oregon 4.2 4.3 4.4 4.5 4.5 4.9 4.0 4.4 4.5 4.7

Total Nonfarm Employment U.S. 1.5 1.6 1.6 1.8 1.8 1.8 1.5 1.6 1.5 0.7

% change Oregon 1.4 2.2 2.4 2.3 2.4 2.9 2.1 2.1 2.1 1.1

Private Sector Employment U.S. 1.7 1.8 1.8 2.0 2.0 1.9 1.7 1.8 1.6 0.6

% change Oregon 2.4 2.4 2.5 2.5 2.5 3.1 2.3 2.3 2.2 1.0

Quarterly Annual

12

“losses” in 2017 and weighing on the growth rate seen in the nearby chart. What looks like acceleration in

employment growth in natural resources is merely a return to growth rates seen in past forecasts.

Additionally, manufacturing is expected to see minimal

gains in the coming years. The good news is that after

sustaining losses during the middle of 2016, manufacturing

employment in Oregon has started to add jobs again. As the

manufacturing cycle continues to strengthen some,

additional gains are expected. This growth is expected to be

strongest among the state’s food processors, and beverage

manufacturers, predominantly breweries. That said, any

global weakening or further strengthening of the dollar will

weigh further on growth.

Public sector employment at the local, county and state

level for both education and non-education workers is

growing in Oregon, as state and local revenues continue to

improve along with the economy. Over the forecast horizon,

government employment is expected to grow roughly in

line with population growth and the increased demand for

public services, albeit just a hair faster than population

growth alone. One risk to the outlook is the recent Oregon

Supreme Court decision which reversed earlier Public

Employees Retirement System (PERS) changes enacted by

the Legislature. The extent to which the court decision will

impact hiring by local and state public entities is unknown, but it is a risk to the outlook.

Along with an improving labor market, stronger personal income gains are here, although tax law changes have

pushed around growth rates in the recent past (see the expiring Bush tax cuts and the fiscal cliff) and may do so

again moving forward. Personal income is forecasted to be 5.5 percent in 2018, 5.7 percent in 2019, before

tapering off to 5.3 percent in 2020 and averaging 4.8 percent per year through 2027.

As the economy continues to improve, household formation is increasing too, which will help drive up demand

for new houses. Household formation was suppressed earlier in the recovery, however the improving economy

and increase in migration have returned in full force. Even as more young Oregonians are living at home, as the

Millennials continue to age beyond their early 20s, demand for housing will increase as well.

Housing starts in the fourth quarter totaled 19,500 at an annual pace. The second half of 2017 marked the

highest rate of new construction since early 2007. Overall a level of about 21,000 housing starts is the long-run

average for the state prior to the housing bubble. The forecast calls for moderate to strong growth in the coming

few years with starts reaching just over 20,500 in 2018, 22,100 in 2019 and 23,800 in 2020. Over the extended

horizon, starts are expected to average around 24,000 per year to meet demand for a larger population and

also, partially, to catch-up for the underbuilding that has occurred in recent years. As of today, new home

construction is cumulatively about one year behind the stable growth levels of prior decades even after

accounting for the overbuilding during the boom.

13

A more complete summary of the Oregon economic outlook and forecast changes relative to the previous

outlook are available as Table A.2 and A.3 in Appendix A.

Forecast Risks

The economic and revenue outlook is never certain. Our office will continue to monitor and recognize the

potential impacts of risk factors on the Oregon economy. Although far from comprehensive, we have identified

several major risks now facing the Oregon economy in the list below:

U.S. Economy. While Oregon is more volatile than the nation overall, the state has never missed a U.S.

recession or a U.S. expansion. In fact, Oregon’s business cycle is perfectly aligned with the nation’s, at

least when measuring peak and trough dates for total nonfarm employment. If anything, Oregon

actually leads the U.S. by a month or two. The fact that there are a few worrisome trends at the U.S.

level and the slowdown has hit Oregon means there should be some concerns about the outlook. Should

the U.S. fall into recession, Oregon will too. That said, should the U.S. economy accelerate following the

lifting of headwinds, Oregon’s economy should receive a similar boost as well.

Housing affordability. Even as the housing market recovers, new supply has not kept up with demand

(both from new households and investor activity). This applies to both the rental and ownership sides of

the market. As such, prices have risen considerably and housing (in)affordability is becoming a larger risk

to the outlook. Expectations are that new construction will pick up in the next year or three, to match

the increase in demand, which will alleviate some price pressures. However to the extent that supply

does not match demand, home prices and rents increasing significantly faster than income or wages for

the typical household is a major concern. While not included in the baseline outlook, significantly worse

housing affordability may dampen future growth given Oregon’s reliance on net in-migration.

Global Spillovers Both Up and Down. The international list of risks seems to change by the day:

sovereign debt problems in Europe, equity and property bubbles in places like Canada, South America

and Asia, political unrest in the Middle East and Ukraine, nuclear arsenal concerns with North Korea, and

commodity price spikes and inflationary pressures in emerging markets. In particular, with China now a

top destination for Oregon exports, the state of the Chinese economy – and its real estate market, or

public debt burden – has spillover effects to the Oregon economy. Any economic slowing in Asia is a

potential threat to the Pacific Northwest.

Federal fiscal policy. The uncertainty regarding federal fiscal policy remains a risk. Some policies are

likely to impact Oregon than the typical state, while others maybe not as much. The good news for

Oregon is that outside of outright land ownership, the federal government has a relatively small physical

presence in the state. This means that direct spending reductions are less likely to hurt Oregon. Of

course, it also limits the local benefit from any potential increases in federal spending, as was recently

passed by Congress in early 2018. In terms of federal grants as a share of state revenue, Oregon ranks

29th highest. For federal procurement as a share of the economy, Oregon ranks 48th highest. Oregon

ranks below average in terms of military-dependent industries as well. The one area that Oregon ranks

above average is in terms of direct federal employment, ranking 19th highest among all states. Oregon

also is exposed to an above-average share of federal transfer payments to households. Transportation

funding is also a major local concern. Overall, the direct impact may be less than in other states but the

14

impact will be felt nevertheless, particularly as our closest neighboring states have large federal and

military workforces.

Climate and Natural Disasters. Weather forecasting is even more difficult than economic forecasting a

year or two into the future. While the severity, duration and timing of catastrophic events like

earthquakes, wildfires and droughts are difficult to predict, we do know they impact regional

economies. Fires damage forests and tourism. Droughts in particular impact our agricultural sector and

rural economies to a larger degree. Whenever Cascadia, the big earthquake, hits, we know our regional

economy and its infrastructure will be crippled and in need of immediate repairs. Longer-term issues like

the potential impact of climate change on domestic migration patterns are likewise hard to predict and

outside our office’s forecast horizon. There is a reasonable expectation that migration flows will

continue to be strong as the rest of the country becomes less habitable over time.

Commodity price inflation. Always worrisome is the possibility of higher oil (and gasoline) prices. While

consumer spending has held up pretty consistently in this recovery, anytime there is a surge in gas

prices, it eats away at consumers’ disposable income, leaving less income to spend on all other, non-

energy related goods and services.

Federal timber policy. Even with a temporary reinstatement of payments, it has been and it is clear that

federal policymakers will not reinstate the program the same as before, however negotiations are

ongoing for more sustainable timber harvests and related revenue. In the meantime, reductions in

public employment and services are being felt in the impacted counties. For more information from a

historical perspective, see two recent blog posts, here and here9.

Initiatives, referendums, and referrals. Generally, the ballot box and legislative changes bring a number

of unknowns that could have sweeping impacts on the Oregon economy and revenue picture.

9 http://oregoneconomicanalysis.wordpress.com/2012/01/23/historical-look-at-oregons-wood-product-industry http://oregoneconomicanalysis.wordpress.com/2013/05/28/timber-counties/

15

Alternative Scenarios

The baseline forecast is our outlook of the most likely path for the Oregon economy. As with any forecast,

however, many other scenarios are possible. In conjunction with the Legislative Revenue Office, this forecast

provides three alternative scenarios, which are modeled on growth patterns over previous business cycles.

Optimistic Scenario:

The recovery gathers steam and pulls the economy into a stronger cyclical expansion. The relatively lackluster

economic growth seen in the earlier stages of recovery, the manufacturing weakness in 2015 and 2016 and the

recent slowing in U.S. personal income all recede into the rearview mirror of history and the U.S. economy

builds momentum throughout 2018 and into 2019. The economy is soon firing on all cylinders. Economic growth

is above potential in 2018, resulting in stronger job and income gains. This stronger growth leads to more

consumer spending and more business investment.

In Oregon, job gains are broad based with strong growth in all private sector industries. The unemployment rate

remains lower than under the baseline scenario as individuals are able to find employment more readily and

income growth accelerates. The labor force participation gap closes and even turns positive. The increase in

employment and income support a self-sustaining economic expansion in which new income fuels increased

consumer spending (and debt reduction) which begets further increases in employment. Such an expansion

increases housing demand as newly employed households (and increasing income for existing households) find

their own homes after doubling-up with family and friends during the recession. This results in new construction

returns to normal levels about a year earlier than the baseline.

Mild Recession Scenario:

The Oregon employment and GDP grow slowly in 2018. The housing market stalls (again), removing one driver

of growth. Strained trade relations result in falling exports, business confidence tumbles and so does capital

spending. The U.S. dollar strengthens, chocking off the manufacturing cycle. These factors are enough weight on

the recovery that by mid- or late-2018 the economy slides back into recession. Job losses ensue and while not

severe – about 45,000 jobs in Oregon when it is all said and done – it takes a toll on business income, housing

starts and personal income. The unemployment rate returns to nearly 7 percent. The net effect of the mild

recession is an extended period of prolonged economic weakness, not unlike Japan’s so-called Lost Decade(s).

Although inflation is expected to remain positive, a key difference.

2017 2018 2019 2020

Employment

Baseline 2.1% 2.1% 2.1% 1.1%

Optimistic 2.1% 3.5% 4.0% 0.9%

Mild Recession 2.1% 1.9% -0.4% -1.3%

Severe Recession 2.1% 1.1% -5.5% -0.5%

Personal Income

Baseline 3.7% 5.5% 5.7% 5.3%

Optimistic 3.7% 8.9% 7.7% 5.4%

Mild Recession 3.7% 5.3% 3.1% 3.4%

Severe Recession 3.7% 4.9% -3.1% 4.3%

Mar 2018Alternative Scenarios

1.5

1.6

1.7

1.8

1.9

2.0

2.1

2000 2005 2010 2015 2020

Mill

ion

s

Total Nonfarm Employment

Forecast-->

Optimistic

Baseline

Mild Rec.

Severe Rec.

16

Severe Recession Scenario:

After expanding for 8+ years at relatively lackluster growth rates, the U.S. economy falls back into recession.

Industrial production declines and the slower personal income growth in the U.S. worsens. Strained trade

relations develop into an all-out trade war. The Fed, already lacking in traditional monetary policy ammunition,

is not able to stave off the impact. While the catalyst may be different, the economic effect is similar to late

2008 and early 2009, although not quite as severe when the dust settles. This is little comfort when the

unemployment spikes back to near 10 percent and nearly 135,000 Oregonians lose their jobs by late-2019.

Besides the domestic economic headwinds and Federal Reserve tightening, the likely culprit in this scenario is

either a meltdown of the financial markets sparked by some geopolitical shock, or quickly rising inflation in part

due to the fiscal stimulus. Economic growth in the U.S., while fairly steady as of late, is not nearly strong enough

to withstand an external financial shock of this magnitude, nor a Federal Reserve quickly raising rates to fight

inflation. Further economic effects of a recession this size are personal income losses of around 4 percent, about

three-quarters the size of the Great Recession losses in Oregon. Housing starts plummet to near historical low

levels of construction and home prices decline further. On the bright side, when construction does rebound, it

will result in a surge of new home building that will rise above the state’s long term average level of building due

to pent-up demand for housing and that the state will have under built housing during this time period.

Extended Outlook

IHS Economics projects Oregon’s economy to fare well relative to the rest of the country in the coming years.

The state’s Real Gross State Product is projected to be the fifth fastest among all states across the country in

terms of growth with gains averaging 2.7 percent through 2023. Total employment is expected to be the ninth

strongest among all states at an annualized 1.2 percent, while manufacturing employment will be the second

fastest in the country at 1.6 percent. Total personal income growth is expected to be 4.9 percent per year, the

fifteenth fastest among all states, according to IHS Economics.

Our office is equally bullish in terms of Oregon’s relative growth prospects. Much of Oregon’s advantage comes

from population growth, specifically the ability to attract and retain young, working-age households. In recent

years, IHS had been forecasting Oregon population growth of around 1 percent annually. Our office expects it to

average 1.3 per year over the next handful of years. In recent months, IHS has raised their Oregon population

forecast to 1.24 percent annually, which is very close to our office’s expectations. As such, our overall economic

outlooks are now similar.

OEA has identified three main avenues of economic growth that are important to continue to monitor over the

extended horizon: the state’s dynamic labor supply, the state’s industrial structure and the current number of

start-ups, or new businesses.

Oregon has typically benefited from an influx of households from other states, including an ample supply of

skilled workers. Households continue to move to Oregon even when local jobs are scarce, as long as the

economy is equally bad elsewhere, particularly in California. Relative housing prices also contribute to migration

flows in and out of the state. For Oregon’s recent history – data available from 1976 – the labor force in the

state has both grown faster than the nation overall and the labor force participation rate has been higher.

However while the past two years have brought considerable improvements there remain potentially worrisome

signs, particularly when the next recession comes.

17

First, on the bright side, all of the recessionary-induced

declines in the labor force itself have been reversed in the

recent years. Oregon’s labor force has never been larger.

However, the participation rate remains a little lower

than expected, when adjusting for the size of the

population and the aging demographics. Oregon’s

participation rate continues to rebound today, which is

great news, however any participation gap is still cause

for concern. While much of the past decade’s patterns

can be attributed to the severe nature of the Great

Recession, and even the lackluster housing boom itself,

some damage is likely permanent. The longer the expansion continues without seeing rising participation rates

among some segments of the population, the more likely the damage is permanent. A stronger economy and a

longer expansion will minimize any permanent damage.

All told, our office’s baseline outlook calls for some continued improvement in the near-term for both the labor

force participation rate and the employment to population ratio. These gains are due to the shorter run cyclical

rebound in the economy, before longer-run demographic trends will weigh on these measures. Focusing just on

the prime working age cohorts reveals stronger improvements and a better outlook.

Oregon’s industrial structure is very similar to the U.S. overall, even moreso than nearly all other states. That

said, Oregon’s manufacturing industry is larger and weighted toward semiconductors and wood products,

relative to the nation which is much more concentrated in transportation equipment (autos and aerospace).

However, these industries which have been Oregon’s strength in both the recent past and historically, are now

expected to grow the slowest moving forward. Productivity and output from the state’s technology producers is

expected to continue growing quickly, however employment is not likely to follow suit. Similarly, the timber

industry remains under pressure from both market based conditions and federal regulations. Barring major

changes to either, the slow growth to downward trajectory of the industry in Oregon is likely to continue.

With that being said, certainly not all hope is lost. Many

industries in which Oregon has a larger concentration

that then typical state are expected to perform well

over the coming decade. These industries include

management of companies, food and beverage

manufacturing, published software along with gains in

crop production and nurseries.

The state’s real challenges and opportunities will come

in industries in which Oregon does not have a relatively

large concentration (the orange bars in the graph).

These industries, like consulting, computer system

design, financial investment, and scientific R&D, are

expected to grow quickly in the decade ahead. To the

extent that Oregon is behind the curve, then the state

18

may not fully realize these gains if they rely more on clusters and concentrations of similar firms that may

already exist elsewhere in the country.

Another area of potential concern that may impact longer term

economic growth is that of new business formation. Over the

past few years, the number of new business license applications

with the Oregon Secretary of State have begun to grow again

and even accelerate. However data available from the U.S.

Census Bureau and Bureau of Labor Statistics clearly indicate

that entrepreneurship and business formation remain at

subdued levels and rates.

The share of all businesses that are start-ups, either in Oregon

or across the nation, is effectively at an all-time low, with data

starting in the late 1970s. Associated start-up employment

follows a similar pattern. The concern is that new businesses

are generally considered the source of innovation and new

ideas, products and services that help propel economic growth.

To the extent that fewer start-ups indicate that R&D more

broadly is not being undertaken, slower growth is to be

expected moving forward. However, if the larger firms that

have won out in today’s marketplace are investing in R&D and

making those innovations themselves, then the worries about

the number of start-ups today is overstated. It can be hard to

say which is the correct view. However seeing these longer run,

downward trends in new business formation warrants, at the

very least, concern about future growth prospects.

Finally, Oregon also enjoys the long-term advantages of low electricity costs; a central location between the

large markets of California, Vancouver and Asia; clean water; low business rents and living costs when compared

to other Left Coast locations; and an increasingly diverse industrial base.

One long-run concern for policymakers, think tanks and

Oregon’s economy is that very little progress on raising per

capita income is projected out to 2027. In and of itself, a

higher per capita income level would better fund public

services for citizens. The benefit side of the state’s relatively

low income figures is that local firms do not have to pay

higher wages, thus helping support the firms’ balance sheets

as well. It is not purely a lose-lose proposition. The Oregon

Employment Department has published10 a detailed look at

Oregon’s per capita personal income.

10 http://olmis.emp.state.or.us/olmisj/PubReader?itemid=00007366

19

Today, Oregon’s average wage relative to the nation is at its highest point since the mills closed in the 1980s.

While some industries are seeing stronger growth, these gains are broad-based across regions and industries in

Oregon. Similarly, Oregon’s per capita personal income is at its highest relative point since the dotcom crash.

In terms of the outlook, expectations are that wages will remain at this high watermark but not increase much

further, at least relative to the nation. The primary reason for this is that Oregon’s average wages have already

accelerated in recent years, even as U.S. wages are just now picking up. Our office expects Oregon’s average

wage to continue to increase by 4 percent per year. However as the U.S. accelerates closer to Oregon’s annual

rate, Oregon’s growth advantage in recent years will lessen.

As for the per capita personal income outlook,

expectations are that some progress will continue to be

made. One major factor influencing the per capita income

trends is the relative incomes at the very top of the

distribution. Make no mistake, Oregon’s highest-income

households have done well financially. However incomes

at the top of the national distribution have increased even

further. Additionally, Oregon’s highest-income households

have considerably less income than their national

counterparts. The further up in the distribution you go, the

less income Oregonians have relative to the entire country.

The concentration among the richest households is large

enough to weigh on Oregon’s overall per capita income

figures.

The good news is that median incomes in Oregon have not eroded over time relative to the nation. That means

the typical household in Oregon is not continually becoming worse off relative to the typical American

household. This difference of trends at various points along the income distribution indicates a more

complicated economic story is unfolding. Yes, Oregon’s per capita personal income has eroded over the past

generation. However that erosion is not seen among the typical household or for the typical worker. Given the

distribution issues and the economic outlook, Oregon’s per

capita personal income is not expected to catch the national

average.

Regional Comparisons

As our office documented a year ago11, housing affordability

truly is a statewide challenge. It is a major concern in our fast-

growing urban areas, and throughout rural Oregon as well. In

fact, rural Oregonian incomes are on par with rural American

incomes, however home prices are 30 percent higher here and

rents are 16 percent higher. These differences mean rural

Oregon faces an affordability crunch. Pinpointing the exact

11 For more see the March 2017 forecast, or https://oregoneconomicanalysis.com/2017/02/09/rural-housing-affordability/

20

reason for rural Oregon’s housing challenges can be difficult, however the data do tell a clear, or at least

consistent story.

First, rural Oregon has experienced faster population growth than the rest of rural America. This results in

stronger demand for housing. Given that new construction is almost always more expensive compared to the

older housing stock, a more modern mix of housing, or a larger share of newer homes can lead to higher prices

when looking at the market overall. This does not appear to be the case in rural Oregon, however. There is not a

larger share of homes built in the last decade or two. Housing prices in rural Oregon are more expensive than

their national counterparts for all types of units and for all vintages in the housing stock.

As such, if a region experiences faster population growth but

an average amount of new construction overall, that means

the region is building less on a population-adjusted basis and

the vacancy rate is falling. This is exactly the case in rural

Oregon, where new construction since 2000 is approximately

30 percent less than in rural America on a population-adjusted

basis. The result is rural Oregon’s vacancy rate is now nearly 2

percentage points lower than in rural America, while it was

essentially the same back in 2000. Stronger demand coupled

with limited supply is the classic recipe for rising prices. This is

the story the data tells of rural Oregon’s housing crunch, when

compared with rural America overall.

However these challenges are not unique to Oregon, nor for rural Oregon in particular. The lack of housing

supply in Oregon’s urban areas, and in the other popular and fast-growing metropolitan regions of the country

has eroded affordability everywhere. The lack of credit for single family developers and for land acquisition and

development loans in particular appears to be a root issue impacting the supply. For more on the causes of the

housing shortage, see our office’s previous report12.

That said, some regions of rural American and rural Oregon face additional challenges in the form of vacation

homes. Many ski resorts and coastal communities have housing markets based in large part on external demand

rather than on local economic conditions. This places increased pressure on moderately priced homes, or so-

called workforce housing. Along Oregon’s coast this issue is

particularly pronounced. Both Lincoln and Tillamook counties

have built an above average amount of housing in recent

decades, at least relative to population growth. However after

factoring in new developments targeted specifically as

vacation homes, and an overall increase in vacation homes in

general, the stock of workforce housing, or for local residents

has barely increased. These pressures make it difficult for local

businesses to hire and retain workers, and result in longer

commutes for individuals taking these jobs. Finding a policy

prescription to these issues is particularly challenging.

12 https://oregoneconomicanalysis.com/2017/04/12/causes-of-the-great-housing-shortage/

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State Comparisons

Oregon’s ability to attract and retain young, skilled, working-age households is one of, if not the key driver of the

regional economy over the long-run. If you look at the current population — among U.S.-born residents,

excluding international migrants — Oregon is about 50/50 in terms of those born in Oregon versus those born in

a different state. However if you look at just the adult population (kids don’t really get to choose where they

live), Oregon is 43% born in the state vs 57% born in a different state. Clearly, many of the discussions

surrounding population growth, housing issues and the like have a strong twinge of migration hypocrisy.

While we typically talk about migration flows from one place to another, what about migration trends based

upon where people are born? We know many of the current residents in Oregon were born outside the state,

but where do all of the Oregon-born citizens live today? How many have stayed in Oregon, or fled to other

states around the country?

Relative to the U.S. average overall, the states fall

into four categories when it comes to both the

share of their current population that was born in

that state, and the share of residents born in that

state that still live there.

- Insular: less migration in from other states,

less migration out of native-born

- Origin: less migration in from other states,

more migration out of native-born

- Cosmopolitan: more migration in from

other states, more migration out of native-

born

- Destination: more migration in from other

states, less migration out of native-born

While this may sound confusing, so let’s look at the

results and use Oregon as an example. On the

horizontal axis of the scatterplot, you see the share

of the current population that was born in that

state. For Oregon, that’s 43% (meaning 57%

migrant share). On the vertical axis you see the

share of adults currently living in the state in which

they were born. For Oregon that’s 61% (meaning

39% of Oregon-born citizens have moved to a

different state). The divisions into the various

groups are relative to the U.S. averages. There are

certainly shades of gray when dividing the states

into groups, however a clear spatial pattern does emerge, which can be seen in the map.

22

Revenue Summary

Since the September 2017 forecast, two significant factors have come into play that have changed Oregon’s

General Fund revenue outlook. The first factor, the new federal tax law (Tax Cuts and Jobs Act), stands to reduce

state revenues in the near term, and will boost them in future budget periods. The second factor, a potential

equity market correction, draws down revenues after a short delay.

Oregon’s tax collections are tied to federal tax law both directly and indirectly. The starting point for calculating

Oregon income tax is taxable income from a filer’s federal return. As a result, most federal changes to what is

defined as income, or to what can be deducted or excluded from it, directly feed into Oregon tax collections.

After the last major federal tax reform in 1986, Oregon’s income tax revenues grew by 20% in the following

year. This time, the largest reform to the tax base will directly reduce, rather than increase, Oregon’s revenues.

The new 20% federal deduction for pass-through income will feed directly into lower Oregon taxable income.

Federal tax law changes also indirectly feed back into Oregon’s tax collections. The primary channel occurs

through the subtraction for federal taxes that is allowed on Oregon returns. Since some taxpayers can subtract

federal taxes from their Oregon income, when federal personal income taxes are cut, Oregon taxable income

goes up. These indirect effects outweighed the direct ones following the Bush Era tax cuts, leading to a net

increase in Oregon tax collections.

Ignoring behavioral responses and other dynamic effects for now, static impact estimates suggest that Oregon’s

General Fund revenues will be reduced by more than $200 million in the current biennium due to TJCA. This

impact reverses during the next

decade, increasing revenues by

more than $200 million per

biennium. Several provisions

contribute to this pattern,

including accelerated

depreciation (expensing), new

inflation factors, expiring

individual provisions and

repatriated income from

multinational corporations. Due

to a quirk in current tax law,

multinational repatriation

represents a near-term revenue

loss in Oregon rather than a

windfall.

These static revenue impact estimates only tell part of the story, however, as households, firms and tax

professionals are all certain to change their behavior in light of the new rules of the game. Many of these

behavioral responses will serve to mute the impact of TJCA on Oregon General Fund collections.

As has been detailed earlier in the report, the dynamic response of the economy to tax cuts is likely to be

positive in the near term, as deficit spending leads to additional economic growth. Longer term, larger deficits

23

will weigh on growth somewhat. Although economic feedback will serve to offset the direct revenue impact of

the TJCA, the effect is not expected to be large.

Behavioral changes on the part of taxpayers are likely to move the needle more than will economic feedback.

The TJCA gives preference to certain taxpayers and activities while increasing the burden on others. There will

be a considerable amount of tax planning as taxpayers adjust to the provisions of the bill.

Tax planning around the TJCA is already affecting the timing of Oregon’s revenue collections. Year-end

estimated payments of personal income taxes for 2017 were up nearly 50% relative to last year. Advanced

corporate tax payments were up sharply at the end of 2017 as well. This growth was not unique to Oregon, with

many other states reporting even stronger gains. Taxpayers rushed to take advantage of expiring breaks,

including an uncapped deduction for state and local taxes paid. Since Oregon does not allow the prepayment of

state taxes, some of this money might be returned to filers next year. Tax payments related to the TCJA also are

appearing in the form of strong withholdings. Large year-end bonuses are driving withholdings significantly

above what recent wage growth alone can support. In general, with rates set to change, many businesses had

an incentive to pull forward costs into 2017, and push income into future years.

While changes in the timing of tax payments are already evident, it will take some time before it becomes clear

how many taxpayers will change their filing status in light of TJCA provisions. Some workers and investors could

choose to file as businesses. Also, some businesses could benefit by changing from passthrough entities into C-

Corporations, or the other way around.

One behavioral response that is assumed to have a large revenue impact is the second order effect of

multinational repatriation. After multinationals have brought their deferred income back home, and paid state

and federal taxes on it, what will they do with it? Will they continue to sit on it? Reinvest it in the business here

or abroad? During the repatriation holiday in 2004, more than half of repatriated income was returned to

individual shareholders. Although the size of the impact is uncertain, Oregon investors will be paid more taxable

dividends and see more taxable capital gains from stock buybacks.

Although the net impact on the

General Fund of federal tax reform

is expected to be positive in future

biennia, this is offset by a darker

outlook for equity markets. Earlier

this month (February 2018), stock

price indices fell by around 10% over

a few days. Such a drop only

happens every few years, however,

it doesn’t always spell disaster. For

now, the outlook calls for a quick

rebound along the lines of what was

seen during the November 2015 and

June 1990 market corrections. Animal spirits aside, equity prices are no longer way out of whack for where we

are in the cycle. Even with a quick rebound assumed, the drop in equity prices is expected to cost the General

Fund around $100 million per year in income tax revenue.

24

Given its high degree of dependence on Oregon’s relatively progressive income tax system, the General Fund is

very sensitive to equity prices. The performance of equity markets feed into personal and corporate tax liability

in many complex ways, but capital gains are the largest single piece.

Oregon’s realizations of taxable capital gains are extremely volatile, with revenues subject to the sometimes

unpredictable behavior of investors. Although housing wealth is playing a larger role in driving taxable capital

gains during the current business cycle than in the past, earnings and losses in stock markets account for the

lion’s share of movements in taxable capital gains in the typical year. Unfortunately, taxable capital gains are

even more volatile than are underlying asset prices. During the 2007 market crash, Oregon’s taxable capital

gains dropped from nearly $10 billion to just over $2 billion. A 10% drop in stock prices will typically lead to a

15%-20% decline in the amount of net capital gains reported on tax returns.

This negative impact on personal

income tax collections is often

delayed for several months after

investors pull their assets out of

equity markets. During a sell-off,

the volume of trades increases,

and paper gains from past years

become subject to tax.

Afterward, taxable capital gains

face considerable downward

pressure, with paper earnings

from past years having been

tapped, and with losses being

carried forward into future tax

years.

Should the stock market correction become severe, concerns spread beyond the direct impact on General Fund

revenues. There are many channels through which the performance of equity markets can feed back through

the economy:

Effect of Stock Prices on Earnings and Employment in Financial Service Industries

Given the nature of the regional economy, Oregon is relatively shielded from the adverse conditions

facing many parts of the financial service industry. Unlike San Francisco, Chicago, and the financial

centers of the Northeast, Oregon does not have much exposure to some of the hardest hit industry

segments such as investment houses and large banks. Oregon’s financial service industry is split roughly

evenly between real estate firms, insurance providers, and regional banks. As a share of overall

employment, Oregon is less concentrated in non-real estate activities than is the typical state.

Effect of Stock Prices on Local Business Investment

Oregon’s largest employers have traditionally not relied very heavily on equity markets to generate

capital for investments, which will help to mute the effect of stock price declines on the regional

economy. However, falling stock prices threaten to hurt regional investment in other, less direct, ways.

25

Small banks may see their margins pinched. The flow of venture capital is also threatened by lower stock

prices. When a risky investment bears fruit, venture capitalists reap the rewards by selling the successful

business model, often through equity markets.

Also, when stock prices fall, purchasing existing businesses becomes less expensive relative to investing

in new facilities and equipment. Not only can this slow the growth of Oregon’s capital stock, but may

also result in less demand for the many local firms that cater to corporate investors in other states and

countries (e.g. technology producers, metal makers, machinery firms and transportation equipment

producers).

Effect of Stock Prices on Consumer Spending

The drag posed by wealth losses among Oregon’s households represents the largest threat to the

regional economy resulting from stock price declines. The timing of the technology and housing bubbles

could not have been worse for household balance sheets. Households in the baby boom population

cohort were fooled by temporary wealth gains in the middle of their peak earning years, which was a

time when they should have been saving more than ever. Federal Reserve research models have

typically found that for each dollar of wealth lost, household spending is reduced by three to five cents.

2017-19 General Fund Revenues

General Fund revenues for the 2017-19 biennium are expected to reach $19,491 million. This represents a

decrease of $40.1 million from the December 2017 forecast, and an increase of just under $1 billion relative to

the 2015-17 biennium.

This outlook tracks

closely with the

assumptions used

when crafting the

budget. General Fund

revenues for the 2015-

17 biennium are

expected to come in

$61 million below the

Close of Session

forecast.

Personal Income Tax

Personal income tax

collections were

$2,191 million during

the second quarter of fiscal year 2018, $229 million (11.7%) above the latest forecast. Compared to the year-ago

level, total personal income tax collections grew by 14.5% relative to a forecast that called for a 2.5% increase.

(Millions)

2017 COS

Forecast

December 2017

Forecast

March 2018

Forecast

Change from

Prior Forecast

Change from

COS Forecast

Structural Revenues

Personal Income Tax $17,147.4 $17,118.5 $17,174.8 $56.2 $27.4

Corporate Income Tax $1,077.0 $1,078.0 $978.2 -$99.8 -$98.8

All Other Revenues $1,327.6 $1,334.3 $1,337.8 $3.5 $10.2

Gross GF Revenues $19,551.9 $19,530.8 $19,490.7 -$40.1 -$61.2

Offsets and Transfers -$75.5 -$73.9 -$67.0 $7.0 $8.5

Administrative Actions1 -$21.5 -$21.5 -$21.5 $0.0 $0.0

Legislative Actions -$180.1 -$180.1 -$179.4 $0.7 $0.7

Net Available Resources $20,055.7 $20,130.9 $20,200.8 $69.8 $145.0

Confidence Intervals

67% Confidence +/- 6.2% $1,206.3

95% Confidence +/- 12.4% $2,412.7

1 Reflects cost of cashflow management actions, ex clusiv e of internal borrow ing.

2017-19 General Fund Forecast Summary

$18.28B to $20.70B

$17.08B to $21.90B

Table R.1

26

Much of this rapid growth can be explained by reactions to the Tax Cuts and Jobs Act. In particular, year-end

estimated payments for 2017 were up nearly 50% relative to last year. This growth was not unique to Oregon,

with many other states reporting even stronger gains. Taxpayers rushed to take advantage of expiring breaks,

including an uncapped deduction for state and local taxes paid. Since Oregon does not allow the prepayment of

state taxes, some of this money might be returned to filers next year. Tax payments related to the TCJA also are

appearing as strong withholdings. Large year-end bonuses are driving withholdings significantly above what

wage growth alone can support. With rates set to change, businesses had an incentive to pull forward costs into

2017, and push income into future years. Table B.8 in Appendix B presents a comparison of actual and

projected personal income tax revenues for the October-December quarter.

Corporate Excise Tax

Corporate excise tax collections equaled $142 million for the second quarter of fiscal year 2018, $10.4 million

(7.9%) above the December forecast. Compared to the year-ago level, net corporate excise tax collections fell by

0.2% relative to a forecast that called for a 7.5% decrease.

Federal Tax Law Changes have injected a good deal of uncertainty into the outlook for corporate tax payments.

Some employees, investors, partnerships, S-corps and sole proprietorships face a larger tax incentive to

incorporate. Conversely, some C-corporations will benefit from becoming passthrough entities. Excluding these

behavioral changes, under current law, the TJCA stands to significantly reduce Oregon’s corporate tax collections

in the near term, while boosting them in later years. Accelerated depreciation provisions contribute to this

pattern, as does the repatriation of deferred income from multinational corporations. As Oregon’s tax law is

currently written, corporations can take a large dividend received deduction on both their state and federal

taxes, leading to revenue losses rather than a windfall.

Following sharp declines, corporate tax collections have stabilized in recent months. Even so, corporate

collections remain high relative to past years. In addition to profitability, recent law changes have supported

collections, as has a decline in outstanding Business Energy Tax Credits. The baseline outlook calls for corporate

collections to fluctuate around their current level going forward.

Other Sources of Revenue

While estate tax collections continue to be strong, they are no longer coming in significantly above forecast.

Estate taxes last biennium were $106 million above the 2015 Close of Session. Fiscal year 2017 set a record by a

considerable amount. This means, everything else

being equal, estate taxes accounted for 22% of the

state’s kicker for last biennium. This from a revenue

source that accounts for roughly 1% of General Fund

revenues.

In examining estate tax collections two clear trends

emerge. The first is that Oregon is seeing an

increase in the number of estates impacted by the

tax. Compared to other states and the federal

government, Oregon has a relatively low threshold

at $1 million. Given home prices and asset markets,

$1 million estates, while still very rare, are

27

somewhat more commonplace today than a decade ago. The second trend, which impacts the revenues to a

larger degree, is a considerable increase in the size of estates for a few taxpayers. Oregon tends to see

approximately 60 estate tax payers with estate valuations greater than $5 million each year. However in the last

decade, among these estates, the average size, and average tax payment has increased considerably. These

trends are heavily influenced by a handful of estates. Moving forward, the outlook for estate tax collections

remains strong. However not quite as strong as demographics and asset markets alone suggest due to tax

planning.

All told, General Fund revenues excluding personal and corporate taxes are increased by $3.5 million this

forecast, relative to the previous forecast. Such revenues are now $10.2 million above the Close of Session

outlook.

Extended General Fund Outlook

Table R.2 exhibits the long-run forecast for General Fund revenues through the 2025-27 biennium. Users should

note that the potential for error in the forecast increases substantially the further ahead we look.

Revenue growth in Oregon and other states will face considerable downward pressure over the 10-year

extended forecast horizon. As the baby boom population cohort works less and spends less, traditional state tax

instruments such as personal income taxes and general sales taxes will become less effective, and revenue

growth will fail to match the pace seen in the past.

Tax Law Assumptions

The revenue forecast is based on existing law, including measures and actions signed into law during the 2017

Oregon Legislative Session. OEA makes routine adjustments to the forecast to account for legislative and other

actions not factored into the personal and corporate income tax models. These adjustments can include

expected kicker refunds, when applicable, as well as any tax law changes not yet present in the historical data. A

summary of actions taken during the 2017 Legislative Session can be found in Appendix B Table B.3. For a

detailed treatment of the components of the 2017 Legislatively Enacted Budget, see: LFO 2017-19 Budget

Summary.

Table R.2

General Fund Revenue Forecast Summary (Millions of Dollars, Current Law)

Forecast Forecast Forecast Forecast Forecast Forecast

2015-17 % 2017-19 % 2019-21 % 2021-23 % 2023-25 % 2025-27 %

Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg

Personal Income Taxes 16,055.8 15.0% 17,174.8 7.0% 19,164.3 11.6% 21,089.6 10.0% 23,133.0 9.7% 25,519.0 10.3%

Corporate Income Taxes 1,210.7 8.4% 978.2 -19.2% 1,164.5 19.0% 1,336.5 14.8% 1,410.4 5.5% 1,462.1 3.7%

All Others 1,289.3 25.2% 1,337.8 3.8% 1,314.8 -1.7% 1,390.1 5.7% 1,465.3 5.4% 1,544.4 5.4%

Gross General Fund 18,555.9 15.2% 19,490.7 5.0% 21,643.5 11.0% 23,816.1 10.0% 26,008.7 9.2% 28,525.4 9.7%

Offsets and Transfers (32.9) (67.0) (74.7) (77.9) (82.5) (86.7)

Net Revenue 18,523.0 15.5% 19,423.8 4.9% 21,568.8 11.0% 23,738.3 10.1% 25,926.2 9.2% 28,438.7 9.7%

28

Although based on current law, many of the tax policies that impact the revenue forecast are not set in stone. In

particular, sunset dates for many large tax credits have been scheduled. As credits are allowed to disappear,

considerable support is lent to the revenue outlook in the outer years of the forecast. To the extent that tax

credits are extended and not allowed to expire when their sunset dates arrive, the outlook for revenue growth

will be reduced. The current forecast relies on estimates taken from the Oregon Department of Revenue’s 2017-

19 Tax Expenditure Report together with more timely updates produced by the Legislative Revenue Office.

29

Alternative Scenarios

The latest revenue forecast for the current biennium represents the most probable outcome given available

information. OEA feels that it is important that anyone using this forecast for decision-making purposes

recognize the potential for actual revenues to depart significantly from this projection.

Currently, the

overwhelming

downside risk

facing the revenue

outlook is the

threat that the U.S.

economic recovery

will lose steam in

the near term.

Such a scenario,

however it played

out, would result in

drastic revenue

losses. Two

recessionary

scenarios are

displayed in table

R.2b. In a severe

recession, biennial

revenues could

come in as much as

$2.4 billion lower

than predicted13.

Lottery Earnings

The lottery forecast

has been raised

sizably relative to

last quarter.

Available resources

for the 2017-19

13 The methodology for computing alternative scenarios has been changed to reflect recent work done by the Legislative Revenue Office. Assumptions: Recessions begin in 2018 and return to baseline income by 2025. The moderate recession scenario assumes personal income growth will be reduced by one-half relative to the baseline in 2018 and 2019. The severe recession scenario assumes personal income will decline in 2018 by as much as it did in 2009. The percentage deviation in personal income taxes is 1.4 times the deviation in personal income. The percentage deviation in corporate income taxes is 2.0 times the deviation in personal income.

TABLE R2b

Baseline Case FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 FY '23 FY '24 FY '25

Personal Income

Level 183.0 188.7 197.5 209.1 220.7 231.8 241.6 254.8 266.8 279.8

% change 6.1% 3.1% 4.7% 5.9% 5.6% 5.0% 4.2% 5.4% 4.7% 4.9%

Taxes

Personal Income 7,599 8,457 8,496 8,679 9,328 9,837 10,332 10,758 11,289 11,844

Corporate Excise & Income 603 608 557 421 563 601 648 688 702 708

Other General Fund 530 759 604 734 646 669 685 705 723 742

Total General Fund 8,732 9,824 9,657 9,834 10,537 11,106 11,665 12,151 12,714 13,294

% change 3.2% 12.5% -1.7% 1.8% 7.2% 5.4% 5.0% 4.2% 4.6% 4.6%

Moderate Recession FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 FY '23 FY '24 FY '25

Personal Income

Level 183.0 188.7 192.7 199.0 212.4 225.6 237.1 251.9 264.5 277.8

% change 6.1% 3.1% 2.1% 3.3% 6.7% 6.2% 5.1% 6.2% 5.0% 5.0%

Taxes

Personal Income 7,599 8,457 8,206 8,096 8,835 9,470 10,063 10,588 11,140 11,706

Deviation from baseline -290 -584 -492 -366 -269 -170 -149 -138

Corporate Excise & Income 603 608 530 380 521 569 624 673 690 698

Deviation from baseline -27 -40 -42 -32 -24 -16 -12 -10

Other General Fund 530 759 604 734 646 669 685 705 723 742

Total General Fund 8,732 9,824 9,340 9,210 10,002 10,708 11,372 11,965 12,553 13,146

% change 3.2% 12.5% -4.9% -1.4% 8.6% 7.1% 6.2% 5.2% 4.9% 4.7%

Deviation from baseline 0 -317 -624 -535 -398 -293 -185 -161 -148

Biennial Deviation 0 -941 -933 -479 -309

Severe Recession FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 FY '23 FY '24 FY '25

Personal Income

Level 183.0 188.7 180.0 188.7 204.3 219.6 233.4 250.6 263.1 276.3

% change 6.1% 3.1% -4.6% 4.9% 8.2% 7.5% 6.3% 7.3% 5.0% 5.0%

Taxes

Personal Income 7,599 8,457 7,441 7,496 8,353 9,114 9,842 10,509 11,058 11,619

Deviation from baseline -1,055 -1,183 -975 -723 -490 -249 -231 -224

Corporate Excise & Income 496 608 459 339 479 538 604 666 682 691

Deviation from baseline -99 -82 -84 -63 -44 -23 -20 -18

Other General Fund 530 759 604 734 646 669 685 705 723 742

Total General Fund 8,625 9,824 8,503 8,569 9,478 10,321 11,132 11,879 12,463 13,052

% change 3.2% 13.9% -13.4% 0.8% 10.6% 8.9% 7.9% 6.7% 4.9% 4.7%

Deviation from baseline -1,154 -1,265 -1,059 -786 -534 -271 -251 -242

Biennial Deviation -2,418 -1,845 -805 -493

March 2018

Alternative Cyclical Revenue Forecast ($ millions)

2015-17 BN 2017-19 BN 2019-21 BN 2021-23 BN 2023-25 BN

30

biennium are revised upward by $29.3 million (+2.1%) with the outer biennia raised between $4 million (+0.2%)

and $12 million (+0.9%). This upward revision is roughly split in half due to tracking and half due to increased

expectations for future sales. In particular, the largest single change in the outlook is a near-term adjustment to

video lottery sales at +$12.9 million in 2017-19 and +$8.6 million in 2019-2. This upward revision is the result of

removing any real hangover, or year-over-year declines due to the ilani Casino Resort in southwest Washington.

Over the forecast horizon there still is an impact built in, however expectations are now that sales will continue

slow, but remain positive on a year-over-year basis. Previous forecasts assumed there would be some outright

declines in the first year to 18 months after opening.

Cowlitz Tribe’s ilani Casino Resort Impact

Over the past year and a half our office has

incorporated a lower video lottery sales forecast due

to the opening of the ilani Casino Resort in

southwest Washington. The casino has now been

open for more than nine or ten months and there

has been a noticeable impact on Oregon video

lottery sales. However the impact is considerably

smaller than was initially expected. In the recent

sales data, the impact is averaging just 15 percent

the original estimate.

It is challenging to do a full and accurate

postmortem on the reasons for such a large error.

Many factors influenced the forecast itself and the grand opening and rollout of the casino was not without

issues either. That said there was a clear forecast mistake. Our office overestimated the impact of the new

casino on video lottery sales at the neighborhood level in North and Northeast Portland, and the impact on sales

throughout the rest of the Portland metropolitan area. Video lottery sales in zip codes along the Oregon-

Washington border in the Portland region have fallen around 15 percent, instead of the 40 percent expected.

The rest of the metro area sales have increased some compared with expectations of small declines. Sales in the

rest of Oregon, outside the Portland region continue to grow, which was expected.

In somewhat comforting news, our office was not alone is overestimating the initial impact of the new casino.

The Confederated Tribes of Grand Ronde, owners of the Spirit Mountain casino which was previously the closest

casino to the Portland metro region, announced back in fall that sales had fallen around 17 percent relative to

the previous year whereas they forecasted sales would fall by 40 percent.

31

Even as video lottery sales have come in considerably

higher than expected, the outlook remains uncertain. In

analyzing casino trends elsewhere in the country, sales

increase for a year or two after a new casino opens.

Furthermore expectations are that opening the gaming

floor is just phase one for the ilani Resort Casino. Future

expansions may include a buffet, and a hotel to attract

overnight guests and make it more of a destination and not

a day trip activity. In the event any of these options

materialized, our office would reassess the impact on video

lottery sales. Our office will continue to work with the

Oregon Lottery, particularly the research team, the Legislative Fiscal Office and Legislative Revenue Office to

monitor sales and discuss the outlook.

Lottery Sales and Distributions

The robust gains seen in video lottery sales following the first wave of terminal replacements have slowed. This

was expected. The second wave of replacements are nearing completion today, however their impact on sales is

less, even as the upgrade in new technology and underlying infrastructure is important.

Video lottery sales in the Portland region are flat year-over-year, primarily due to the new casino, while sales in

the rest of the state remain healthy.

Issues to watch include broader national trends in gaming markets, demographic preferences for recreational

activities, and to what extent consumers increase the share of their incomes spent on gaming. In much of the

past 6 years, consumers have remained cautious with

their disposable income.

Finally, Oregon voters last year approved two new

amendments for where lottery resources are to be

spent. The Outdoor School Education Fund is set to

receive the lesser of 4 percent of net proceeds or $5.5

million per quarter ($44 million per biennium),

adjusted for inflation. The Veterans’ Services Fund is

set to receive 1.5 percent of net proceeds.

The full extended outlook for lottery earnings can be

found in Table B.9 in Appendix B.

32

Budgetary Reserves

The state currently administers two general reserve accounts, the Oregon Rainy Day Fund14 (ORDF) and the

Education Stability Fund15 (ESF). This section updates balances and recalculates the outlook for these funds

based on the March revenue forecast.

As of this forecast, the two reserve funds currently total a combined $1.02 billion. Additionally there is a

projected General Fund ending balance for this biennium of $342.0 million, bringing effective reserves to $1.362

billion, or about 7 percent of current biennium’s revenue.

The forecast for the ORDF includes two deposits for this biennium. One relates to the General Fund ending

balance from last biennium (2015-17). A deposit of $179.4 million occurred in January 2018 after the

accountants closed the book on the biennium. The other one related to increased corporate taxes from Measure

67 during the 2015-17 biennium. A $16.2 million transfer occurred in September 2017. These bring the

projected ORDF ending balance at the end of 2017-19 to $594.5 million.

The forecast calls for $224.7 million in deposits into the ESF in 2017-19 based on the current Lottery forecast.

This would bring the ESF balance to $608.5 million at the end of the current biennium.

Together, the ORDF and ESF are projected to have a combined balance of $1.2 billion at the close of the 2017-19

biennium. Provided the General Fund ending balance remains unallocated, total effective reserves at the end of

2017-19 would total more than $1.5 billion, or nearly 8 percent of current revenues.

Such levels of reserve balances are bigger than Oregon has ever been able to accumulate, at least in the state’s

recent history. However, such reserves would barely be sufficient to withstand a typical recession’s impact on

state revenues, let alone account for

the increase in public services and

programs during downturns. That said,

reserves of approximately 7 percent are

generally accepted to withstand a

medium sized recession.

B.10 in Appendix B provides more

details for Oregon’s budgetary reserves.

14 The ORDF is funded from ending balances each biennium, up to one percent of appropriations. The Legislature can deposit

additional funds, as it did in first populating the ORDF with surplus corporate income tax revenues from the 2005-07

biennium. The ORDF also retains interest earnings. Withdrawals from the ORDF require one of three triggers, including a

decline in employment, a projected budgetary shortfall, or declaration of a state of emergency, plus a three-fifths vote.

Withdrawals are capped at two-thirds of the balance as of the beginning of the biennium in question. Fund balances are

capped at 7.5 percent of General Fund revenues in the prior biennium. 15 The ESF gained its current reserve structure and mechanics via constitutional amendment in 2002. The ESF receives 18

percent of lottery earnings, deposited on a quarterly basis – 5% of which are deposited in the Oregon Growth sub-account.

The ESF does not retain interest earnings. The ESF has similar triggers as the ORDF, but does not have the two-thirds cap on

withdrawals. The ESF balance is capped at five percent of General Fund revenues collected in the prior biennium.

Effective Reserves ($ millions)

Jan

2018

End

2017-19

ESF $445.0 $608.5

RDF $575.4 $594.5

Reserves $1,020.4 $1,203.0

Ending

Balance $342.0 $342.0

Total $1,362.4 $1,545.0

% of GF 7.0% 7.9%

0%

2%

4%

6%

8%

10%

12%

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Oregon Budgetary Reserves (billions)Gen. Fund Ending Balance Educ. Stability Fund Rainy Day Fund

Forecast -->

Percent of

General Fund -->

Source: Oregon Office of Economic Analysis

33

Recreational Marijuana Tax Collections

During the most recent legislative session, HB 3470 officially gave our office the responsibilities for forecasting

recreational marijuana taxes. Overall our office’s baseline outlook remains essentially unchanged given it has

tracked well since our very first such forecast back in May 2017. That said, after accounting for sales coming in

slightly above expectations in recent months and updating the program’s administrative costs, the net change to

the forecast for 2017-19 is +$0.6 million. The outer biennia each see a net $0.2 million reduction as the sales

outlook remains unchanged and administrative costs are updated to better reflect ongoing program costs.

Recreational Marijuana Forecast Process

In developing this outlook, our office held another preliminary forecast meeting with stakeholders from state

agencies, local governments and industry professionals. Our office also spoke again with our counterparts in

both Colorado and Washington to better understand what their experiences and to discuss marketplace trends.

Moving forward, our office will continue to work with stakeholders and those who can advise us on industry and

consumer trends, regulatory impacts, issues to watch, and the like.

Currently the outlook for recreational marijuana sales and tax collections remains highly uncertain. While

Oregon has now collected nearly two years’ worth of taxes, there have been substantial changes during this

time that complicate any analysis. Early start sales through medical dispensaries were taxed at a 25 percent of

rate, while sales at OLCC licensed retailers are now taxed at a 17 percent rate, with the local option of adding up

to 3 additional percent. Furthermore, regulatory changes, more stringent product testing requirements, and

Mother Nature all impacted and reduced available supply on the market during this time.

Combined, it is challenging to get a handle on the underlying trends in this newly legalized world. Thankfully,

Oregon is not alone. Both Colorado and Washington are two years ahead of Oregon. Both states have seen

tremendous growth in sales and tax collections, which serves as a guide for where Oregon is likely headed in the

near-term. Over time, as the market matures, future growth will follow trends in the economy and consumer

spending. However the coming few years will see strong growth as the product becomes more widely available,

more socially acceptable, and more black and gray market sales are realized in the legal market.

Almost two years’ worth of tax collections, and one set of quarterly tax returns filed by dispensaries is certainly

more valuable than no data. Our office’s forecasting responsibilities are made considerably easier than what

faced those estimating the potential impact of Measure 91 (2014) which legalized recreational sales. That said,

not quite two years’ worth of data is not enough to build a full-fledged forecasting model, particularly when it is

a brand new legal market. Over time, as we accumulate more data, a longer history of sales, and detailed

breakdowns of consumer purchases and consumer demographics, our office will build an econometric model.

Until then, in consultation with our advisory group, and using Colorado and Washington as a guide, our office is

relying on trends for the short-term outlook.

Recent Market Trends and State Comparisons

So far, Oregon’s first two years of recreational sales closely tracks Colorado’s first two years and outpaces

Washington’s, after controlling for the fact both states have larger populations than Oregon. There are at least

four main reasons for this pattern.

First, Oregon’s marijuana usage rates are higher than those seen in Washington. In fact, in the most recent

survey data from 2015-2016, Oregon saw a large increase in reported usage. As such, Oregon is more likely to

34

see larger sales than in Washington, when adjusting for

population size. While usage rates are not the only

metric that matters, it does make sense that Oregon

and Colorado are seeing similar sales figures, given they

have similar usage rates.

Second, prices and taxes matter. Oregon has a

significantly lower tax rate than does Washington,

which helps keep final consumer prices lower. Even as

Colorado and Washington have two additional years to

build their industry in the newly legalized world,

Oregon’s prices are very competitive with those seen in

the other states. A lower price, everything else equal,

should bring more consumers into the market and also

induce more black market conversions.

Third, the cross-border effect with legal sales beginning

earlier in Washington likely had an impact on Oregon’s

first year of sales. Counties in southwest Washington

saw sales fall by nearly 40 percent once Oregon’s early

sales began. Clearly there was plenty of cross-border

activity. Effectively this meant Oregon had somewhat of

a built-in customer base who were used to going to dispensaries and retailers and purchasing in the legal

market. Thus Oregon’s initial sales were larger than in Washington, but this may, at least in part, have some to

do with social acceptance and being used to the new system rather than fundamentally stronger sales.

Fourth, both Colorado and Washington initially had relatively few retail outlets in major population centers. In

Colorado, Denver had retailers but Boulder did not initially. In Washington, Seattle had only a few retailers at

first, but have added quite a few in recent years. As such, some of each state’s strong growth in the first two

years was simply due to market access and product availability, particularly in places where lots of people live. It

is unlikely this is a similar issue in Oregon, with our major population centers having dispensaries at first, and

retailers now.

In fact, today each state has just over 500 licensed

recreational marijuana dispensaries or retailers.

However once you account for the adult population size

differences, Oregon has more stores than either

Colorado or Washington. This does not necessarily mean

that Oregon is overstored. That may be the case,

however the other states may be understored. For

example, while Colorado has a bit more than 500

recreational licenses issued, the state supports 700+

marijuana businesses that sell recreational and/or

medical marijuana. At the least, the vast majority of

Oregon consumers do not lack for access to recreational marijuana.

35

Recreational Marijuana Outlook

In terms of the outlook, Oregon is poised for strong growth in the coming years. However, given the above and

the advice from our advisory group, our office is not forecasting revenues to be quite as strong as those seen in

Colorado over their third and four years. This outlook remains highly uncertain with substantial upside and

downside risks.

On the downside, supply constraints that keep products and inventory low will result in fewer sales, and tax

collections. Such constraints could be regulatory changes that impact grower, processors or retailers, or

regulatory bottlenecks where companies in the industry are unable to get their licenses, renewals or tests

completed or approved in a timely manner. Another downside risk for tax collections are prices, given Oregon

levies the tax based on the sales price. Recent data shows retail marijuana prices declining between 10 and 20

percent in Colorado, Washington, and Oregon. Marijuana is a commodity and eventually will be commoditized.

How far and how quickly prices decline is a risk to the outlook for tax collections. Offsetting this risk somewhat is

the fact that lower prices should result in larger sales. Finally, the one risk that looms large over the entire

forecast is the federal government, which recently rescinded the so-called Cole memo. While there as yet to be

any real action taken, there is a non-zero chance the federal government could step in and eliminate, or severely

restrict recreational marijuana sales. In this event, taxes collected would be considerably less than forecasted.

On the upside, consumers overall could get more

comfortable with legalized recreational marijuana

sales, and the industry gains broader social

acceptance, resulting in larger sales. As the chart on

the previous page shows, reported usage rates have

doubled in the past decade. Furthermore, a faster

rate of black market conversion would also result in

more legal sales. Similarly, conversions from the

medical marijuana market to the recreational

market would result in more sales and taxes

collections. The impact of the seed-to-sale tracking

system may also increase activity within the legal market, resulting in fewer black or grey market sales, provided

enforcement is effective.

Long-term the real economic impact from recreational marijuana will come not from the growing and retailing,

which are low-wage and low value-added market segments. It will come from higher value-added products like

oils, creams, and edibles, in addition to niche, specialty strains. These developments, as economist Beau

Whitney points out, would be quite similar to the emergence and growth of craft beer in recent decades. Here,

among the value-added manufacturing processes in addition to the building up of a broader cluster of suppliers

and ancillary industries that Oregon will see the real economic impacts. Furthermore, the long-term potential of

exporting Oregon products and business know-how to the rest of the country remains large, at least once

marijuana is legalized nationwide.

The other market development will be mass-produced and lower priced products. This is the end result of the

commodification of marijuana. Margins will be low, but due to scale, businesses remain viable. These are more

likely to be outdoor grows, due to costs. Even a world of legalized marijuana nationwide, it is plausible that

36

Oregon, along with California, would remain a national leader in this market due to agricultural and growing

conditions in the Emerald Triangle.

See Table B.11 in Appendix B for a full breakdown of distributions for recreational marijuana tax collections. Note

that these distributions are based on current law.

37

POPULATION AND DEMOGRAPHIC OUTLOOK

Population and Demographic Summary

Oregon’s population count on April 1, 2010 was 3,831,074. Oregon gained 409,550 persons between the years

2000 and 2010. The population growth during the decade of 2000 to 2010 was 12.0 percent, down from 20.4

percent growth from the previous decade. Oregon’s rankings in terms of decennial growth rate dropped from

11th between 1990-2000 to 18th between 2000 and 2010. Oregon’s national ranking, including D.C., in

population growth rate was 12th between 2010 and 2016 lagging behind all of the neighboring states, except

California. Slow population growth during the decade preceding the 2010 Census characterized by double

recessions probably cost Oregon one additional seat in the U.S. House of Representatives. Actually, Oregon’s

decennial population growth rate during the most recent decade was the second lowest since 1900. As a result

of economic downturn and sluggish recovery that followed, Oregon’s population increased at a slow pace in the

recent past. However, Oregon’s current population is showing very strong growth as a consequence of state’s

strong economic recovery. Population growth between 2015 and 2016 was 6th fastest in the nation. Based on

the current forecast, Oregon’s population of 4.14 million in 2017 will reach 4.63 million in the year 2026 with an

annual rate of growth of 1.2 percent between 2017 and 2026.

Oregon’s economic condition heavily influences the state’s population growth. Its economy determines the

ability to retain existing work force as well as attract job seekers from national and international labor market.

As Oregon’s total fertility rate remains below the replacement level and number of deaths continue to rise due

to ageing population, long-term growth comes mainly from net in-migration. Working-age adults come to

Oregon as long as we have favorable economic and employment environments. During the 1980s, which include

a major recession and a net loss of population during the early years, net migration contributed to 22 percent of

the population change. On the other extreme, net migration accounted for 76 percent of the population change

during the booming economy of early 1990s. This share of migration to population change declined to 32

percent in 2010, lowest since early 1980s when we actually had negative net migration for several years. As a

sign of slow to modest economic gain, the ratio of net migration-to-population change has already exceeded 80

percent and remain that way throughout the forecast horizon due largely to combination of continued high net

migration and rise in the number of deaths among elderly population associated with increasing number of

elderly population. Although economy and employment situation in Oregon looked stagnant in the recent past,

migration situation was not similar to the early 1980s pattern of negative net migration. Potential Oregon out-

migrants had no better place to go since other states were also in the same boat in terms of economy and

employment. California is the number one state of origin of migrants to Oregon. With improvement in

California’s housing market and Oregon’s growing economy continues, we expect positive impact on Oregon’s

net migration.

Age structure and its change affect employment, state revenue, and expenditure. Demographics are the major

budget drivers, which are modified by policy choices on service coverage and delivery. Growth in many age

groups will show the effects of the baby-boom and their echo generations during the period of 2017-2026. It will

also reflect demographics impacted by the depression era birth cohort combined with diminished migration of

working age population and elderly retirees. After a period of slow growth during the 1990s and early 2000s,

the elderly population (65+) has picked up a faster pace of growth and will surge to the record high levels as the

baby-boom generation continue to enter this age group and attrition of small depression era cohort due to

death. The average annual growth of the elderly population will be 3.4 percent during the 2017-2026 forecast

38

period. However, the youngest elderly (aged 65-74) has been growing at an extremely fast pace in the recent

past and will continue the trend in the near future exceeding 4 percent annual rate of growth due to the direct

impact of the baby-boom generation entering the retirement age and smaller pre-baby boom cohort exiting the

65-74 age group. This fast paced growth rate will taper off to below one percent by the end of the forecast

period as a sign of baby-boom generation’s transition to elderly age group. Reversing several years of slow

growth and shrinking population, the elderly aged 75-84 started to show a positive growth as the effect of

depression era birth-cohort has dissipated. An unprecedented fast pace of growth of population in this age

group has started as the baby-boom generation starts to mature into 75-84 age group. Annual growth rate

during the forecast period is expected to be unusually high 5.7 percent. The oldest elderly (aged 85+) will

continue to grow at a slow but steady rate in the near future due to the combination of cohort change,

continued positive net migration, and improving longevity. The average annual rate of growth for this oldest

elderly over the forecast horizon will be 2.0 percent. An unprecedented growth in oldest elderly will commence

near the end of the forecast horizon.

As the baby-boom generation matures out of oldest working-age cohort combined with slowing net migration,

the once fast-paced growth of population aged 45-64 has gradually tapered off to below zero percent rate of

growth by 2012 and will remain at slow or below zero growth phase for several years. The size of this older

working-age population will remain virtually unchanged at the beginning to the end of the forecast period. The

25-44 age group population is recovering from several years of declining and slow growing trend. The decline

was mainly due to the exiting baby-boom cohort. This age group has seen positive growth starting in the year

2004 and will increase by 1.7 percent annual average rate during the forecast horizon mainly because of the

exiting smaller birth (baby-bust) cohort being replaced by baby-boom echo cohort. The young adult population

(aged 18-24) will remain nearly unchanged over the forecast period. Although the slow or stagnant growth of

college-age population (age 18-24), in general, tend to ease the pressure on public spending on higher

education, college enrollment typically goes up during the time of very competitive job market, high

unemployment, and scarcity of well-paying jobs when even the older people flock back to colleges to better

position themselves in a tough job market. The growth in K-12 population (aged 5-17) will remain very low

which will translate into slow growth in school enrollments. This school-age population has actually declined in

size in recent past years and will grow in the future at well below the overall state average. The growth rate for

children under the age of five has remained below or near zero percent in the recent past due to the sharp

decline in the number of births. This cohort of children will see steady positive growth after 2016. Although the

number of children under the age of five declined in the recent years, the demand for child care services and

pre-Kindergarten program will be additionally determined by the labor force participation and poverty rates of

the parents. Overall, elderly population over age 65 will increase rapidly whereas population groups under age

65 will experience slow growth in the coming years. Hence, based solely on demographics of Oregon, demand

for public services geared towards children and young adults will likely to increase at a slower pace, whereas

demand for elderly care and services will increase rapidly.

Procedure and Assumptions

Population forecasts by age and sex are developed using the cohort-component projection procedure. The

population by single year of age and sex is projected based on the specific assumptions of vital events and

migrations. Oregon’s estimated population of July 1, 2010 based on the most recent decennial census is the

base for the forecast. To explain the cohort-component projection procedure very briefly, the forecasting model

39

"survives" the initial population distribution by age and sex to the next age-sex category in the following year,

and then applies age-sex-specific birth and migration rates to the mid-period population. Further iterations

subject the in-and-out migrants to the same mortality and fertility rates.

Populations by age-sex detail for the years 2000 through 2009, called intercensal estimates, in the following

tables are developed by OEA based on 2000 and 2010 censuses. Post-censal population totals for the years 2010

through 2015 are from the Population Research Center, Portland State University. The numbers of births and

deaths through 2015 are from Oregon's Center for Health Statistics. All other numbers and age-sex detail are

generated by OEA.

Annual numbers of births are determined from the age-specific fertility rates projected based on Oregon's past

trends and past and projected national trends. Oregon's total fertility rate is assumed to remain below the

replacement level of 2.1 children per woman during the forecast period, tracking at slightly lower than the

national rate.

Life Table survival rates are developed for the year 2010. Male and female life expectancies for the 2010-202

period are projected based on the past three decades of trends and national projected life expectancies.

Gradual improvements in life expectancies are expected over the forecast period. At the same time, the

difference between the male and female life expectancies will continue to shrink. The male life expectancy at

births of 77.4 and the female life expectancy of 81.8 in 2010 are projected to improve to 79.0 years for males

and 83.2 years for females by the year 2026.

Estimates and forecasts of the number of net migrations are based on the residuals from the difference between

population change and natural increase (births minus deaths) in a given forecast period. The migration

forecasting model uses Oregon’s employment, unemployment rates, income/wage data from Oregon and

neighboring states, and past trends. Distribution of migrants by age and sex is based on detailed data from the

American Community Survey. The annual net migration between 2017 and 2026 is expected to remain in the

range of 44,500 to 53,400, averaging 47,600 persons annually. Slowdown in Oregon’s economy in the recent

years resulted in smaller net migration and slow population growth. Estimated population growth and net

migration rates in 2010 and 2011 were the lowest in over two decades. Oregon’s population growth has already

rebounded and will continue high rate of growth in the near future. Migration is intrinsically related to economy

and employment situation of the state. Still, high unemployment and job loss in the recent past have impacted

net migration and population growth, but not to the extent in the early 1980s. Main reason for this is the fact

that other states of potential destination for Oregon out-migrants were not faring any better either. Hence the

potential out-migrants had very limited destination choices. The future growth will not look like high growth

period of 1990s. The role of net migration in Oregon’s population growth will get more prominence as the

natural increase will decline considerably due to rapid increase in the number of deaths associated with ageing

population.

40

APPENDIX A: ECONOMIC FORECAST DETAIL

Table A.1 Employment Forecast Tracking …………………………………................................................. 41

Table A.2 Short-term Oregon Economic Summary ………………...................................................... 42

Table A.3 Oregon Economic Forecast Change ………………………………….……………………….…………… 43

Table A.4 Annual Economic Forecast ……………………………………………….……………..………………………. 44

41

Table A.1 – Employment Forecast Tracking

Total Nonfarm Employment, 4th quarter 2017

(Employment in thousands, Annualized Percent Change)

Y/Y

Change

level % ch level % ch level % % ch

Total Nonfarm 1,884.9 1.4 1,894.2 2.8 (9.3) (0.5) 2.0

Total Private 1,573.5 2.4 1,579.1 3.0 (5.6) (0.4) 2.3

Mining and Logging 7.0 7.5 7.1 5.3 (0.1) (0.7) (2.4)

Construction 98.9 2.9 100.1 3.7 (1.2) (1.2) 6.6

Manufacturing 190.9 2.9 191.2 1.5 (0.3) (0.1) 1.5

Durable Goods 132.4 2.5 132.7 1.5 (0.3) (0.2) 1.1

Wood Product 23.0 2.8 23.0 2.3 0.0 0.1 1.1

Metals and Machinery 37.6 5.1 37.4 1.7 0.2 0.6 2.7

Computer and Electronic Product 37.4 4.8 37.4 1.5 0.0 0.0 0.2

Transportation Equipment 11.7 (9.4) 12.0 1.7 (0.3) (2.8) (2.4)

Other Durable Goods 22.7 0.7 22.9 0.4 (0.2) (0.9) 2.0

Nondurable Goods 58.5 4.0 58.5 1.6 0.0 0.0 2.4

Food 30.1 8.0 30.1 1.3 0.0 0.1 2.6

Other Nondurable Goods 28.4 (0.1) 28.4 1.9 0.0 0.0 2.1

Trade, Transportation & Utilities 349.7 (0.3) 352.8 1.7 (3.1) (0.9) 1.4

Retail Trade 210.0 0.5 210.7 0.3 (0.7) (0.4) 1.5

Wholesale Trade 75.9 (3.9) 77.5 3.1 (1.5) (2.0) (0.0)

Transportation, Warehousing & Utilities 63.7 1.6 64.6 4.4 (0.8) (1.3) 2.6

Information 34.2 2.1 34.6 0.3 (0.4) (1.0) 1.9

Financial Activities 99.2 2.2 99.8 5.0 (0.6) (0.6) 1.8

Professional & Business Services 245.0 2.9 244.4 3.7 0.6 0.3 2.3

Educational & Health Services 274.7 1.4 277.5 5.0 (2.8) (1.0) 2.2

Educational Services 36.4 (5.3) 36.3 (1.7) 0.2 0.5 2.5

Health Services 238.3 2.4 241.3 6.1 (3.0) (1.2) 2.2

Leisure and Hospitality 210.0 7.5 208.2 2.9 1.7 0.8 3.9

Other Services 63.9 1.8 63.5 2.0 0.4 0.6 (0.7)

Government 311.4 (3.4) 315.1 1.7 (3.7) (1.2) 0.9

Federal 28.1 (1.5) 28.2 0.5 (0.1) (0.4) (1.1)

State 57.3 (12.4) 56.8 (17.2) 0.5 0.9 0.5

State Education 0.9 (28.4) 0.8 (52.6) 0.1 8.8 (7.6)

Local 226.0 (1.2) 230.1 7.3 (4.1) (1.8) 1.3

Local Education 132.0 (3.4) 137.8 17.7 (5.8) (4.2) 0.9

Estimate

Preliminary Forecast ErrorForecast

42

Table A.2 – Short-Term Oregon Economic Summary

Oregon Forecast Summary

2017:4 2018:1 2018:2 2018:3 2018:4 2016 2017 2018 2019 2020 2021

Nominal Personal Income 196.2 198.8 201.8 204.8 207.6 185.8 192.6 203.2 214.9 226.3 237.3

% change 6.4 5.4 6.1 6.0 5.7 4.2 3.7 5.5 5.7 5.3 4.9

173.0 174.8 177.0 179.0 180.8 167.7 171.0 177.9 185.0 190.7 195.8

% change 3.7 4.2 5.2 4.4 4.1 2.9 1.9 4.0 4.0 3.1 2.7

Nominal Wages and Salaries 102.5 103.9 105.7 107.4 109.0 96.0 100.2 106.5 113.1 118.8 124.3

% change 7.1 5.6 6.8 6.5 6.5 5.4 4.3 6.3 6.2 5.1 4.6

Per Capita Income ($1,000) 47.0 47.5 48.0 48.5 49.0 45.5 46.4 48.3 50.3 52.3 54.1

% change 4.9 4.1 4.6 4.2 4.3 2.6 2.1 4.0 4.3 3.9 3.6

Average Wage rate ($1,000) 53.7 54.3 54.9 55.5 56.0 51.9 53.0 55.2 57.4 59.7 62.1

% change 4.4 4.6 4.4 4.1 4.0 2.3 2.1 4.2 4.1 4.0 4.0

Population (Millions) 4.2 4.2 4.2 4.2 4.2 4.09 4.15 4.21 4.27 4.33 4.38

% change 1.4 1.3 1.5 1.7 1.3 1.5 1.6 1.5 1.4 1.3 1.3

Housing Starts (Thousands) 19.5 19.6 20.4 21.0 21.1 19.1 19.0 20.5 22.1 23.7 24.6

% change (25.4) 2.2 17.2 11.1 3.4 19.8 (0.3) 8.1 7.7 7.2 3.7

Unemployment Rate 4.2 4.3 4.4 4.5 4.5 4.9 4.0 4.4 4.5 4.7 4.8

Point Change 0.2 0.0 0.2 0.1 0.0 (0.7) (0.9) 0.4 0.1 0.1 0.1

Total Nonfarm 1,884.9 1,895.3 1,906.5 1,917.6 1,928.9 1,833.5 1,872.8 1,912.1 1,952.2 1,972.9 1,983.9

% change 1.4 2.2 2.4 2.3 2.4 2.9 2.1 2.1 2.1 1.1 0.6

Private Nonfarm 1,573.5 1,583.0 1,592.8 1,602.7 1,612.8 1,526.3 1,562.0 1,597.8 1,633.1 1,648.9 1,657.8

% change 2.4 2.4 2.5 2.5 2.5 3.1 2.3 2.3 2.2 1.0 0.5

Construction 98.9 99.5 99.9 100.1 100.6 90.3 97.1 100.0 100.9 101.2 101.5

% change 2.9 2.3 1.5 0.9 2.1 8.5 7.5 3.0 0.9 0.3 0.3

Manufacturing 190.9 191.9 192.6 193.2 193.9 188.1 189.6 192.9 195.4 196.8 197.5

% change 2.9 2.1 1.4 1.4 1.3 1.0 0.8 1.8 1.3 0.7 0.4

Durable Manufacturing 132.4 133.1 133.6 134.0 134.5 131.2 131.5 133.8 135.5 136.4 136.6

% change 2.5 2.0 1.6 1.3 1.4 0.6 0.2 1.8 1.3 0.6 0.2

Wood Product Manufacturing 23.0 23.1 23.1 23.1 23.2 22.7 22.9 23.1 23.2 23.5 23.7

% change 2.8 1.4 0.1 (0.1) 1.3 1.0 0.9 0.8 0.5 1.2 0.7

High Tech Manufacturing 37.4 37.5 37.6 37.7 37.8 37.9 36.9 37.6 38.1 38.3 38.0

% change 4.8 0.9 1.1 1.1 1.5 0.4 (2.7) 2.0 1.4 0.3 (0.8)

Transportation Equipment 11.7 11.8 11.9 12.0 12.0 12.2 11.8 11.9 12.0 12.0 12.0

% change (9.4) 5.1 2.2 1.8 1.5 (2.6) (2.8) 0.9 1.0 (0.2) (0.4)

Nondurable Manufacturing 58.5 58.9 59.0 59.2 59.4 56.9 58.1 59.1 59.9 60.4 60.9

% change 4.0 2.2 0.7 1.4 1.2 2.0 2.1 1.7 1.3 0.8 0.8

Private nonmanufacturing 1,382.6 1,391.0 1,400.2 1,409.4 1,418.9 1,338.2 1,372.4 1,404.9 1,437.8 1,452.2 1,460.4

% change 2.4 2.5 2.7 2.7 2.7 3.4 2.6 2.4 2.3 1.0 0.6

Retail Trade 210.0 210.7 211.4 211.9 212.5 205.9 210.2 211.6 213.9 215.2 215.7

% change 0.5 1.4 1.2 1.1 1.1 1.8 2.1 0.7 1.1 0.6 0.3

Wholesale Trade 75.9 76.5 76.9 77.4 77.7 75.6 76.5 77.1 78.2 78.7 79.0

% change (3.9) 2.8 2.5 2.3 1.7 2.1 1.2 0.8 1.4 0.6 0.4

Information 34.2 34.4 34.6 34.7 34.9 33.5 34.2 34.6 35.1 35.4 35.5

% change 2.1 2.2 2.4 1.8 1.6 1.6 2.3 1.3 1.3 0.7 0.4

Professional and Business Services 245.0 248.2 251.7 255.4 259.5 238.2 243.3 253.7 268.9 277.2 281.8

% change 2.9 5.4 5.8 5.9 6.6 3.9 2.1 4.3 6.0 3.1 1.7

Health Services 238.3 240.0 241.7 243.4 245.1 230.4 236.4 242.6 248.9 251.7 254.4

% change 2.4 2.9 2.9 2.9 2.8 3.5 2.6 2.6 2.6 1.1 1.1

Leisure and Hospitality 210.0 210.4 211.4 212.6 213.3 199.8 206.3 211.9 214.7 214.5 213.3

% change 7.5 0.8 2.0 2.2 1.4 4.3 3.3 2.7 1.3 (0.1) (0.5)

Government 311.4 312.4 313.7 314.9 316.1 307.2 310.8 314.3 319.0 324.0 326.1

% change (3.4) 1.3 1.6 1.6 1.5 2.0 1.2 1.1 1.5 1.6 0.6

Personal Income ($ billions)

Other Indicators

Employment (Thousands)

Annual

Real Personal Income (base year=2005)

Quarterly

43

Table A.3 – Oregon Economic Forecast Change

Oregon Forecast Change (Current vs. Last)

2017:4 2018:1 2018:2 2018:3 2018:4 2016 2017 2018 2019 2020 2021

Nominal Personal Income 196.2 198.8 201.8 204.8 207.6 185.8 192.6 203.2 214.9 226.3 237.3

% change (0.2) (0.3) (0.1) 0.1 0.2 0.0 (0.1) (0.0) 0.3 0.1 0.1

173.0 174.8 177.0 179.0 180.8 167.7 171.0 177.9 185.0 190.7 195.8

% change (0.5) (0.5) (0.2) 0.1 0.2 0.0 (0.2) (0.1) 0.3 0.1 (0.1)

Nominal Wages and Salaries 102.5 103.9 105.7 107.4 109.0 96.0 100.2 106.5 113.1 118.8 124.3

% change (0.6) (0.8) (0.7) (0.5) (0.4) 0.0 (0.1) (0.6) (0.2) (0.4) (0.7)

Per Capita Income ($1,000) 47.0 47.5 48.0 48.5 49.0 45.5 46.4 48.3 50.3 52.3 54.1

% change (0.2) (0.3) (0.1) 0.1 0.2 0.0 (0.1) (0.0) 0.3 0.1 0.1

Average Wage rate ($1,000) 53.7 54.3 54.9 55.5 56.0 51.9 53.0 55.2 57.4 59.7 62.1

% change (0.4) (0.4) (0.3) (0.3) (0.3) 0.0 (0.1) (0.3) (0.4) (0.6) (0.7)

Population (Millions) 4.17 4.19 4.20 4.2 4.2 4.09 4.15 4.21 4.27 4.33 4.38

% change 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Housing Starts (Thousands) 19.5 19.6 20.4 21.0 21.1 19.1 19.0 20.5 22.1 23.7 24.6

% change (3.1) (9.5) (9.0) (8.7) (6.9) (0.0) (0.9) (8.5) (4.0) (1.0) 0.1

Unemployment Rate 4.2 4.3 4.4 4.5 4.5 4.9 4.0 4.4 4.5 4.7 4.8

Point Change 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Nonfarm 1,884.9 1,895.3 1,906.5 1,917.6 1,928.9 1,833.5 1,872.8 1,912.1 1,952.2 1,972.9 1,983.9

% change (0.5) (0.4) (0.3) (0.3) (0.1) (0.0) (0.2) (0.3) 0.2 0.2 0.0

Private Nonfarm 1,573.5 1,583.0 1,592.8 1,602.7 1,612.8 1,526.3 1,562.0 1,597.8 1,633.1 1,648.9 1,657.8

% change (0.4) (0.3) (0.1) (0.1) 0.1 0.0 (0.1) (0.1) 0.5 0.5 0.3

Construction 98.9 99.5 99.9 100.1 100.6 90.3 97.1 100.0 100.9 101.2 101.5

% change (1.2) (0.3) 0.3 0.3 0.7 (0.0) (0.6) 0.2 0.7 0.6 0.6

Manufacturing 190.9 191.9 192.6 193.2 193.9 188.1 189.6 192.9 195.4 196.8 197.5

% change (0.1) 0.0 (0.1) (0.0) 0.1 (0.0) (0.2) 0.0 0.4 0.6 0.4

Durable Manufacturing 132.4 133.1 133.6 134.0 134.5 131.2 131.5 133.8 135.5 136.4 136.6

% change (0.2) (0.0) 0.1 0.1 0.3 0.0 (0.2) 0.1 0.7 1.1 0.9

Wood Product Manufacturing 23.0 23.1 23.1 23.1 23.2 22.7 22.9 23.1 23.2 23.5 23.7

% change 0.1 0.4 0.2 0.2 0.5 0.0 (0.0) 0.3 0.3 0.7 0.7

High Tech Manufacturing 37.4 37.5 37.6 37.7 37.8 37.9 36.9 37.6 38.1 38.3 38.0

% change 0.0 (0.1) (0.3) (0.4) (0.4) (0.0) (0.2) (0.3) 0.7 1.4 1.1

Transportation Equipment 11.7 11.8 11.9 12.0 12.0 12.2 11.8 11.9 12.0 12.0 12.0

% change (2.8) (1.8) (1.6) (1.7) (1.7) 0.0 (0.7) (1.7) (1.6) (2.0) (2.9)

Nondurable Manufacturing 58.5 58.9 59.0 59.2 59.4 56.9 58.1 59.1 59.9 60.4 60.9

% change 0.0 0.1 (0.3) (0.3) (0.4) (0.0) (0.2) (0.2) (0.3) (0.4) (0.7)

Private nonmanufacturing 1,382.6 1,391.0 1,400.2 1,409.4 1,418.9 1,338.2 1,372.4 1,404.9 1,437.8 1,452.2 1,460.4

% change (0.4) (0.3) (0.2) (0.1) 0.1 0.0 (0.1) (0.1) 0.5 0.5 0.3

Retail Trade 210.0 210.7 211.4 211.9 212.5 205.9 210.2 211.6 213.9 215.2 215.7

% change (0.4) (0.1) 0.1 0.2 0.4 0.0 (0.2) 0.1 0.6 0.5 0.4

Wholesale Trade 75.9 76.5 76.9 77.4 77.7 75.6 76.5 77.1 78.2 78.7 79.0

% change (2.0) (1.6) (1.3) (0.9) (0.7) 0.0 (0.6) (1.1) (0.2) (0.0) 0.0

Information 34.2 34.4 34.6 34.7 34.9 33.5 34.2 34.6 35.1 35.4 35.5

% change (1.0) (0.5) (0.0) 0.2 0.4 0.0 (0.7) (0.0) 0.7 0.6 0.5

Professional and Business Services 245.0 248.2 251.7 255.4 259.5 238.2 243.3 253.7 268.9 277.2 281.8

% change 0.3 0.4 0.5 0.8 1.0 0.0 0.2 0.7 1.2 1.2 0.7

Health Services 238.3 240.0 241.7 243.4 245.1 230.4 236.4 242.6 248.9 251.7 254.4

% change (1.2) (1.1) (1.1) (1.2) (0.9) 0.0 (0.4) (1.1) 0.1 0.3 0.0

Leisure and Hospitality 210.0 210.4 211.4 212.6 213.3 199.8 206.3 211.9 214.7 214.5 213.3

% change 0.8 0.3 0.4 0.4 0.4 (0.0) 0.1 0.4 0.6 0.6 0.5

Government 311.4 312.4 313.7 314.9 316.1 307.2 310.8 314.3 319.0 324.0 326.1

% change (1.2) (1.3) (1.4) (1.4) (1.4) (0.0) (0.3) (1.4) (1.3) (1.2) (1.3)

Employment (Thousands)

Personal Income ($ billions)

Quarterly Annual

Real Personal Income (base year=2005)

Other Indicators

44

Table A.4 – Annual Economic Forecast

Mar 2018 - Personal Income

(Billions of Current Dollars)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Total Personal Income*

Oregon 185.8 192.6 203.2 214.9 226.3 237.3 248.9 260.6 273.3 286.5 300.6 315.2

% Ch 4.2 3.7 5.5 5.7 5.3 4.9 4.9 4.7 4.9 4.8 4.9 4.9

U.S. 15,928.7 16,415.9 17,132.9 18,031.3 18,933.8 19,795.8 20,663.3 21,582.5 22,521.1 23,490.3 24,504.6 25,561.6

% Ch 2.4 3.1 4.4 5.2 5.0 4.6 4.4 4.4 4.3 4.3 4.3 4.3

Wage and Salary

Oregon 96.0 100.2 106.5 113.1 118.8 124.3 129.9 135.9 142.5 149.5 156.9 164.5

% Ch 5.4 4.3 6.3 6.2 5.1 4.6 4.6 4.6 4.9 4.9 4.9 4.9

U.S. 8,085.2 8,338.6 8,709.2 9,184.0 9,630.7 10,051.4 10,494.5 10,968.2 11,475.8 12,002.4 12,556.4 13,140.7

% Ch 2.9 3.1 4.4 5.5 4.9 4.4 4.4 4.5 4.6 4.6 4.6 4.7

Other Labor Income

Oregon 22.2 23.2 24.1 25.0 26.0 27.1 28.3 29.4 30.7 32.0 33.4 34.7

% Ch 5.0 4.6 3.9 3.7 4.2 4.3 4.2 4.1 4.2 4.3 4.2 4.0

U.S. 1,309.8 1,345.9 1,383.2 1,426.9 1,475.7 1,524.3 1,575.1 1,629.3 1,686.0 1,744.5 1,804.3 1,866.1

% Ch 2.5 2.8 2.8 3.2 3.4 3.3 3.3 3.4 3.5 3.5 3.4 3.4

Nonfarm Proprietor's Income

Oregon 14.3 15.0 15.7 16.4 16.9 17.4 18.1 18.8 19.5 20.2 21.1 22.0

% Ch 9.5 4.8 4.5 4.3 3.4 2.6 3.9 3.9 3.7 3.9 4.2 4.2

U.S. 1,298.7 1,349.7 1,403.4 1,456.9 1,498.6 1,533.0 1,575.5 1,622.5 1,666.2 1,714.3 1,760.2 1,817.1

% Ch 2.7 3.9 4.0 3.8 2.9 2.3 2.8 3.0 2.7 2.9 2.7 3.2

Dividend, Interest and Rent

Oregon 36.8 38.1 40.3 42.6 45.1 47.7 50.2 52.5 54.7 56.9 59.3 61.7

% Ch 1.8 3.5 5.9 5.6 6.0 5.7 5.1 4.6 4.2 4.0 4.2 4.0

U.S. 3,085.1 3,185.7 3,343.7 3,513.6 3,716.2 3,924.1 4,116.3 4,296.9 4,471.2 4,648.2 4,847.8 5,048.1

% Ch 1.2 3.3 5.0 5.1 5.8 5.6 4.9 4.4 4.1 4.0 4.3 4.1

Transfer Payments

Oregon 36.6 37.2 38.8 41.1 43.6 46.2 48.9 51.8 55.0 58.3 61.8 65.6

% Ch 2.4 1.6 4.2 5.9 6.2 5.9 5.9 5.9 6.2 6.1 6.0 6.1

U.S. 2,722.1 2,819.5 2,961.1 3,121.3 3,301.1 3,497.4 3,714.1 3,946.3 4,197.8 4,464.3 4,739.3 5,023.8

% Ch 3.6 3.6 5.0 5.4 5.8 5.9 6.2 6.3 6.4 6.3 6.2 6.0

Contributions for Social Security

Oregon 16.7 17.6 18.5 19.4 20.4 21.3 22.3 23.4 24.7 25.9 27.2 28.4

% Ch 4.6 5.3 4.9 5.1 5.0 4.8 4.5 5.1 5.2 5.1 4.8 4.7

U.S. 661.7 691.3 718.1 749.5 783.2 815.7 850.5 888.1 928.6 970.8 1,015.2 1,062.3

% Ch 3.9 4.5 3.9 4.4 4.5 4.1 4.3 4.4 4.6 4.5 4.6 4.6

Residence Adjustment

Oregon (3.9) (4.1) (4.2) (4.3) (4.4) (4.5) (4.6) (4.7) (4.8) (5.0) (5.1) (5.3)

% Ch 5.6 3.4 2.8 2.6 2.4 2.3 2.0 2.2 2.9 3.0 2.7 3.2

Farm Proprietor's Income

Oregon 0.5 0.6 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4

% Ch (40.9) 11.9 (18.9) 5.1 1.9 (7.3) (10.6) 0.8 2.9 1.6 1.4 1.6

Per Capita Income (Thousands of $)

Oregon 45.5 46.4 48.3 50.3 52.3 54.1 56.1 58.1 60.2 62.5 64.8 67.3

% Ch 2.6 2.1 4.0 4.3 3.9 3.6 3.6 3.5 3.7 3.7 3.8 3.8

U.S. 49.2 50.4 52.2 54.5 56.7 58.9 61.0 63.2 65.5 67.8 70.2 72.7

% Ch 1.7 2.3 3.5 4.4 4.2 3.7 3.6 3.7 3.6 3.5 3.6 3.6

* Personal Income includes all classes of income minus Contributions for Social Security

45

Mar 2018 - Employment By Industry(Oregon - Thousands, U.S. - Millions)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Total Nonfarm

Oregon 1,833.5 1,872.8 1,912.1 1,952.2 1,972.9 1,983.9 1,994.6 2,004.9 2,017.6 2,031.8 2,045.5 2,058.1

% Ch 2.9 2.1 2.1 2.1 1.1 0.6 0.5 0.5 0.6 0.7 0.7 0.6

U.S. 144.3 146.5 148.8 151.0 152.1 152.4 153.1 153.8 154.4 155.0 155.6 156.2

% Ch 1.8 1.5 1.6 1.5 0.7 0.3 0.4 0.5 0.4 0.4 0.4 0.4

Private Nonfarm

Oregon 1,526.3 1,562.0 1,597.8 1,633.1 1,648.9 1,657.8 1,665.2 1,672.6 1,682.4 1,693.3 1,703.3 1,711.9

% Ch 3.1 2.3 2.3 2.2 1.0 0.5 0.4 0.4 0.6 0.7 0.6 0.5

U.S. 122.1 124.1 126.3 128.4 129.1 129.4 129.9 130.4 130.9 131.3 131.8 132.2

% Ch 1.9 1.7 1.8 1.6 0.6 0.3 0.4 0.4 0.4 0.3 0.3 0.3

Mining and Logging

Oregon 7.5 7.0 7.2 7.3 7.4 7.5 7.6 7.6 7.7 7.7 7.8 7.8

% Ch (2.9) (7.7) 3.2 2.2 1.3 1.0 0.9 0.7 0.6 0.8 0.6 0.5

U.S. 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

% Ch (16.6) 4.6 4.8 2.9 3.3 2.2 1.5 1.2 1.0 0.0 (1.0) (0.8)

Construction

Oregon 90.3 97.1 100.0 100.9 101.2 101.5 101.8 102.2 102.4 103.0 103.9 105.0

% Ch 8.5 7.5 3.0 0.9 0.3 0.3 0.3 0.4 0.2 0.6 0.8 1.1

U.S. 6.7 6.9 7.0 7.3 7.6 7.8 7.9 8.1 8.2 8.4 8.5 8.6

% Ch 3.9 2.8 1.8 3.6 3.9 2.6 2.4 2.0 1.8 1.7 1.4 1.4

Manufacturing

Oregon 188.1 189.6 192.9 195.4 196.8 197.5 198.1 198.6 199.5 200.6 201.8 203.0

% Ch 1.0 0.8 1.8 1.3 0.7 0.4 0.3 0.3 0.4 0.6 0.6 0.6

U.S. 12.3 12.4 12.7 12.9 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.1

% Ch 0.1 0.7 2.1 1.6 0.9 (0.0) (0.2) (0.1) (0.0) 0.2 0.4 0.2

Durable Manufacturing

Oregon 131.2 131.5 133.8 135.5 136.4 136.6 136.7 136.8 137.1 137.6 138.2 138.7

% Ch 0.6 0.2 1.8 1.3 0.6 0.2 0.1 0.1 0.2 0.4 0.4 0.4

U.S. 7.7 7.8 8.0 8.1 8.2 8.2 8.2 8.2 8.2 8.2 8.3 8.3

% Ch (0.6) 0.5 2.6 2.0 1.2 0.1 (0.2) (0.1) (0.0) 0.3 0.7 0.5

Wood Products

Oregon 22.7 22.9 23.1 23.2 23.5 23.7 23.7 23.8 24.0 24.0 24.1 24.2

% Ch 1.0 0.9 0.8 0.5 1.2 0.7 0.3 0.4 0.5 0.4 0.2 0.2

U.S. 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5

% Ch 2.5 0.7 3.2 6.0 4.1 2.8 2.7 3.0 2.7 2.0 2.0 1.6

Metal and Machinery

Oregon 36.7 37.2 38.2 38.9 39.3 39.4 39.4 39.6 39.8 40.2 40.5 40.8

% Ch (0.5) 1.4 2.8 1.8 0.9 0.4 0.1 0.4 0.7 0.9 0.8 0.6

U.S. 2.9 2.9 3.0 3.1 3.2 3.2 3.2 3.2 3.3 3.3 3.3 3.3

% Ch (3.0) 1.2 3.6 2.6 1.7 0.4 0.6 1.0 1.0 0.8 0.8 0.2

Computer and Electronic Products

Oregon 37.9 36.9 37.6 38.1 38.3 38.0 37.8 37.5 37.3 37.2 37.1 37.1

% Ch 0.4 (2.7) 2.0 1.4 0.3 (0.8) (0.5) (0.7) (0.5) (0.3) (0.1) (0.1)

U.S. 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1

% Ch (0.5) (0.6) 3.7 2.7 0.8 0.1 0.5 0.2 0.3 0.2 (0.2) (0.6)

Transportation Equipment

Oregon 12.2 11.8 11.9 12.0 12.0 12.0 11.9 11.9 11.9 11.9 11.9 11.9

% Ch (2.6) (2.8) 0.9 1.0 (0.2) (0.4) (0.3) (0.2) (0.3) (0.1) 0.0 0.4

U.S. 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.4 1.5 1.5

% Ch 1.3 (0.6) 0.9 0.2 0.4 (1.6) (3.4) (3.6) (3.4) (1.0) 0.9 1.7

Other Durables

Oregon 21.8 22.7 22.9 23.2 23.3 23.6 23.8 24.0 24.1 24.3 24.6 24.8

% Ch 4.3 4.0 1.1 1.1 0.6 1.1 1.0 0.7 0.7 0.9 0.9 1.0

U.S. 2.2 2.2 2.2 2.3 2.3 2.3 2.3 2.4 2.4 2.4 2.4 2.4

% Ch 1.3 1.0 2.2 1.9 1.3 0.6 0.7 0.7 0.6 0.6 0.8 0.6

Nondurable Manufacturing

Oregon 56.9 58.1 59.1 59.9 60.4 60.9 61.4 61.8 62.3 63.0 63.7 64.2

% Ch 2.0 2.1 1.7 1.3 0.8 0.8 0.9 0.7 0.8 1.1 1.0 0.9

U.S. 4.6 4.7 4.7 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8

% Ch 1.3 0.9 1.3 0.9 0.4 (0.2) (0.2) (0.0) (0.0) (0.1) (0.1) (0.1)

Food Manufacturing

Oregon 29.1 29.8 30.3 30.9 31.1 31.4 31.7 31.8 32.0 32.4 32.7 33.1

% Ch 3.1 2.5 1.7 1.9 0.7 1.0 0.8 0.4 0.7 1.0 1.1 1.1

U.S. 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.9

% Ch 2.8 2.7 2.3 2.7 1.5 1.1 1.2 1.6 1.5 1.3 1.2 1.0

Other Nondurable

Oregon 27.8 28.3 28.8 29.0 29.3 29.4 29.7 30.0 30.3 30.6 30.9 31.2

% Ch 0.8 1.8 1.7 0.7 1.0 0.6 0.9 1.0 1.0 1.1 1.0 0.8

U.S. 3.1 3.1 3.1 3.1 3.1 3.1 3.0 3.0 3.0 2.9 2.9 2.9

% Ch 0.5 0.0 0.8 (0.1) (0.3) (0.9) (1.0) (0.9) (1.0) (0.9) (0.9) (0.9)

Trade, Transportation, and Utilities

Oregon 342.3 349.8 353.3 357.9 360.0 361.1 361.7 361.9 361.6 361.4 361.6 361.8

% Ch 2.1 2.2 1.0 1.3 0.6 0.3 0.2 0.1 (0.1) (0.1) 0.1 0.1

U.S. 27.2 27.4 27.6 27.7 27.6 27.4 27.2 27.0 26.8 26.7 26.6 26.6

% Ch 1.3 0.6 0.8 0.4 (0.5) (0.8) (0.8) (0.8) (0.7) (0.4) (0.1) (0.1)

46

Mar 2018 - Employment By Industry(Oregon - Thousands, U.S. - Millions)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Retail Trade

Oregon 205.9 210.2 211.6 213.9 215.2 215.7 216.1 216.5 216.2 215.9 216.0 216.1

% Ch 1.8 2.1 0.7 1.1 0.6 0.3 0.2 0.1 (0.1) (0.1) 0.1 0.0

U.S. 15.8 15.8 15.8 15.9 15.7 15.5 15.4 15.2 15.1 15.0 15.0 15.0

% Ch 1.4 0.1 0.0 0.0 (0.7) (1.2) (1.1) (1.0) (0.9) (0.5) (0.3) 0.0

Wholesale Trade

Oregon 75.6 76.5 77.1 78.2 78.7 79.0 79.2 79.2 79.1 79.2 79.2 79.1

% Ch 2.1 1.2 0.8 1.4 0.6 0.4 0.2 0.0 (0.1) 0.1 0.0 (0.0)

U.S. 5.9 5.9 6.0 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.0 6.0

% Ch 0.2 1.0 1.5 1.1 0.1 0.1 (0.1) (0.1) (0.1) (0.2) (0.3) (0.3)

Transportation and Warehousing, and Utilities

Oregon 60.8 63.1 64.6 65.8 66.2 66.3 66.4 66.3 66.3 66.3 66.4 66.6

% Ch 3.0 3.9 2.4 1.9 0.5 0.2 0.1 (0.1) (0.1) 0.1 0.2 0.2

U.S. 5.5 5.6 5.7 5.8 5.8 5.7 5.7 5.6 5.6 5.6 5.6 5.6

% Ch 2.2 1.6 2.0 0.7 (0.4) (0.6) (0.7) (0.7) (0.7) (0.1) 0.3 (0.2)

Information

Oregon 33.5 34.2 34.6 35.1 35.4 35.5 35.6 35.7 35.7 35.8 35.9 35.9

% Ch 1.6 2.3 1.3 1.3 0.7 0.4 0.3 0.1 0.1 0.3 0.2 0.1

U.S. 2.8 2.7 2.7 2.7 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8

% Ch 0.8 (1.8) (1.4) 1.8 1.4 1.2 0.7 0.0 (0.0) (0.2) (0.6) (0.9)

Financial Activities

Oregon 96.7 98.8 100.9 102.7 103.1 103.2 103.3 103.4 103.3 103.2 103.0 102.9

% Ch 2.0 2.2 2.1 1.8 0.4 0.2 0.1 0.1 (0.0) (0.1) (0.2) (0.1)

U.S. 8.3 8.4 8.6 8.7 8.7 8.7 8.7 8.7 8.7 8.6 8.6 8.6

% Ch 2.0 1.9 1.3 1.2 0.5 0.2 (0.2) (0.2) (0.3) (0.4) (0.4) (0.5)

Professional and Business Services

Oregon 238.2 243.3 253.7 268.9 277.2 281.8 285.1 288.9 293.8 298.0 300.7 302.1

% Ch 3.9 2.1 4.3 6.0 3.1 1.7 1.2 1.3 1.7 1.4 0.9 0.5

U.S. 20.1 20.7 21.5 22.5 22.9 23.2 23.7 24.3 24.7 25.1 25.4 25.6

% Ch 2.6 2.9 3.6 4.9 1.9 1.2 2.2 2.3 1.9 1.5 1.3 0.8

Education and Health Services

Oregon 266.1 272.6 279.0 285.5 288.6 291.6 294.5 297.4 301.0 305.1 309.2 312.6

% Ch 3.2 2.4 2.4 2.3 1.1 1.0 1.0 1.0 1.2 1.4 1.3 1.1

U.S. 22.6 23.1 23.5 23.8 23.8 23.8 23.9 23.9 24.1 24.2 24.4 24.6

% Ch 2.7 2.2 1.9 1.0 (0.1) 0.1 0.3 0.3 0.4 0.6 0.7 0.9

Educational Services

Oregon 35.7 36.2 36.5 36.6 36.9 37.1 37.3 37.4 37.5 37.7 37.7 37.8

% Ch 1.2 1.3 0.8 0.5 0.7 0.6 0.5 0.2 0.3 0.4 0.1 0.2

U.S. 3.6 3.6 3.7 3.7 3.6 3.5 3.4 3.3 3.2 3.1 3.1 3.0

% Ch 2.6 2.3 1.2 (0.7) (1.8) (2.2) (2.5) (2.8) (2.9) (2.8) (2.7) (2.4)

Health Care and Social Assistance

Oregon 230.4 236.4 242.6 248.9 251.7 254.4 257.2 260.0 263.4 267.5 271.5 274.8

% Ch 3.5 2.6 2.6 2.6 1.1 1.1 1.1 1.1 1.3 1.5 1.5 1.2

U.S. 19.1 19.5 19.9 20.1 20.2 20.3 20.4 20.6 20.8 21.1 21.3 21.6

% Ch 2.7 2.2 2.0 1.3 0.3 0.6 0.8 0.9 1.0 1.1 1.2 1.4

Leisure and Hospitality

Oregon 199.8 206.3 211.9 214.7 214.5 213.3 212.3 211.5 211.7 212.2 212.7 213.7

% Ch 4.3 3.3 2.7 1.3 (0.1) (0.5) (0.5) (0.4) 0.1 0.3 0.2 0.5

U.S. 15.6 15.9 16.2 16.3 16.3 16.3 16.3 16.3 16.3 16.3 16.2 16.1

% Ch 3.0 1.9 1.6 0.6 0.0 0.2 0.1 (0.0) 0.0 (0.4) (0.6) (0.3)

Other Services

Oregon 63.8 63.4 64.2 64.7 64.8 64.9 65.3 65.4 65.8 66.3 66.8 67.2

% Ch 4.7 (0.6) 1.2 0.9 0.1 0.2 0.6 0.2 0.6 0.8 0.8 0.6

U.S. 5.7 5.8 5.8 5.8 5.7 5.7 5.6 5.5 5.5 5.4 5.4 5.4

% Ch 1.1 1.3 0.8 (0.6) (1.1) (0.8) (1.0) (1.1) (1.2) (0.9) (0.6) (0.4)

Government

Oregon 307.2 310.8 314.3 319.0 324.0 326.1 329.4 332.3 335.2 338.5 342.1 346.2

% Ch 2.0 1.2 1.1 1.5 1.6 0.6 1.0 0.9 0.9 1.0 1.1 1.2

U.S. 22.2 22.3 22.5 22.6 22.9 23.0 23.2 23.4 23.5 23.7 23.9 24.0

% Ch 0.9 0.5 0.6 0.8 1.4 0.2 0.8 0.8 0.8 0.7 0.7 0.7

Federal Government

Oregon 28.3 28.2 28.1 28.1 29.6 28.4 28.4 28.4 28.4 28.4 28.4 28.4

% Ch 1.9 (0.3) (0.4) 0.2 5.1 (4.1) 0.1 0.1 (0.0) 0.1 (0.0) 0.1

U.S. 2.8 2.8 2.8 2.8 2.9 2.8 2.8 2.8 2.8 2.8 2.8 2.8

% Ch 1.5 0.5 (0.0) 0.0 4.4 (4.3) 0.0 0.0 0.0 0.0 0.0 0.0

State Government, Oregon

State Total 55.9 56.7 57.6 58.4 58.9 59.4 60.1 60.7 61.2 61.9 62.7 63.6

% Ch (3.6) 1.3 1.6 1.5 0.7 0.9 1.2 1.0 0.9 1.0 1.3 1.5

State Education 0.8 0.8 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.0

% Ch (77.0) (1.2) 14.7 2.6 1.7 1.6 1.6 1.6 1.6 1.6 1.6 1.6

Local Government, Oregon

Local Total 223.0 226.0 228.6 232.5 235.6 238.3 241.0 243.2 245.6 248.3 251.0 254.2

% Ch 3.5 1.3 1.2 1.7 1.3 1.2 1.1 0.9 1.0 1.1 1.1 1.2

Local Education 131.6 132.9 132.8 133.8 134.7 135.6 136.4 137.1 137.6 138.1 138.9 139.6

% Ch 4.5 1.0 (0.1) 0.8 0.7 0.7 0.6 0.5 0.4 0.3 0.5 0.6

47

TABLE A.4

Mar 2018 - Other Economic Indicators

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

GDP (Bil of 2009 $),

Chain Weight (in billions of $) 16,716.2 17,091.6 17,546.7 17,995.1 18,363.4 18,698.3 19,066.3 19,435.8 19,806.1 20,169.7 20,534.2 20,902.9

% Ch 1.5 2.2 2.7 2.6 2.0 1.8 2.0 1.9 1.9 1.8 1.8 1.8

Price and Wage Indicators

GDP Implicit Price Deflator,

Chain Weight U.S., 2009=100 111.4 113.4 115.7 118.3 121.1 123.9 126.6 129.5 132.4 135.3 138.3 141.3

% Ch 1.3 1.8 2.0 2.3 2.4 2.3 2.2 2.2 2.2 2.2 2.2 2.2

Personal Consumption Deflator,

Chain Weight U.S., 2009=100 110.8 112.6 114.2 116.2 118.7 121.2 123.7 126.4 129.1 131.8 134.6 137.4

% Ch 1.2 1.7 1.4 1.7 2.2 2.1 2.1 2.1 2.1 2.1 2.1 2.1

CPI, Urban Consumers,

1982-84=100

West Region, Urban Size A 254.3 262.0 267.6 273.5 281.9 289.8 297.3 305.2 313.5 321.9 330.6 339.5

% Ch 2.2 3.0 2.1 2.2 3.1 2.8 2.6 2.6 2.7 2.7 2.7 2.7

U.S. 240.0 245.1 249.2 254.1 261.3 268.1 274.5 281.2 288.1 295.3 302.6 310.2

% Ch 1.3 2.1 1.7 1.9 2.8 2.6 2.4 2.4 2.5 2.5 2.5 2.5

Oregon Average Wage

Rate (Thous $) 51.9 53.0 55.2 57.4 59.7 62.1 64.7 67.3 70.1 73.1 76.2 79.5

% Ch 2.3 2.1 4.2 4.1 4.0 4.0 4.0 4.1 4.3 4.2 4.3 4.3

U.S. Average Wage

Wage Rate (Thous $) 56.0 56.9 58.5 60.8 63.3 65.9 68.5 71.3 74.3 77.4 80.7 84.1

% Ch 1.1 1.6 2.8 3.9 4.1 4.1 3.9 4.0 4.2 4.2 4.2 4.3

Housing Indicators

FHFA Oregon Housing Price Index

1991 Q1=100 368.1 399.6 428.3 451.6 471.2 489.3 508.3 530.2 552.3 574.3 597.5 621.2

% Ch 11.4 8.5 7.2 5.4 4.3 3.8 3.9 4.3 4.2 4.0 4.0 4.0

FHFA National Housing Price Index

1991 Q1=100 232.8 247.9 260.7 269.2 278.2 287.5 296.3 306.5 317.7 329.3 341.5 354.4

% Ch 6.1 6.5 5.2 3.3 3.3 3.4 3.1 3.4 3.6 3.7 3.7 3.8

Housing Starts

Oregon (Thous) 19.1 19.0 20.5 22.1 23.7 24.6 24.8 24.7 24.3 24.0 24.1 24.4

% Ch 19.8 (0.3) 8.1 7.7 7.2 3.7 1.1 (0.4) (1.9) (1.2) 0.6 1.0

U.S. (Millions) 1.2 1.2 1.3 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.5 1.5

% Ch 6.3 2.9 6.4 8.7 3.4 1.6 1.6 0.3 0.6 (0.5) (0.5) (0.6)

Other Indicators

Unemployment Rate (%)

Oregon 4.9 4.0 4.4 4.5 4.7 4.8 4.9 5.0 5.1 5.1 5.1 5.1

Point Change (0.7) (0.9) 0.4 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0

U.S. 4.9 4.4 3.9 3.7 3.8 4.1 4.3 4.4 4.5 4.6 4.7 4.7

Point Change (0.4) (0.5) (0.5) (0.2) 0.1 0.3 0.2 0.1 0.1 0.1 0.1 0.1

Industrial Production Index

U.S, 2002 = 100 103.1 105.0 108.5 111.8 114.2 116.3 118.7 121.1 123.4 125.6 127.8 130.0

% Ch (1.2) 1.9 3.3 3.0 2.2 1.8 2.1 2.1 1.9 1.8 1.8 1.7

Prime Rate (Percent) 3.5 4.1 4.9 5.6 6.1 6.5 6.5 6.4 6.1 6.0 5.9 5.7

% Ch 7.7 16.7 19.5 14.2 10.0 5.7 0.0 (2.1) (3.9) (1.8) (2.3) (1.9)

Population (Millions)

Oregon 4.09 4.15 4.21 4.27 4.33 4.38 4.44 4.49 4.54 4.59 4.64 4.68

% Ch 1.5 1.6 1.5 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1.0 1.0

U.S. 323.7 325.9 328.5 331.1 333.8 336.4 339.0 341.5 344.1 346.6 349.1 351.5

% Ch 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7

Timber Harvest (Mil Bd Ft)

Oregon 3,888.3 3,978.2 4,028.1 4,077.1 4,121.7 4,170.0 4,227.4 4,174.1 4,170.1 4,217.3 4,211.2 4,207.9

% Ch 2.6 2.3 1.3 1.2 1.1 1.2 1.4 (1.3) (0.1) 1.1 (0.1) (0.1)

48

APPENDIX B: REVENUE FORECAST DETAIL

Table B.1 General Fund Revenue Statement – 2017-19 ……………………………….………………..……..…… 49

Table B.2 General Fund Revenue Forecast by Fiscal Year .…..……………….………..……………….……….… 50

Table B.3 Summary of 2017 Legislative Session Adjustments ……………………………………………………. 51

Table B.4 Oregon Personal Income Tax Revenue Forecast …………………………..….……………….……….. 52

Table B.5 Oregon Corporate Income Tax Revenue Forecast ……………………….….…………………………. 54

Table B.6 Cigarette and Tobacco Tax Distribution ……………………………………….……………………..……… 56

Table B.7 Liquor Apportionment and Revenue Distribution to Local Governments ……………...…… 57

Table B.8 Track Record for the May 2017 Forecast ………………………………………………………………..….. 58

Table B.9 Summary of Lottery Resources …………….………………………………………………………………....... 59

Table B.10 Budgetary Reserve Summary ……………..……………………………………………………………………… 60

Table B.11 Recreational Marijuana Resources and Distributions ………………………………………………… 61

49

Table B.1 General Fund Revenue Statement

Table B.1

General Fund Revenue Statement -- 2017-19

Total Total

2017-18 2018-19 2017-19 2017-18 2018-19 2017-19

Taxes

Personal Income Taxes (Before Kicker) 17,147,386,000 8,181,878,000 8,936,654,000 17,118,532,000 8,495,564,000 8,679,195,000 17,174,759,000 56,227,000 27,373,000

Transfer to Counties (Gain Share) (32,956,000) (16,449,000) (16,472,000) (32,921,000) (16,449,000) (16,472,000) (32,921,000) 0 35,000

Corporate Income Taxes (Before Kicker) 1,076,977,000 541,112,000 536,846,000 1,077,958,000 557,488,000 420,686,000 978,174,000 (99,784,000) (98,803,000)

Transfer to Rainy Day Fund (Minimum Tax) (42,504,000) (20,421,000) (20,588,000) (41,009,000) (16,183,000) (17,856,000) (34,039,000) 6,970,000 8,465,000

Insurance Taxes 129,852,000 57,241,000 67,255,000 124,496,000 58,719,000 67,933,000 126,652,000 2,156,000 (3,200,000)

Estate Taxes 290,015,000 146,216,000 150,799,000 297,015,000 150,716,000 152,299,000 303,015,000 6,000,000 13,000,000

Cigarette Taxes 67,837,000 34,861,000 33,616,000 68,477,000 34,861,000 33,616,000 68,477,000 0 640,000

Other Tobacco Products Taxes 66,329,000 32,988,000 33,419,000 66,407,000 32,990,000 33,419,000 66,409,000 2,000 80,000

Other Taxes 1,676,000 843,000 833,000 1,676,000 843,000 833,000 1,676,000 0 0

Fines and Fees

State Court Fees 114,733,000 57,459,000 58,063,000 115,522,000 57,459,000 58,063,000 115,522,000 0 789,000

Secretary of State Fees 64,707,000 32,140,000 32,567,000 64,707,000 32,140,000 32,567,000 64,707,000 0 0

Criminal Fines & Assessments 66,796,000 33,664,000 33,664,000 67,328,000 33,483,000 33,483,000 66,966,000 (362,000) 170,000

Securities Fees 23,008,000 11,763,000 12,013,000 23,776,000 11,687,000 11,923,000 23,610,000 (166,000) 602,000

Central Service Charges 10,876,000 5,438,000 5,438,000 10,876,000 5,438,000 5,438,000 10,876,000 0 0

Liquor Apportionment 326,090,000 159,784,000 166,306,000 326,090,000 155,717,000 166,229,000 321,946,000 (4,144,000) (4,144,000)

Interest Earnings 35,279,000 17,563,000 20,016,000 37,579,000 17,563,000 20,016,000 37,579,000 0 2,300,000

Miscellaneous Revenues 19,027,000 9,425,000 9,602,000 19,027,000 9,425,000 9,602,000 19,027,000 0 0

One-time Transfers 111,340,000 3,040,000 108,300,000 111,340,000 3,040,000 108,300,000 111,340,000 0 0

Gross General Fund Revenues 19,551,928,000 9,325,415,000 10,205,391,000 19,530,806,000 9,657,133,000 9,833,602,000 19,490,735,000 (40,071,000) (61,193,000)

Total Personal and Corporate Transfers (75,460,000) (36,870,000) (37,060,000) (73,930,000) (32,632,000) (34,328,000) (66,960,000) 6,970,000 8,500,000

Net General Fund Revenues 19,476,468,000 9,288,545,000 10,168,331,000 19,456,876,000 9,624,501,000 9,799,274,000 19,423,775,000 (33,101,000) (52,693,000)

Plus Beginning Balance 780,836,010 875,660,843 977,872,335 102,211,492 197,036,325

Less Anticipated Administrative Actions* (21,472,000) (21,472,000) (21,472,000) 0 0

Less Legislatively Adopted Actions** (180,120,396) (180,120,396) (179,424,101) 696,295 696,295

Available Resources 20,055,711,615 20,130,944,448 20,200,751,234 69,806,787 145,039,620

Appropriations 19,856,146,680 19,855,894,308 19,855,894,308 0 (252,372)

Projected Expenditures 19,856,146,680 19,855,894,308 19,855,894,308 0 (252,372)

Estimated Ending Balance 196,911,615 275,050,140 344,856,926 69,806,787 147,945,312

Estimate at

COS 2017

Forecasts Dated: 12/1/2017 Forecasts Dated: 3/1/2018 Difference

03/1/2018 Less

12/1/2017

03/1/2018 Less

COS

50

Table B.2 General Fund Revenue Forecast by Fiscal Year

Fiscal Years

2015-16

Fiscal Year

2016-17

Fiscal Year

2017-18

Fiscal Year

2018-19

Fiscal Year

2019-20

Fiscal Year

2020-21

Fiscal Year

2021-22

Fiscal Year

2022-23

Fiscal Year

2023-24

Fiscal Year

2024-25

Fiscal Year

2025-26

Fiscal Year

2026-27

Fiscal Year

Taxes

Personal Income 7,598.6 8,457.3 8,495.6 8,679.2 9,327.6 9,836.6 10,331.8 10,757.7 11,289.2 11,843.8 12,537.7 12,981.3

Offsets and Transfers (16.4) (16.4) (16.4) (16.5) (16.5) (16.5) (16.5) (16.6) (16.6) (16.6) (16.7) (16.7)

Corporate Excise & Income 603.1 607.7 557.5 420.7 563.4 601.1 648.3 688.2 702.2 708.2 730.0 732.0

Offsets and Transfers 0.0 0.0 (16.2) (17.9) (20.3) (21.4) (22.2) (22.5) (25.6) (23.7) (26.5) (26.9)

Insurance 64.9 74.3 58.7 67.9 69.7 71.0 72.4 74.1 75.6 77.2 78.8 80.4

Estate 126.0 196.9 150.7 152.3 155.3 159.7 164.7 169.1 173.6 178.6 183.7 189.1

Cigarette 36.2 34.3 34.9 33.6 33.2 32.5 31.9 31.4 30.8 30.3 29.8 29.3

Other Tobacco Products 31.0 31.4 33.0 33.4 34.0 34.6 35.2 35.9 36.7 37.4 38.1 38.7

Other Taxes 0.9 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

Other Revenues

Licenses and Fees 126.8 119.4 134.8 136.0 137.9 139.3 139.5 140.9 141.8 142.8 143.6 144.6

Charges for Services 5.2 5.1 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4

Liquor Apportionment 127.1 134.8 155.7 166.2 173.7 181.5 189.7 198.2 207.2 216.5 226.2 236.4

Interest Earnings 7.4 17.5 17.6 20.0 26.4 33.7 35.5 38.5 40.5 42.5 44.8 47.0

Others 4.4 144.9 12.5 117.9 9.8 10.0 10.2 10.4 10.6 10.8 10.6 10.8

Gross General Fund 8,731.6 9,824.3 9,657.1 9,833.6 10,537.2 11,106.3 11,665.4 12,150.7 12,714.4 13,294.3 14,029.6 14,495.9

Net General Fund 8,715.1 9,807.9 9,624.5 9,799.3 10,500.5 11,068.4 11,626.6 12,111.7 12,672.2 13,254.0 13,986.4 14,452.3

Biennial Totals

2015-17

BienniumPercent Change

2017-19

BienniumPercent Change

2019-21

BienniumPercent Change

2021-23

BienniumPercent Change

2023-25

BienniumPercent Change

2025-27

Biennium

Percent

Change

Taxes

Personal Income 16,055.8 15.0% 17,174.8 7.0% 19,164.3 11.6% 21,089.6 10.0% 23,133.0 9.7% 25,519.0 10.3%

Corporate Excise & Income 1,210.7 8.4% 978.2 -19.2% 1,164.5 19.0% 1,336.5 14.8% 1,410.4 5.5% 1,462.1 3.7%

Insurance 139.2 15.0% 126.7 -9.0% 140.8 11.1% 146.5 4.1% 152.9 4.4% 159.3 4.2%

Estate Taxes 322.8 64.3% 303.0 -6.1% 315.0 3.9% 333.7 6.0% 352.1 5.5% 372.8 5.9%

Cigarette 70.5 -3.8% 68.5 -2.8% 65.6 -4.2% 63.3 -3.5% 61.1 -3.5% 59.1 -3.3%

Other Tobacco Products 62.4 3.8% 66.4 6.5% 68.5 3.2% 71.0 3.7% 74.1 4.3% 76.7 3.6%

Other Taxes 1.8 -10.8% 1.7 -7.0% 1.6 -2.4% 1.6 -0.6% 1.6 0.0% 1.6 0.0%

Other Revenues

Licenses and Fees 246.2 -4.0% 270.8 10.0% 277.2 2.4% 280.5 1.2% 284.6 1.5% 288.2 1.3%

Charges for Services 10.3 17.8% 10.9 5.8% 10.9 0.0% 10.9 0.0% 10.9 0.0% 10.9 0.0%

Liquor Apportionment 261.9 6.2% 321.9 22.9% 355.2 10.3% 387.9 9.2% 423.6 9.2% 462.6 9.2%

Interest Earnings 24.9 176.1% 37.6 51.1% 60.1 60.0% 74.0 23.1% 83.0 12.2% 91.8 10.5%

Others 149.4 164.6% 130.4 -12.7% 19.8 -84.8% 20.6 4.0% 21.4 3.9% 21.4 0.0%

Gross General Fund 18,555.9 15.2% 19,490.7 5.0% 21,643.5 11.0% 23,816.1 10.0% 26,008.7 9.2% 28,525.4 9.7%

Net General Fund 18,523.0 15.5% 19,423.8 4.9% 21,568.8 11.0% 23,738.3 10.1% 25,926.2 9.2% 28,438.7 9.7%

General Fund Revenue Forecast($Millions)

March 2018

51

Table B.3 Summary of 2017 Legislative Session Adjustments

17-19 19-21 21-23

Revenue Impact Statement

Personal Income Tax Impacts (millions)

Film/Video Rebate - HB 2244 -$4.6 -$9.7 -$10.5 HB 2244

Employee Training – HB 3206 $0.0 -$0.1 -$0.1 HB 3206

Withholding from Lottery Prizes

DOR Data Match – SB 254 $1.7 $7.0 $8.6 SB 254

Prize Threshold Change – SB 251 $2.4 $3.3 $3.3 SB 251

Tax Credits - HB 2066 HB 2066

Rural Medical Providers $1.0 -$1.4 -$3.9

Personal Income Tax Total $0.5 -$0.9 -$2.6

Corporate Income Tax Impacts (millions)

Market Based Apportionment - SB 28 $5.5 $11.1 $11.7 SB 28

Tax Credits - HB 2066 HB 2066

Affordable Lender’s Credit $0.0 -$1.1 -$6.8

C-Corp Min Tax Credits $0.0 $0.0 $1.7

Corporate Income Tax Total $5.5 $10.0 $6.6

Other Tax/Revenue Impacts (millions)

Program Change Bill - HB 3470 $111.3 $0.0 $0.0 HB 3470

OLCC Revenues - HB 5019 $9.2 $9.5 $9.7 HB 5019

Provider Tax - HB 2391 -$2.0 -$6.0 $0.0 HB 2391

Tobacco Under 21 - SB 754 -$0.4 -$1.0 -$1.5 SB 754

Photo Radar - HB 2409 $8.3 $10.4 $12.2 HB 2409

Other Tax Total $126.4 $12.9 $20.4

52

Table B.4 Oregon Personal Income Tax Revenue Forecast

TABLE B.4

2009:3 2009:4 2010:1 2010:2 FY 2010 2010:3 2010:4 2011:1 2011:2 FY 2011

WITHHOLDING 1,092,795 1,151,673 1,157,857 1,116,552 4,518,878 1,146,189 1,196,214 1,262,781 1,218,439 4,823,622

%CHYA -6.0% -2.6% 2.6% 2.5% -1.0% 4.9% 3.9% 9.1% 9.1% 6.7%

EST. PAYMENTS 176,110 161,759 186,894 265,703 790,467 179,692 148,589 207,036 284,662 819,978

%CHYA -33.4% -7.5% -14.0% 1.0% -14.1% 2.0% -8.1% 10.8% 7.1% 3.7%

FINAL PAYMENTS 63,363 77,013 105,745 515,262 761,383 62,259 81,728 114,877 607,592 866,456

%CHYA -9.9% -22.5% 1.6% -2.8% -5.3% -1.7% 6.1% 8.6% 17.9% 13.8%

REFUNDS 96,477 188,704 459,550 380,459 1,125,190 92,291 151,515 432,478 340,652 1,016,937

%CHYA 4.8% 4.6% 2.6% -5.9% 0.1% -4.3% -19.7% -5.9% -10.5% -9.6%

OTHER (138,521) - - 136,193 (2,328) (136,193) - - 165,933 29,740

TOTAL 1,097,271 1,201,740 990,947 1,653,251 4,943,210 1,159,655 1,275,015 1,152,216 1,935,973 5,522,860

%CHYA -10.2% -5.9% -1.2% 2.3% -3.4% 5.7% 6.1% 16.3% 17.1% 11.7%

2011:3 2011:4 2012:1 2012:2 FY 2012 2012:3 2012:4 2013:1 2013:2 FY 2013

WITHHOLDING 1,235,508 1,287,030 1,348,171 1,269,562 5,140,271 1,262,589 1,364,547 1,354,116 1,321,413 5,302,666

%CHYA 7.8% 7.6% 6.8% 4.2% 6.6% 2.2% 6.0% 0.4% 4.1% 3.2%

EST. PAYMENTS 194,674 185,239 199,238 299,646 878,797 205,533 159,104 278,341 321,896 964,874

%CHYA 8.3% 24.7% -3.8% 5.3% 7.2% 5.6% -14.1% 39.7% 7.4% 9.8%

FINAL PAYMENTS 85,889 87,233 117,628 627,762 918,512 72,224 91,338 123,456 785,542 1,072,560

%CHYA 38.0% 6.7% 2.4% 3.3% 6.0% -15.9% 4.7% 5.0% 25.1% 16.8%

REFUNDS 64,687 156,272 530,800 360,618 1,112,377 52,211 109,503 536,506 383,176 1,081,397

%CHYA -29.9% 3.1% 22.7% 5.9% 9.4% -19.3% -29.9% 1.1% 6.3% -2.8%

OTHER (165,933) - - 193,614 27,681 (193,614) - - 201,367 7,753

TOTAL 1,285,451 1,403,230 1,134,237 2,029,966 5,852,884 1,294,521 1,505,486 1,219,407 2,247,042 6,266,457

%CHYA 10.8% 10.1% -1.6% 4.9% 6.0% 0.7% 7.3% 7.5% 10.7% 7.1%

2013:3 2013:4 2014:1 2014:2 FY 2014 2014:3 2014:4 2015:1 2015:2 FY 2015

WITHHOLDING 1,333,946 1,435,630 1,442,755 1,420,313 5,632,644 1,455,822 1,523,453 1,576,188 1,505,337 6,060,801

%CHYA 5.7% 5.2% 6.5% 7.5% 6.2% 9.1% 6.1% 9.2% 6.0% 7.6%

EST. PAYMENTS 221,695 214,342 247,826 357,218 1,041,080 264,823 236,303 305,582 408,957 1,215,665

%CHYA 7.9% 34.7% -11.0% 11.0% 7.9% 19.5% 10.2% 23.3% 14.5% 16.8%

FINAL PAYMENTS 83,096 112,495 139,923 730,795 1,066,309 92,647 144,239 156,188 847,330 1,240,403

%CHYA 15.1% 23.2% 13.3% -7.0% -0.6% 11.5% 28.2% 11.6% 15.9% 16.3%

REFUNDS 67,098 197,448 472,018 354,437 1,091,001 100,729 173,522 520,272 375,119 1,169,642

%CHYA 28.5% 80.3% -12.0% -7.5% 0.9% 50.1% -12.1% 10.2% 5.8% 7.2%

OTHER (201,367) - - 180,356 (21,011) (180,356) - - 163,398 (16,959)

TOTAL 1,370,272 1,565,018 1,358,485 2,334,246 6,628,021 1,532,207 1,730,473 1,517,685 2,549,903 7,330,268

%CHYA 5.9% 4.0% 11.4% 3.9% 5.8% 11.8% 10.6% 11.7% 9.2% 10.6%

2015:3 2015:4 2016:1 2016:2 FY 2016 2016:3 2016:4 2017:1 2017:2 FY 2017

WITHHOLDING 1,551,517 1,644,209 1,711,568 1,634,728 6,542,022 1,675,744 1,705,280 1,835,155 1,769,354 6,985,533

%CHYA 6.6% 7.9% 8.6% 8.6% 7.9% 8.0% 3.7% 7.2% 8.2% 6.8%

EST. PAYMENTS 309,470 141,009 327,008 423,839 1,201,325 300,866 319,225 382,445 450,241 1,452,777

%CHYA 16.9% -40.3% 7.0% 5.7% -0.5% -2.8% 126.4% 17.0% 6.2% 20.9%

FINAL PAYMENTS1

99,618 321,345 141,818 813,132 1,375,913 103,631 144,248 175,235 919,186 1,342,301

%CHYA 7.5% 122.8% -9.2% -4.9% 10.2% 4.0% -55.1% 23.6% 13.0% -2.4%

REFUNDS 85,113 203,981 577,546 562,601 1,429,241 138,825 254,851 574,417 454,899 1,422,992

%CHYA -15.5% 17.6% 11.0% 50.0% 22.2% 63.1% 24.9% -0.5% -19.1% -0.4%

OTHER (163,398) - - 236,108 72,710 (236,108) - - 192,251 (43,856)

TOTAL 1,712,094 1,902,583 1,602,848 2,545,205 7,762,729 1,705,308 1,913,902 1,818,419 2,876,134 8,313,763

%CHYA 11.7% 9.9% 5.6% -0.2% 5.9% -0.4% 0.6% 13.4% 13.0% 7.1%

March 2018

OREGON PERSONAL INCOME TAX REVENUE FORECAST - QUARTERLY COLLECTIONS

Thousands of Dollars - Not Seasonally Adjusted

Note: "Other" includes kicker and federal pension refunds, as well as July withholding accrued to June.

Tax law impacts are reflected in the collections numbers to produce more meaningful projections.

53

TABLE B.4

2017:3 2017:4 2018:1 2018:2 FY 2018 2018:3 2018:4 2019:1 2019:2 FY 2019

WITHHOLDING 1,748,844 1,836,249 1,971,220 1,855,485 7,411,799 1,830,343 1,880,519 2,027,111 1,918,857 7,656,830

%CHYA 4.4% 7.7% 7.4% 4.9% 6.1% 4.7% 2.4% 2.8% 3.4% 3.3%

EST. PAYMENTS 321,032 451,037 439,236 384,784 1,596,089 269,199 382,230 349,924 390,755 1,392,108

%CHYA 6.7% 41.3% 14.8% -14.5% 9.9% -16.1% -15.3% -20.3% 1.6% -12.8%

FINAL PAYMENTS1

92,364 169,785 202,135 805,167 1,269,451 92,463 126,652 157,196 914,552 1,290,863

%CHYA -10.9% 17.7% 15.4% -12.4% -5.4% 0.1% -25.4% -22.2% 13.6% 1.7%

REFUNDS 133,143 266,467 659,855 774,873 1,834,338 141,472 287,433 708,834 538,755 1,676,495

%CHYA -4.1% 4.6% 14.9% 70.3% 28.9% 6.3% 7.9% 7.4% -30.5% -8.6%

OTHER (192,251) - - 244,815 52,563 (244,815) - - 260,702 15,888

TOTAL 1,836,845 2,190,604 1,952,736 2,515,379 8,495,564 1,805,718 2,101,968 1,825,397 2,946,112 8,679,195

%CHYA 7.7% 14.5% 7.4% -12.5% 2.2% -1.7% -4.0% -6.5% 17.1% 2.2%

2019:3 2019:4 2020:1 2020:2 FY 2020 2020:3 2020:4 2021:1 2021:2 FY 2021

WITHHOLDING 1,917,890 2,022,493 2,135,592 2,023,360 8,099,334 2,015,880 2,125,791 2,236,894 2,118,116 8,496,680

%CHYA 4.8% 7.5% 5.4% 5.4% 5.8% 5.1% 5.1% 4.7% 4.7% 4.9%

EST. PAYMENTS 289,998 406,227 373,490 421,860 1,491,574 302,088 423,210 389,188 440,838 1,555,324

%CHYA 7.7% 6.3% 6.7% 8.0% 7.1% 4.2% 4.2% 4.2% 4.5% 4.3%

FINAL PAYMENTS1

98,141 138,353 163,366 1,060,689 1,460,548 100,631 139,996 164,584 1,088,137 1,493,348

%CHYA 6.1% 9.2% 3.9% 16.0% 13.1% 2.5% 1.2% 0.7% 2.6% 2.2%

REFUNDS 109,663 244,819 739,758 567,490 1,661,730 115,606 259,487 768,715 589,259 1,733,067

%CHYA -22.5% -14.8% 4.4% 5.3% -0.9% 5.4% 6.0% 3.9% 3.8% 4.3%

OTHER (260,702) - - 198,621 (62,082) (198,621) - - 222,953 24,333

TOTAL 1,935,663 2,322,254 1,932,689 3,137,039 9,327,645 2,104,373 2,429,510 2,021,951 3,280,785 9,836,618

%CHYA 7.2% 10.5% 5.9% 6.5% 7.5% 8.7% 4.6% 4.6% 4.6% 5.5%

2021:3 2021:4 2022:1 2022:2 FY 2022 2022:3 2022:4 2023:1 2023:2 FY 2023

WITHHOLDING 2,110,204 2,225,283 2,340,404 2,215,950 8,891,841 2,207,623 2,328,018 2,451,373 2,321,477 9,308,492

%CHYA 4.7% 4.7% 4.6% 4.6% 4.7% 4.6% 4.6% 4.7% 4.8% 4.7%

EST. PAYMENTS 312,627 439,230 403,524 455,597 1,610,979 325,295 457,027 420,214 478,887 1,681,422

%CHYA 3.5% 3.8% 3.7% 3.3% 3.6% 4.1% 4.1% 4.1% 5.1% 4.4%

FINAL PAYMENTS1

105,774 146,580 176,572 1,084,037 1,512,963 106,647 149,298 176,654 1,104,384 1,536,983

%CHYA 5.1% 4.7% 7.3% -0.4% 1.3% 0.8% 1.9% 0.0% 1.9% 1.6%

REFUNDS 120,252 269,471 766,738 580,671 1,737,133 124,600 279,303 803,495 609,087 1,816,484

%CHYA 4.0% 3.8% -0.3% -1.5% 0.2% 3.6% 3.6% 4.8% 4.9% 4.6%

OTHER (222,953) - - 276,116 53,162 (276,116) - - 323,442 47,326

TOTAL 2,185,400 2,541,621 2,153,762 3,451,029 10,331,812 2,238,849 2,655,041 2,244,747 3,619,103 10,757,740

%CHYA 3.9% 4.6% 6.5% 5.2% 5.0% 2.4% 4.5% 4.2% 4.9% 4.1%

2023:3 2023:4 2024:1 2024:2 FY 2024 2024:3 2024:4 2025:1 2025:2 FY 2025

WITHHOLDING 2,310,780 2,436,792 2,575,143 2,440,133 9,762,847 2,425,501 2,557,739 2,704,092 2,562,490 10,249,822

%CHYA 4.7% 4.7% 5.0% 5.1% 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%

EST. PAYMENTS 341,633 479,981 441,440 504,654 1,767,708 359,518 505,109 464,477 530,038 1,859,141

%CHYA 5.0% 5.0% 5.1% 5.4% 5.1% 5.2% 5.2% 5.2% 5.0% 5.2%

FINAL PAYMENTS1

112,841 156,286 188,549 1,164,672 1,622,348 113,775 159,728 193,757 1,223,546 1,690,806

%CHYA 5.8% 4.7% 6.7% 5.5% 5.6% 0.8% 2.2% 2.8% 5.1% 4.2%

REFUNDS 130,455 292,504 822,570 623,182 1,868,711 133,788 299,500 860,633 652,873 1,946,794

%CHYA 4.7% 4.7% 2.4% 2.3% 2.9% 2.6% 2.4% 4.6% 4.8% 4.2%

OTHER (323,442) - - 328,423 4,981 (328,423) - - 319,283 (9,140)

TOTAL 2,311,357 2,780,555 2,382,562 3,814,700 11,289,173 2,436,582 2,923,076 2,501,692 3,982,485 11,843,835

%CHYA 3.2% 4.7% 6.1% 5.4% 4.9% 5.4% 5.1% 5.0% 4.4% 4.9%

2025:3 2025:4 2026:1 2026:2 FY 2026 2026:3 2026:4 2027:1 2027:2 FY 2027

WITHHOLDING 2,550,556 2,689,609 2,841,805 2,692,726 10,774,695 2,683,143 2,829,430 2,988,591 2,831,666 11,332,829

%CHYA 5.2% 5.2% 5.1% 5.1% 5.1% 5.2% 5.2% 5.2% 5.2% 5.2%

EST. PAYMENTS 378,110 531,231 488,334 555,123 1,952,798 396,441 556,985 511,981 581,637 2,047,044

%CHYA 5.2% 5.2% 5.1% 4.7% 5.0% 4.8% 4.8% 4.8% 4.8% 4.8%

FINAL PAYMENTS1

119,461 167,858 203,092 1,282,731 1,773,142 125,237 176,092 212,710 1,335,744 1,849,783

%CHYA 5.0% 5.1% 4.8% 4.8% 4.9% 4.8% 4.9% 4.7% 4.1% 4.3%

REFUNDS 139,516 312,652 934,347 716,463 2,102,978 146,077 327,551 985,663 755,907 2,215,198

%CHYA 4.3% 4.4% 8.6% 9.7% 8.0% 4.7% 4.8% 5.5% 5.5% 5.3%

OTHER (319,283) - - 263,165 140,037 (263,165) - - 296,708 (33,193)

TOTAL 2,589,327 3,076,045 2,598,884 4,077,282 12,537,694 2,795,579 3,234,957 2,727,619 4,289,847 12,981,265

%CHYA 6.3% 5.2% 3.9% 2.4% 5.9% 8.0% 5.2% 5.0% 5.2% 3.5%

Note: "Other" includes July withholding accrued to June. Tax law impacts are reflected in the collections numbers to produce more meaningful projections.

March 2018

OREGON PERSONAL INCOME TAX REVENUE FORECAST - QUARTERLY COLLECTIONS

Thousands of Dollars - Not Seasonally Adjusted

54

Table B.5 Oregon Corporate Income Tax Revenue Forecast

TABLE B.5

FY FY

2009:3 2009:4 2010:1 2010:2 2010 2010:3 2010:4 2011:1 2011:2 2011

ADVANCE PAYMENTS 79,579 163,877 66,451 147,313 457,220 115,286 175,561 76,405 165,354 532,606

%CHYA -20.9% 12.8% 4.2% 51.3% 12.3% 44.9% 7.1% 15.0% 12.2% 16.5%

FINAL PAYMENTS 20,404 24,009 38,412 45,714 128,539 21,781 21,206 35,770 40,805 119,562

%CHYA -13.2% -10.2% 72.1% 109.5% 36.2% 6.8% -11.7% -6.9% -10.7% -7.0%

REFUNDS 29,072 137,244 40,080 25,774 232,170 23,130 89,877 39,065 31,489 183,562

%CHYA 3.3% 9.9% -40.6% -30.7% -9.9% -20.4% -34.5% -2.5% 22.2% -20.9%

TOTAL 70,910 50,642 64,784 167,254 353,589 113,936 106,890 73,111 174,670 468,606

%CHYA -26.1% 7.3% 247.5% 104.0% 45.1% 60.7% 111.1% 12.9% 4.4% 32.5%

FY FY

2011:3 2011:4 2012:1 2012:2 2012 2012:3 2012:4 2013:1 2013:2 2013

ADVANCE PAYMENTS 120,766 154,290 86,873 156,652 518,581 130,348 110,207 80,942 282,526 604,023

%CHYA 4.8% -12.1% 13.7% -5.3% -2.6% 7.9% -28.6% -6.8% 80.4% 16.5%

FINAL PAYMENTS 19,117 26,841 32,512 33,322 111,792 16,387 21,377 36,660 34,009 108,433

%CHYA -12.2% 26.6% -9.1% -18.3% -6.5% -14.3% -20.4% 12.8% 2.1% -3.0%

REFUNDS 34,927 91,252 55,051 18,153 199,384 33,212 17,832 25,595 182,929 259,568

%CHYA 51.0% 1.5% 40.9% -42.4% 8.6% -4.9% -80.5% -53.5% 907.7% 30.2%

TOTAL 104,955 89,878 64,335 171,820 430,989 113,524 113,751 92,007 133,606 452,888

%CHYA -7.9% -15.9% -12.0% -1.6% -8.0% 8.2% 26.6% 43.0% -22.2% 5.1%

FY FY

2013:3 2013:4 2014:1 2014:2 2014 2014:3 2014:4 2015:1 2015:2 2015

ADVANCE PAYMENTS 123,591 187,195 150,401 183,348 644,535 193,248 206,088 106,689 183,611 689,637

%CHYA -5.2% 69.9% 85.8% -35.1% 6.7% 56.4% 10.1% -29.1% 0.1% 7.0%

FINAL PAYMENTS 27,794 18,162 32,218 52,283 130,456 28,815 73,552 57,268 71,415 231,051

%CHYA 69.6% -15.0% -12.1% 53.7% 20.3% 3.7% 305.0% 77.8% 36.6% 77.1%

REFUNDS 20,123 118,303 109,296 32,511 280,232 49,952 155,439 58,361 35,167 298,918

%CHYA -39.4% 563.4% 327.0% -82.2% 8.0% 148.2% 31.4% -46.6% 8.2% 6.7%

TOTAL 131,262 87,054 73,323 203,120 494,759 172,111 124,202 105,597 219,860 621,770

%CHYA 15.6% -23.5% -20.3% 52.0% 9.2% 31.1% 42.7% 44.0% 8.2% 25.7%

FY FY

2015:3 2015:4 2016:1 2016:2 2016 2016:3 2016:4 2017:1 2017:2 2017

ADVANCE PAYMENTS 173,329 220,326 118,673 202,813 715,141 136,698 215,677 102,663 195,412 650,449

%CHYA -10.3% 6.9% 11.2% 10.5% 3.7% -21.1% -2.1% -13.5% -3.6% -9.0%

FINAL PAYMENTS 67,305 59,752 63,509 70,433 260,998 44,746 93,441 52,164 81,824 272,175

%CHYA 133.6% -18.8% 10.9% -1.4% 13.0% -33.5% 56.4% -17.9% 16.2% 4.3%

REFUNDS 42,388 156,984 85,446 81,453 366,271 39,680 166,537 73,066 57,733 337,016

%CHYA -15.1% 1.0% 46.4% 131.6% 22.5% -6.4% 6.1% -14.5% -29.1% -8.0%

TOTAL 198,245 123,094 96,736 191,793 609,868 141,764 142,581 81,761 219,503 585,608

%CHYA 15.2% -0.9% -8.4% -12.8% -1.9% -28.5% 15.8% -15.5% 14.4% -4.0%

OREGON CORPORATE INCOME TAX REVENUE FORECAST - QUARTERLY COLLECTIONS

Thousands of Dollars - Not Seasonally Adjusted March 2018 UPDATEDUpdated MMM 3/15/2018

55

TABLE B.5

FY FY

2017:3 2017:4 2018:1 2018:2 2018 2018:3 2018:4 2019:1 2019:2 2019

ADVANCE PAYMENTS 179,603 145,787 102,250 185,509 613,149 143,699 193,972 97,314 172,964 607,949

%CHYA 31.4% -32.4% -0.4% -5.1% -5.7% -20.0% 33.1% -4.8% -6.8% -0.8%

FINAL PAYMENTS 42,600 26,460 54,636 73,926 197,622 34,788 85,582 62,566 61,077 244,013

%CHYA -4.8% -71.7% 4.7% -9.7% -27.4% -18.3% 223.4% 14.5% -17.4% 23.5%

REFUNDS 72,225 29,963 87,597 63,498 253,283 50,224 210,912 98,213 71,927 431,276

%CHYA 82.0% -82.0% 19.9% 10.0% -24.8% -30.5% 603.9% 12.1% 13.3% 70.3%

TOTAL 149,978 142,284 69,289 195,937 557,488 128,263 68,641 61,667 162,114 420,686

%CHYA 5.8% -0.2% -15.3% -10.7% -4.8% -14.5% -51.8% -11.0% -17.3% -24.5%

FY FY

2019:3 2019:4 2020:1 2020:2 2020 2020:3 2020:4 2021:1 2021:2 2021

ADVANCE PAYMENTS 162,325 219,111 109,911 197,238 688,586 169,741 228,645 113,852 204,735 716,974

%CHYA 13.0% 13.0% 12.9% 14.0% 13.3% 4.6% 4.4% 3.6% 3.8% 4.1%

FINAL PAYMENTS 35,471 110,121 73,605 69,378 288,575 37,027 125,673 79,804 73,272 315,777

%CHYA 2.0% 28.7% 17.6% 13.6% 18.3% 4.4% 14.1% 8.4% 5.6% 9.4%

REFUNDS 46,833 205,766 93,336 67,859 413,794 47,579 216,862 97,013 70,182 431,636

%CHYA -6.8% -2.4% -5.0% -5.7% -4.1% 1.6% 5.4% 3.9% 3.4% 4.3%

TOTAL 150,963 123,466 90,179 198,758 563,366 159,190 137,456 96,644 207,826 601,115

%CHYA 17.7% 79.9% 46.2% 22.6% 33.9% 5.4% 11.3% 7.2% 4.6% 6.7%

FY FY

2021:3 2021:4 2022:1 2022:2 2022 2022:3 2022:4 2023:1 2023:2 2023

ADVANCE PAYMENTS 176,918 237,907 118,958 214,525 748,307 183,860 247,348 123,772 223,090 778,070

%CHYA 4.2% 4.1% 4.5% 4.8% 4.4% 3.9% 4.0% 4.0% 4.0% 4.0%

FINAL PAYMENTS 39,792 144,451 88,027 80,541 352,811 43,488 162,373 95,672 87,376 388,910

%CHYA 7.5% 14.9% 10.3% 9.9% 11.7% 9.3% 12.4% 8.7% 8.5% 10.2%

REFUNDS 48,848 229,525 101,457 73,016 452,845 50,730 244,809 106,823 76,372 478,733

%CHYA 2.7% 5.8% 4.6% 4.0% 4.9% 3.9% 6.7% 5.3% 4.6% 5.7%

TOTAL 167,862 152,833 105,528 222,050 648,273 176,619 164,913 112,621 234,094 688,247

%CHYA 5.4% 11.2% 9.2% 6.8% 7.8% 5.2% 7.9% 6.7% 5.4% 6.2%

FY FY

2023:3 2023:4 2024:1 2024:2 2024 2024:3 2024:4 2025:1 2025:2 2025

ADVANCE PAYMENTS 187,737 252,538 125,917 226,072 792,265 188,696 252,803 126,171 226,365 794,036

%CHYA 2.1% 2.1% 1.7% 1.3% 1.8% 0.5% 0.1% 0.2% 0.1% 0.2%

FINAL PAYMENTS 46,050 176,944 120,625 105,366 448,985 55,632 246,520 140,898 120,304 563,354

%CHYA 5.9% 9.0% 26.1% 20.6% 15.4% 20.8% 39.3% 16.8% 14.2% 25.5%

REFUNDS 53,331 263,684 130,572 91,510 539,097 61,497 332,162 151,017 104,496 649,172

%CHYA 5.1% 7.7% 22.2% 19.8% 12.6% 15.3% 26.0% 15.7% 14.2% 20.4%

TOTAL 180,456 165,798 115,971 239,928 702,154 182,832 167,161 116,052 242,174 708,219

%CHYA 2.2% 0.5% 3.0% 2.5% 2.0% 1.3% 0.8% 0.1% 0.9% 0.9%

FY FY

2025:3 2025:4 2026:1 2026:2 2026 2026:3 2026:4 2027:1 2027:2 2027

ADVANCE PAYMENTS 191,030 255,830 127,683 228,739 803,282 193,250 258,820 115,338 206,465 773,873

%CHYA 1.2% 1.2% 1.2% 1.0% 1.2% 1.2% 1.2% -9.7% -9.7% -3.7%

FINAL PAYMENTS 64,264 304,615 142,427 123,233 634,539 66,432 306,662 55,964 86,655 515,713

%CHYA 15.5% 23.6% 1.1% 2.4% 12.6% 3.4% 0.7% -60.7% -29.7% -18.7%

REFUNDS 67,401 384,312 151,349 104,741 707,803 67,479 383,990 59,187 46,894 557,549

%CHYA 9.6% 15.7% 0.2% 0.2% 9.0% 0.1% -0.1% -60.9% -55.2% -21.2%

TOTAL 187,893 176,133 118,761 247,231 730,018 192,203 181,493 112,115 246,226 732,036

%CHYA 2.8% 5.4% 2.3% 2.1% 3.1% 2.3% 3.0% -5.6% -0.4% 0.3%

March 2018

OREGON CORPORATE INCOME TAX REVENUE FORECAST - QUARTERLY COLLECTIONS

Thousands of Dollars - Not Seasonally Adjusted

56

Table B.6 Cigarette and Tobacco Tax Distribution

Table B.7 Revenue Distribution to Local Governments

TABLE B.6

Cigarette & Tobacco Tax Distribution (Millions of $)

Tobacco Use Mental Cities, Counties Tobacco Use

General Fund Health Plan Reduction Health State Total & Public Transit Total General Fund Health Plan Reduction State Total

Distribution Forecast*

2015-16 36.214 138.247 5.609 18.950 199.020 10.926 209.946 30.983 23.905 2.659 57.547

2016-17 34.266 136.682 5.452 22.318 198.718 10.904 209.622 31.379 24.734 2.751 58.864

2015-17 Biennium 70.480 274.929 11.061 41.268 397.738 21.830 419.568 62.362 48.639 5.410 116.411 -

2017-18 34.861 135.863 5.419 22.910 199.054 10.839 209.893 32.990 25.453 2.831 61.274

2018-19 33.616 131.012 5.226 22.920 192.774 10.452 203.226 33.419 25.784 2.868 62.071

2017-19 Biennium 68.477 266.875 10.645 45.831 391.828 21.290 413.119 66.409 51.237 5.699 123.344 -

2019-20 33.152 129.201 5.154 22.603 190.110 10.307 200.417 33.977 26.215 2.916 63.108

2020-21 32.454 126.482 5.045 22.128 186.109 10.090 196.199 34.557 26.663 2.965 64.185

2019-21 Biennium 65.606 255.683 10.199 44.731 376.219 20.397 396.616 68.535 52.878 5.881 127.293 -

2021-22 31.938 124.470 4.965 21.776 183.148 9.930 193.078 35.151 27.120 3.016 65.288

2022-23 31.376 122.281 4.878 21.393 179.927 9.755 189.682 35.890 27.691 3.080 66.661

2021-23 Biennium 63.314 246.751 9.842 43.168 363.075 19.685 382.760 71.041 54.811 6.096 131.948 -

2023-24 30.848 120.224 4.796 21.033 176.901 9.591 186.492 36.671 28.293 3.147 68.111

2024-25 30.272 117.977 4.706 20.640 173.594 9.412 183.006 37.399 28.855 3.209 69.462

2023-25 Biennium 61.120 238.201 9.501 41.673 350.495 19.003 369.498 74.069 57.148 6.356 137.573 -

2025-26 29.762 115.992 4.627 20.293 170.674 9.253 179.928 38.067 29.370 3.267 70.704

2026-27 29.312 114.237 4.557 19.985 168.091 9.113 177.204 38.679 29.843 3.319 71.841

2025-27 Biennium 59.074 230.229 9.183 40.278 338.765 18.367 357.132 76.746 59.213 6.586 142.544

March 2018

Cigarette Tax Distribution* Other Tobacco Tax Distribution

* Prior to January 1, 2014 the cigarette tax per pack totaled $1.18 with the following distribution. $0.8574 to the Health Plan, $0.22 to the state general fund, $0.0342 to Tobacco Use Reducation and $0.0684 to Cities, Counties and Public Transit. Following the passage of HB 3601 during the 2013 Special Session, the

following changes were made to cigarette taxes. Beginning January 1, 2014 taxes per pack were raised $0.13 to a total of $1.31 per pack. Beginning January 1, 2016 taxes will increase an additional $0.01 for a total of $1.32 per pack with a further $0.01 increase on January 1, 2018 for a total of $1.33 per pack. The

distribution of the $0.13 increase beginning in 2014 is split $0.10 to Mental Health, $0.013 to the state general fund, $0.002 to Tobacco Use Reduction and $0.016 to the Health Plan. Beginning January 1, 2016 the full tax increase of $0.14 per pack relative to pre-2014 tax rates, is dedicated to Mental Health. Similarly the

full $0.15 post January 1, 2018 is likewise dedicated to Mental Health.

Updated JWL2/12/20189:20 am

57

TABLE B.7

Liquor Apportionment and Revenue Distribution to Local Governments (Millions of $)

Total Liquor

Revenue General Mental Oregon Revenue Cigarette Tax

Available Fund (56%) Health 1

Wine Board Sharing Regular Total Counties Distribution 2

2015-16 224.137 127.421 8.991 0.307 39.735 27.815 67.550 19.868 10.926

2016-17 241.105 137.016 9.254 0.319 42.962 30.073 73.035 21.481 10.904

2015-17 Biennium 465.242 264.437 18.245 0.627 82.697 57.888 140.585 41.349 21.830

2017-18 274.169 155.717 9.091 0.324 49.566 34.696 84.262 24.783 10.839

2018-19 292.677 166.229 9.705 0.338 52.912 37.038 89.950 26.456 10.452

2017-19 Biennium 566.846 321.946 18.795 0.662 102.478 71.734 174.212 51.239 21.290

2019-20 305.627 173.709 9.928 0.346 55.293 38.705 93.998 27.646 10.307

2020-21 319.155 181.526 10.156 0.355 57.781 40.447 98.228 28.891 10.090

2019-21 Biennium 624.782 355.235 20.084 0.701 113.074 79.152 192.226 56.537 20.397

2021-22 333.286 189.694 10.390 0.364 60.381 42.267 102.648 30.191 9.930

2022-23 348.048 198.231 10.629 0.373 63.098 44.169 107.267 31.549 9.755

2021-23 Biennium 681.335 387.925 21.018 0.736 123.480 86.436 209.915 61.740 19.685

2023-24 363.469 207.151 10.873 0.382 65.938 46.156 112.094 32.969 9.591

2024-25 379.578 216.473 11.123 0.392 68.905 48.233 117.138 34.452 9.412

2023-25 Biennium 743.048 423.624 21.996 0.774 134.843 94.390 229.233 67.421 19.003

2025-26 396.407 226.214 11.379 0.401 50.404 72.006 122.410 36.003 9.253

2026-27 413.987 236.394 11.641 0.411 52.672 75.246 127.918 37.623 9.113

2025-27 Biennium 810.394 462.608 23.020 0.813 103.076 147.252 250.328 73.626 18.367

1 Mental Health Alcoholism and Drug Services Account, per ORS 471.810

2 For details on cigarette revenues see TABLE B.6 on previous page

March 2018

Liquor Apportionment Distribution

City Revenue

58

Table B.8 Track Record for the December 2017 Forecast

(Millions of dollars)

Actual

Revenues

Latest

Forecast

Percent

Difference

Prior

Year

Percent

Change

Withholding $1,836.2 $1,769.2 3.8% $1,705.3 7.7%

Dollar difference $67.0 $131.0

Estimated Payments* $451.0 $324.2 39.1% $319.2 41.3%

Dollar difference $126.9 $131.8

Final Payments* $169.8 $146.0 16.3% $144.2 17.7%

Dollar difference $23.8 $25.5

Refunds -$266.5 -$277.8 -4.1% -$254.9 4.6%

Dollar difference $11.3 -$11.6

Total Personal Income Tax $2,190.6 $1,961.6 11.7% $1,913.9 14.5%

Dollar difference $229.0 $276.7

(Millions of dollars)

Actual

Revenues

Latest

Forecast

Percent

Difference

Prior

Year

Percent

Change

Advanced Payments $145.8 $201.7 -27.7% $215.7 -32.4%

Dollar difference -$55.9 -$69.9

Final Payments $26.5 $107.0 -75.3% $93.4 -71.7%

Dollar difference -$80.6 -$67.0

Refunds -$30.0 -$176.9 -83.1% -$166.5 -82.0%

Dollar difference $146.9 $136.6

Total Corporate Income Tax $142.3 $131.9 7.9% $142.6 -0.2%

Dollar difference $10.4 -$0.3

(Millions of dollars)

Actual

Revenues

Latest

Forecast

Percent

Difference

Prior

Year

Percent

Change

Corporate and Personal Tax $2,332.9 $2,093.4 11.4% $2,056.5 13.4%

Dollar difference $239.5 $276.4

* A new processing system for the personal income tax program was deployed in November. Data on estimated and other personal income tax payments has yet to become available.

Corporate Income Tax Forecast Comparison

Table B.8 Track Record for the December 2017 Forecast(Quarter ending December 31, 2017)

Total Income Tax Forecast Comparison Year/Year Change

Forecast Comparison Year/Year Change

Year/Year Change

Personal Income Tax

59

Table B.9 Summary of Lottery Resources

TABLE B.9 Mar 2018 Forecast

Summary of Lottery Resources

2017-19 2019-21 2021-23 2023-25 2025-207

(in millions of dollars)

Current

Forecast

Change from

Dec-17

Change from

COS 2017

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

LOTTERY EARNINGS

Traditional Lottery 141.290 9.231 18.307 126.062 3.636 125.924 3.564 125.946 3.570 125.989 3.576

Video Lottery 1,213.520 20.053 90.329 1,285.284 8.592 1,402.036 4.620 1,488.744 1.787 1,579.303 0.519

Administrative Actions 32.413 0.000 1.713 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Total Available to Transfer 1,387.223 29.284 110.350 1,411.345 12.228 1,527.960 8.184 1,614.691 5.357 1,705.292 4.095

ECONOMIC DEVELOPMENT FUND

Beginning Balance 49.017 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Transfers from Lottery 1,387.223 29.284 110.350 1,411.345 12.228 1,527.960 8.184 1,614.691 5.357 1,705.292 4.095

Other Resources1

6.035 0.000 0.000 2.000 0.000 2.000 0.000 2.000 0.000 2.000 0.000

Total Available Resources 1,442.275 29.284 110.350 1,413.345 12.228 1,529.960 8.184 1,616.691 5.357 1,707.292 4.095

ALLOCATION OF RESOURCES

Constitutional Distributions

Education Stability Fund2

249.700 5.271 19.863 254.042 2.201 275.033 1.473 290.644 0.964 306.953 0.737

Parks and Natural Resources Fund3

208.083 4.393 16.552 211.702 1.834 229.194 1.228 242.204 0.804 255.794 0.614

Veterans' Services Fund4

20.808 0.439 1.655 21.170 0.183 22.919 0.123 24.220 0.080 25.579 0.061

Other Distributions

Outdoor School Education Fund5

24.000 0.000 0.000 46.806 (0.621) 49.357 (0.556) 51.751 (0.583) 54.261 (0.611)

County Economic Development 41.286 0.000 0.000 51.411 0.344 56.081 0.185 59.550 0.071 63.172 0.021

HECC Collegiate Athletic & Scholarships6

8.240 0.000 0.000 14.113 0.122 15.280 0.082 16.147 0.054 17.053 0.041

Gambling Addiction 6

12.457 0.000 0.000 14.113 0.122 15.280 0.082 16.147 0.054 17.053 0.041

County Fairs 3.828 0.000 0.000 3.828 0.000 3.828 0.000 3.828 0.000 3.828 0.000

Other Legislatively Adopted Allocations7

782.449 0.000 0.000 235.300 0.000 238.900 0.000 234.300 0.000 234.300 0.000

Total Distributions 1,350.852 10.103 38.071 852.486 4.186 905.872 2.616 938.791 1.444 977.993 0.90

Ending Balance/Discretionary Resources 91.422 19.181 72.279 560.859 8.042 624.088 5.568 677.900 3.913 729.299 3.191

Note: Some totals may not foot due to rounding.

1. Includes interest earnings on Economic Development Fund and reversions.

2. Eighteen percent of proceeds accrue to the Ed. Stability Fund, until the balance equals 5% of GF Revenues. Thereafter, 15% of proceeds accrue to the School Capital Matching Fund.

3. The Parks and Natural Resources Fund Constitutional amendment requires 15% of net proceeds be transferred to this fund.

4. Per Ballot Measure 96 (2016), 1.5% of net lottery proceeds are dedicated to the Veterans' Services Fund

5. Per Ballot Measure 99 (2016), the lesser of 4% of Lottery transfers or $22 million per year is transferred to the Outdoor Education Account. Adjusted annually for inflation.

6. Approximately one percent of net lottery proceeds are dedicated to each program. Certain limits are imposed by the Legislature.

7. Includes Debt Service Allocations, Allocations to State School Fund and Other Agency Allocations

60

Table B.10 Budgetary Reserve Summary and Outlook

Table B.10: Budgetary Reserve Summary and Outlook Mar 2018

Rainy Day Fund(Millions) 2013-15 2015-17 2017-19 2019-21 2021-23 2023-25

Beginning Balance $61.9 $211.8 $376.4 $594.5 $875.1 $1,199.1

Interest Earnings $1.3 $6.3 $22.5 $47.9 $68.0 $90.5

Deposits1

$148.7 $158.3 $195.6 $232.6 $256.1 $279.7

Triggered Withdrawals $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Ending Balance2

$211.8 $376.4 $594.5 $875.1 $1,199.1 $1,569.3

Education Stability Fund3

(Millions) 2013-15 2015-17 2017-19 2019-21 2021-23 2023-25

Beginning Balance $7.4 $179.4 $384.2 $608.5 $835.6 $957.7

Interest Earnings4

$1.0 $5.2 $21.6 $47.2 $61.1 $68.3

Deposits5

$171.9 $204.4 $224.7 $227.1 $122.1 $95.8

Distributions $1.0 $5.2 $21.6 $47.2 $61.1 $68.3

Oregon Education Fund $0.7 $0.1 $0.0 $0.0 $0.0 $0.0

Oregon Opportunity Grant $0.2 $5.2 $21.6 $47.2 $61.1 $68.3

Withdrawals $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Ending Balance $179.4 $384.2 $608.5 $835.6 $957.7 $1,053.4

Total Reserves(Millions) 2013-15 2015-17 2017-19 2019-21 2021-23 2023-25

Ending Balances $391.2 $760.6 $1,203.0 $1,710.7 $2,156.8 $2,622.7

Percent of General Fund Revenues 2.4% 4.1% 6.2% 7.9% 9.1% 10.1%

Footnotes:

1. Includes transfer of ending General Fund balances up to 1% of budgeted appropriations as well as private donations. Assumes future appropriations

equal to 98.75 percent of available resources. Includes forecast for corporate income taxes above rate of 6.6% for the biennium are deposited on or

before Jun 30 of each odd-numbered year.

2. Available funds in a given biennium equal 2/3rds of the beginning balance under current law.

3. Excludes funds in the Oregon Growth and the Oregon Resource and Technology Development subaccounts.

4. Interest earnings are distributed to the Oregon Education Funds (75%) and the State Scholarship Fund (25%), provided there remains debt

outstanding. In the event that debt is paid off, all interest earnings distributed to the State Scholarship Fund.

5. Contributions to the ESF are capped at 5% of the prior biennium's General Fund revenue total. Quarterly contributions are made until the balance

exceeds the cap.

61

Table B.11 Recreational Marijuana Resources and Distributions

TABLE B.11

Summary of Marijuana Resources

2017-19 2019-21 2021-23 2023-25 2025-27

(in millions of dollars)

Current

Forecast

Change from

Dec-17

Change from

COS 2017

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

Current

Forecast

Change from

Dec-17

MARIJUANA EARNINGS

+ Tax Revenue 1

160.569 0.664 2.373 215.280 0.000 244.018 0.000 268.576 0.000 293.821 0.000

- Administrative Costs 2

15.478 0.027 (0.303) 13.225 0.233 13.225 0.233 13.225 0.233 13.225 0.233

Net Available to Transfer 145.092 0.637 2.676 202.055 (0.233) 230.793 (0.233) 255.351 (0.233) 280.596 (0.233)

OREGON MARIJUANA ACCOUNT

Beginning Balance 59.304 0.000 (0.748) 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Revenue Transfers 145.092 0.637 2.676 202.055 (0.233) 230.793 (0.233) 255.351 (0.233) 280.596 (0.233)

Other Resources 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Total Available Resources 204.396 0.637 1.928 202.055 (0.233) 230.793 (0.233) 255.351 (0.233) 280.596 (0.233)

ALLOCATION OF RESOURCES

State School Fund (40%) 80.987 0.000 0.000 80.822 (0.093) 92.317 (0.093) 102.140 (0.093) 112.238 (0.093)

Mental Health, Alcoholism, & Drug

Services (20%)40.494 0.000 0.000 40.411 (0.047) 46.159 (0.047) 51.070 (0.047) 56.119 (0.047)

State Police (15%) 30.370 0.000 0.000 30.308 (0.035) 34.619 (0.035) 38.303 (0.035) 42.089 (0.035)

Cities (10%) 20.440 0.064 0.193 20.205 (0.023) 23.079 (0.023) 25.535 (0.023) 28.060 (0.023)

Counties (10%) 20.440 0.064 0.193 20.205 (0.023) 23.079 (0.023) 25.535 (0.023) 28.060 (0.023)

Alcohol & Drug Abuse Prevention,

Intervention & Treatment (5%)10.123 0.000 0.000 10.103 (0.012) 11.540 (0.012) 12.768 (0.012) 14.030 (0.012)

Total Distributions 3

202.854 0.127 0.000 202.055 (0.233) 230.793 (0.233) 255.351 (0.233) 280.596 (0.233)

Ending Balance 1.542 0.510 1.543 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Note: Some totals may not foot due to rounding.

Mar 2018

1. Retailers pay taxes monthly, however taxes are not available for distribution to recepient programs until the Department of Revenue receives and processes retailers' quarterly tax returns. As such, there is a one to two quarter lag between when the initial monthly payments are made and when

monies be come available to distribute.

2. In 2015-17, Administrative Costs include $7.7 million in one-time costs associated with program start-up, including construction funds for the Department of Revenue, and repayment of the Liquor Fund loan for OLCC. Administrative Costs for 2017-19 and beyond reflect monthly collection costs for the

Department of Revenue.

3. Revenues are not distributed to recipient programs until the OLCC liquor fund loan has been repayed. This is due to occur at the end of the 2015-17 biennium. As such, no distributions are likely to be made in 2015-17. These monies will be carried forward into 2017-19 for distribution when the

liquor fund loan has been repayed, and retailers' quarterly tax returns are processed.

62

APPENDIX C: POPULATION FORECASTS BY AGE AND SEX

Table C.1 Population Forecasts: Component of Change 1990-2026 ………………………….………………... 63

Table C.2 Population Forecasts by Age and Sex: 2000-2026 ………………………………………………..……….. 64

Table C.3 Population of Oregon: 1980-2026 …………………………………………………………………………………. 65

Table C.4 Children: Ages 0-4 ……………………………………………………………………………………………………..…. 65

Table C.5 School Age Population: Ages 5-17 ……………………………………………………………………………..…. 65

Table C.6 Young Adult Population: Ages 18-24 ……………………………………………………….……………….….. 65

Table C.7 Criminally At Risk Population: Males Ages 15-39 …………………………………………….……………. 66

Table C.8 Prime Wage Earners: Ages 25-44 ………………………………………………………………………………….. 66

Table C.9 Older Wage Earners: Ages 45-64 ………………………………………………………………………………….. 66

Table C.10 Elderly Population by Age Group ………………………………………………………………………………… 66

63

Table C.1 Population Forecasts Component of Change 1990-2026

STATE OF OREGON

POPULATION FORECASTS

COMPONENTS OF CHANGE 1990 -2026

Year Population Change Births Deaths Natural Net Migration

(July 1) Population Number Percent Number Rate/1000 Number Rate/1000 Increase Number Rate/1000------ ----------- ----------- -------- ----------- -------- ----------- -------- ----------- ----------- --------

1990 2,860,400 69,800 2.50 42,008 14.87 24,763 8.76 17,245 52,555 18.60

1991 2,928,500 68,100 2.38 42,682 14.75 24,944 8.62 17,738 50,362 17.40

1992 2,991,800 63,300 2.16 42,427 14.33 25,166 8.50 17,261 46,039 15.55

1993 3,060,400 68,600 2.29 41,442 13.69 26,543 8.77 14,899 53,701 17.75

1994 3,121,300 60,900 1.99 41,487 13.42 27,564 8.92 13,923 46,977 15.20

1995 3,184,400 63,100 2.02 42,426 13.46 27,552 8.74 14,874 48,226 15.30

1990-1995 324,000 210,464 131,769 78,695 245,305

1996 3,247,100 62,700 1.97 43,196 13.43 28,768 8.95 14,428 48,272 15.01

1997 3,304,300 57,200 1.76 43,625 13.32 29,201 8.91 14,424 42,776 13.06

1998 3,352,400 48,100 1.46 44,696 13.43 28,705 8.62 15,991 32,109 9.65

1999 3,393,900 41,500 1.24 45,188 13.40 29,848 8.85 15,340 26,160 7.76

2000 3,431,100 37,200 1.10 45,534 13.34 28,909 8.47 16,625 20,575 6.03

1995-2000 246,700 222,239 145,431 76,808 169,892

2001 3,470,400 39,300 1.15 45,536 13.20 29,934 8.67 15,602 23,698 6.87

2002 3,502,600 32,200 0.93 44,995 12.91 30,828 8.84 14,167 18,033 5.17

2003 3,538,600 36,000 1.03 45,686 12.98 30,604 8.69 15,082 20,918 5.94

2004 3,578,900 40,300 1.14 45,599 12.81 30,721 8.63 14,878 25,422 7.14

2005 3,626,900 48,000 1.34 45,892 12.74 30,717 8.53 15,175 32,825 9.11

2000-2005 195,800 227,708 152,804 74,904 120,896

2006 3,685,200 58,300 1.61 46,946 12.84 30,771 8.42 16,175 42,125 11.52

2007 3,739,400 54,200 1.47 49,404 13.31 31,396 8.46 18,008 36,192 9.75

2008 3,784,200 44,800 1.20 49,659 13.20 32,008 8.51 17,651 27,149 7.22

2009 3,815,800 31,600 0.84 47,960 12.62 31,382 8.26 16,578 15,022 3.95

2010 3,837,300 21,500 0.56 46,256 12.09 31,689 8.28 14,567 6,933 1.81

2005-2010 210,400 240,225 157,246 82,979 127,421

2011 3,857,625 20,325 0.53 45,381 11.80 32,437 8.43 12,944 7,381 1.92

2012 3,883,735 26,110 0.68 44,897 11.60 32,804 8.47 12,093 14,017 3.62

2013 3,919,020 35,285 0.91 44,969 11.53 33,168 8.50 11,801 23,484 6.02

2014 3,962,710 43,690 1.11 45,447 11.53 33,731 8.56 11,716 31,974 8.11

2015 4,013,845 51,135 1.29 45,660 11.45 35,318 8.86 10,342 40,793 10.23

2010-2015 176,545 226,354 167,458 58,896 117,649

2016 4,076,350 62,505 1.56 45,647 11.28 35,339 8.74 10,308 52,197 12.90

2017 4,141,100 64,749 1.59 45,861 11.16 36,629 8.92 9,232 55,518 13.51

2018 4,203,200 62,100 1.50 46,350 11.11 37,635 9.02 8,715 53,385 12.80

2019 4,263,300 60,100 1.43 46,786 11.05 38,227 9.03 8,559 51,541 12.18

2020 4,321,400 58,100 1.36 47,131 10.98 38,878 9.06 8,253 49,847 11.61

2015-2020 307,554 231,776 186,709 45,067 262,488

2021 4,376,400 55,000 1.27 47,365 10.89 39,609 9.11 7,756 47,244 10.86

2022 4,430,300 53,900 1.23 47,511 10.79 40,395 9.17 7,116 46,784 10.62

2023 4,482,200 51,900 1.17 47,576 10.68 41,239 9.25 6,337 45,562 10.22

2024 4,532,100 49,900 1.11 47,550 10.55 42,167 9.36 5,383 44,517 9.88

2025 4,581,000 48,900 1.08 47,415 10.41 43,118 9.46 4,297 44,602 9.79

2020-2025 259,600 237,417 206,528 30,889 228,711

2026 4,628,900 47,900 1.05 47,184 10.25 44,062 9.57 3,122 44,778 9.72

1990-2000 570,700 432,703 277,200 155,503 415,197 13.20

2000-2010 406,200 467,933 310,050 157,883 248,317 6.83

2010-2020 484,100 458,130 354,167 103,963 380,137 9.32

2016-2026 552,550 470,730 401,960 68,770 483,780 11.11

Sources: 1990-1999 population - U.S. Census Bureau; 2000-2009 population - intercensal estimates by Office of Economic Analysis;

population estimates 2010-2017 by Population Research Center, PSU; births and deaths 1990-16: Oregon Center for Health Statistics.

64

Table C.2 Population Forecasts by Age and Sex: 2000-2026

2000 2001 2002 2003 2004 2005 2006

Age Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total

0-4 114,100 109,107 223,207 114,742 109,903 224,645 115,219 109,865 225,084 116,118 110,533 226,652 117,038 111,315 228,353 117,847 112,161 230,008 118,832 113,050 231,882

5- 9 119,699 113,984 233,683 118,879 113,240 232,119 117,908 112,625 230,533 117,595 112,522 230,117 118,055 112,983 231,038 118,737 113,851 232,588 119,959 115,315 235,274

10-14 124,726 118,350 243,076 125,950 119,470 245,421 126,474 120,344 246,818 127,007 120,408 247,415 126,169 119,728 245,898 124,732 118,604 243,336 124,400 118,240 242,639

15-19 126,002 119,265 245,267 127,311 119,879 247,190 127,250 119,862 247,112 126,490 120,236 246,726 127,484 121,227 248,711 129,634 122,978 252,612 131,680 124,886 256,567

20-24 119,300 113,318 232,618 120,814 115,792 236,605 122,925 118,001 240,926 125,433 119,922 245,356 127,001 121,951 248,952 128,090 122,777 250,867 129,625 123,869 253,494

25-29 120,547 112,269 232,816 119,436 111,809 231,245 119,216 112,937 232,153 120,690 114,847 235,536 122,799 117,484 240,282 125,208 121,121 246,329 128,110 125,220 253,330

30-34 122,441 114,757 237,198 125,882 117,768 243,651 127,842 119,417 247,259 128,373 120,485 248,858 127,650 119,951 247,601 126,179 119,324 245,503 126,016 119,767 245,782

35-39 128,698 126,230 254,928 125,463 122,883 248,346 123,019 119,340 242,360 121,225 116,792 238,017 121,489 116,438 237,927 124,789 119,125 243,914 128,779 122,827 251,606

40-44 134,421 137,137 271,558 134,585 136,761 271,346 133,102 135,121 268,224 131,876 133,467 265,343 131,106 132,016 263,121 129,401 129,428 258,829 126,728 126,664 253,391

45-49 135,644 137,430 273,074 136,214 138,948 275,162 136,992 140,305 277,297 136,336 140,343 276,679 134,864 139,381 274,245 134,310 139,320 273,629 135,135 139,543 274,678

50-54 118,659 119,623 238,282 125,826 127,295 253,120 126,548 128,354 254,902 129,544 132,212 261,756 132,767 136,330 269,097 135,022 138,899 273,921 136,187 140,978 277,165

55-59 85,965 88,187 174,151 89,314 91,758 181,072 98,235 100,967 199,202 103,863 106,596 210,460 109,932 112,923 222,855 117,120 120,794 237,914 124,581 129,098 253,680

60-64 64,543 67,459 132,003 67,383 70,539 137,922 70,666 74,175 144,841 75,490 79,114 154,604 80,095 83,740 163,835 84,062 88,300 172,361 87,811 92,304 180,115

65-69 53,103 59,261 112,364 53,861 59,438 113,299 54,996 60,295 115,291 56,889 62,083 118,972 59,083 64,273 123,356 61,643 66,384 128,027 64,860 69,850 134,710

70-74 48,532 58,102 106,633 48,249 57,290 105,539 47,788 56,535 104,323 47,448 55,941 103,389 47,523 55,493 103,016 48,249 55,650 103,899 49,222 55,999 105,221

75-79 40,475 54,794 95,269 40,503 54,397 94,900 40,508 53,697 94,204 40,627 52,917 93,545 40,403 52,009 92,412 40,366 51,512 91,878 40,359 51,026 91,385

80-84 26,469 40,450 66,919 27,465 41,513 68,978 28,398 42,507 70,905 28,798 43,326 72,124 29,266 44,164 73,430 29,725 44,474 74,199 29,996 44,406 74,402

85+ 18,517 39,538 58,055 19,293 40,549 59,843 19,854 41,313 61,167 20,727 42,323 63,050 21,444 43,325 64,769 22,398 44,689 67,087 23,554 46,323 69,877

Total 1,701,841 1,729,259 3,431,100 1,721,170 1,749,230 3,470,400 1,736,939 1,765,661 3,502,600 1,754,532 1,784,068 3,538,600 1,774,167 1,804,733 3,578,900 1,797,511 1,829,389 3,626,900 1,825,834 1,859,366 3,685,200

Mdn. Age 35.2 37.6 36.4 35.3 37.8 36.6 35.5 38.0 36.8 35.7 38.2 36.9 35.8 38.4 37.1 36.0 38.5 37.2 36.3 38.6 37.3

2007 2008 2009 2010 2011 2012 2013

Age Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total

0-4 121,058 115,102 236,160 122,723 116,618 239,340 123,056 116,873 239,929 122,327 116,130 238,457 121,092 115,088 236,180 119,516 113,359 232,875 118,293 111,850 230,143

5- 9 120,925 115,818 236,743 121,906 116,639 238,545 122,109 116,793 238,901 121,539 116,369 237,908 121,767 115,893 237,660 122,733 116,900 239,634 124,024 117,953 241,977

10-14 124,017 118,145 242,162 124,144 118,401 242,545 124,495 118,646 243,140 124,508 118,732 243,241 124,074 119,044 243,118 123,603 118,287 241,890 123,386 118,206 241,593

15-19 133,027 126,562 259,588 134,019 127,039 261,058 133,094 126,245 259,339 131,126 124,540 255,667 129,068 121,927 250,996 127,517 120,587 248,104 126,643 119,875 246,518

20-24 129,491 124,047 253,538 128,090 124,102 252,192 128,034 124,294 252,328 128,787 124,903 253,689 130,576 126,691 257,267 132,853 128,787 261,640 135,293 130,705 265,998

25-29 131,446 128,889 260,335 134,251 131,308 265,559 134,893 132,724 267,617 134,019 131,816 265,835 133,302 130,829 264,132 132,463 129,927 262,390 132,508 130,403 262,911

30-34 126,936 121,971 248,907 128,841 124,231 253,072 130,499 126,264 256,763 131,489 128,325 259,814 133,512 130,743 264,255 135,689 133,329 269,018 137,321 135,074 272,395

35-39 131,387 125,260 256,647 132,046 126,581 258,627 130,807 125,534 256,341 128,070 123,596 251,665 125,924 121,787 247,710 126,018 122,275 248,293 128,683 124,338 253,022

40-44 124,917 123,759 248,677 123,362 121,440 244,802 123,395 120,853 244,249 125,969 122,843 248,811 128,974 125,358 254,332 130,795 126,620 257,415 131,483 127,467 258,950

45-49 134,349 138,533 272,882 133,523 137,181 270,705 132,802 135,635 268,437 130,825 132,538 263,363 127,795 128,542 256,337 125,434 124,976 250,410 123,864 122,179 246,043

50-54 137,589 142,901 280,489 137,266 143,176 280,443 135,862 142,064 277,926 135,129 141,565 276,693 134,682 140,654 275,335 133,445 139,197 272,643 132,080 137,545 269,625

55-59 125,683 130,760 256,444 128,665 134,868 263,533 131,454 138,782 270,236 133,011 140,802 273,812 134,009 142,349 276,358 134,403 143,058 277,461 134,376 142,746 277,122

60-64 97,117 102,054 199,171 102,948 107,873 210,821 108,952 114,138 223,090 115,236 121,045 236,281 121,440 127,818 249,258 122,921 129,548 252,470 124,925 132,821 257,745

65-69 68,563 73,945 142,509 73,612 79,164 152,776 78,191 83,768 161,959 81,854 87,917 169,771 84,425 90,852 175,277 92,096 98,785 190,881 97,983 105,059 203,042

70-74 50,569 57,052 107,622 52,510 58,915 111,425 54,604 61,042 115,646 56,925 62,949 119,874 59,485 65,640 125,125 62,496 69,113 131,609 67,184 73,899 141,083

75-79 40,218 50,594 90,812 40,073 50,211 90,285 40,236 49,905 90,141 40,932 50,101 91,034 41,549 50,075 91,624 42,654 50,692 93,346 44,224 52,064 96,287

80-84 30,251 44,085 74,336 30,464 43,606 74,069 30,361 43,011 73,372 30,391 42,734 73,126 30,500 42,287 72,787 30,560 41,822 72,381 30,774 41,257 72,031

85+ 24,585 47,794 72,379 25,325 49,078 74,403 26,014 50,369 76,383 26,800 51,458 78,258 27,598 52,275 79,874 28,360 52,915 81,276 28,995 53,538 82,533

Total 1,852,129 1,887,271 3,739,400 1,873,769 1,910,431 3,784,200 1,888,859 1,926,941 3,815,800 1,898,938 1,938,362 3,837,300 1,909,773 1,947,852 3,857,625 1,923,557 1,960,178 3,883,735 1,942,040 1,976,980 3,919,020

Mdn. Age 36.5 38.7 37.5 36.7 38.8 37.8 37.0 39.1 38.0 37.2 39.4 38.3 37.4 39.7 38.5 37.6 39.9 38.7 37.8 40.0 38.9

2014 2015 2016 2017 2018 2019 2020

Age Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total

0-4 117,872 111,493 229,365 118,065 111,542 229,607 119,058 112,181 231,240 120,160 113,255 233,416 121,095 113,969 235,064 121,781 114,535 236,315 122,393 115,092 237,485

5- 9 124,734 118,038 242,772 125,502 118,321 243,824 125,540 118,120 243,660 125,221 117,252 242,472 125,019 116,458 241,478 125,252 116,538 241,789 125,751 116,771 242,522

10-14 123,403 118,463 241,865 122,975 118,328 241,303 123,808 118,633 242,441 125,546 120,542 246,088 127,461 122,288 249,748 128,580 122,811 251,391 129,595 123,350 252,945

15-19 126,847 119,972 246,819 127,735 120,633 248,368 128,448 121,638 250,086 129,097 121,847 250,944 129,478 122,163 251,641 129,862 122,682 252,543 129,576 122,661 252,237

20-24 136,741 132,080 268,821 137,304 132,672 269,977 137,526 132,652 270,179 138,058 133,209 271,267 138,121 133,525 271,646 138,728 134,028 272,756 139,564 134,608 274,171

25-29 134,578 132,874 267,452 137,959 137,056 275,015 143,647 143,913 287,560 149,248 150,149 299,398 154,482 155,657 310,139 157,610 159,263 316,873 158,677 160,569 319,246

30-34 139,932 137,412 277,344 141,525 138,707 280,232 144,070 140,722 284,792 146,124 142,817 288,941 148,399 145,568 293,967 152,221 149,918 302,139 156,751 155,468 312,219

35-39 130,858 126,562 257,420 134,484 129,808 264,292 138,182 133,110 271,291 142,277 136,955 279,232 145,217 139,446 284,663 148,788 142,340 291,128 150,889 143,935 294,825

40-44 131,047 126,698 257,745 130,040 125,302 255,342 129,051 124,315 253,366 130,180 125,641 255,822 133,696 128,254 261,951 136,452 130,858 267,311 140,462 134,336 274,798

45-49 124,309 121,474 245,783 127,060 123,545 250,606 131,248 126,803 258,051 134,127 128,864 262,991 135,564 130,217 265,782 135,578 129,744 265,322 134,739 128,449 263,188

50-54 131,568 136,140 267,708 129,981 133,569 263,550 127,849 130,620 258,469 126,374 127,681 254,055 125,373 125,428 250,800 126,227 125,051 251,278 129,247 127,426 256,674

55-59 133,344 142,041 275,385 133,245 142,271 275,516 133,805 142,711 276,517 133,238 142,210 275,449 132,444 141,305 273,749 132,277 140,331 272,608 130,827 137,740 268,567

60-64 127,753 136,837 264,590 130,407 139,689 270,096 132,876 142,411 275,287 134,403 144,187 278,590 135,275 144,631 279,906 134,785 144,375 279,159 134,935 144,796 279,731

65-69 103,544 110,487 214,031 109,922 117,550 227,472 116,865 124,948 241,813 119,210 127,434 246,643 121,902 131,203 253,105 125,156 135,503 260,659 128,022 138,480 266,502

70-74 71,303 78,473 149,776 74,860 82,510 157,370 77,693 85,603 163,297 85,397 93,597 178,994 91,336 99,832 191,168 96,826 105,140 201,965 102,960 111,910 214,870

75-79 46,443 54,145 100,588 48,615 56,084 104,698 51,005 58,688 109,693 53,755 62,016 115,771 57,957 66,423 124,380 61,615 70,583 132,198 64,784 74,217 139,001

80-84 31,046 40,788 71,834 31,707 40,809 72,517 32,515 40,929 73,444 33,598 41,561 75,159 35,014 42,718 77,732 36,893 44,425 81,319 38,766 46,046 84,811

85+ 29,522 53,890 83,411 30,095 53,967 84,062 30,847 54,319 85,166 31,462 54,407 85,869 32,032 54,251 86,283 32,554 53,992 86,546 33,492 54,116 87,608

Total 1,964,844 1,997,866 3,962,710 1,991,483 2,022,363 4,013,845 2,024,032 2,052,318 4,076,350 2,057,475 2,083,625 4,141,100 2,089,865 2,113,335 4,203,200 2,121,185 2,142,115 4,263,300 2,151,430 2,169,970 4,321,400

Mdn. Age 38.0 40.1 39.0 38.1 40.2 39.1 38.2 40.2 39.2 38.3 40.2 39.2 38.4 40.3 39.3 38.6 40.3 39.4 38.7 40.4 39.6

2021 2022 2023 2024 2025 2026

Age Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total

0-4 123,171 115,840 239,011 123,934 116,609 240,543 124,477 117,178 241,655 124,767 117,499 242,266 125,003 117,754 242,756 125,221 117,970 243,191

5- 9 126,449 117,166 243,616 127,167 117,664 244,831 127,796 118,166 245,961 128,243 118,580 246,823 128,714 119,067 247,782 129,415 119,780 249,195

10-14 129,506 123,044 252,550 128,909 121,862 250,771 128,390 120,692 249,082 128,381 120,495 248,876 128,664 120,488 249,151 129,299 120,807 250,106

15-19 130,256 122,764 253,020 131,646 124,370 256,016 133,214 125,829 259,043 134,040 126,103 260,143 134,829 126,441 261,271 134,560 125,971 260,531

20-24 139,730 135,160 274,890 139,825 134,553 274,378 140,045 134,659 274,703 140,214 134,932 275,147 139,674 134,659 274,333 140,023 134,369 274,392

25-29 158,134 159,549 317,682 157,382 159,001 316,383 156,633 158,286 314,919 156,632 157,960 314,592 157,143 158,043 315,186 157,252 158,502 315,755

30-34 162,667 162,716 325,382 168,471 169,499 337,970 173,409 174,667 348,076 176,003 177,697 353,700 176,491 178,372 354,863 175,477 176,795 352,272

35-39 153,231 145,800 299,031 154,995 147,517 302,513 156,972 150,143 307,116 160,624 154,424 315,047 165,114 159,976 325,090 171,137 167,306 338,443

40-44 144,171 137,673 281,844 147,907 141,131 289,038 150,668 143,502 294,171 154,093 146,294 300,387 156,048 147,780 303,829 158,351 149,605 307,955

45-49 133,534 127,308 260,842 134,463 128,326 262,789 137,839 130,844 268,683 140,430 133,348 273,778 144,373 136,783 281,156 148,074 140,106 288,180

50-54 133,368 130,669 264,037 136,062 132,543 268,605 137,264 133,731 270,995 137,061 133,052 270,113 136,089 131,577 267,667 134,826 130,330 265,155

55-59 128,548 134,517 263,066 126,794 131,468 258,261 125,617 128,914 254,531 126,309 128,318 254,627 129,203 130,603 259,806 133,284 133,841 267,124

60-64 135,288 145,038 280,326 134,599 144,447 279,046 133,506 143,304 276,810 133,061 142,103 275,164 131,410 139,336 270,746 129,052 135,983 265,035

65-69 130,204 141,044 271,249 131,588 142,622 274,210 132,210 142,926 275,136 131,508 142,548 274,056 131,524 142,895 274,419 131,832 143,088 274,920

70-74 109,189 118,784 227,974 111,359 121,107 232,465 113,786 124,713 238,500 116,709 128,781 245,490 119,306 131,620 250,926 121,314 134,028 255,341

75-79 67,128 76,960 144,088 73,801 84,180 157,981 79,000 89,928 168,928 83,730 94,775 178,505 89,002 100,916 189,918 94,371 107,046 201,417

80-84 40,638 48,232 88,870 42,811 51,015 93,826 46,176 54,798 100,975 49,081 58,351 107,432 51,589 61,431 113,021 53,471 63,719 117,190

85+ 34,334 54,590 88,924 35,345 55,326 90,672 36,527 56,389 92,917 38,070 57,883 95,953 39,720 59,360 99,080 41,421 61,277 102,698

Total 2,179,547 2,196,853 4,376,400 2,207,059 2,223,241 4,430,300 2,233,531 2,248,668 4,482,200 2,258,956 2,273,145 4,532,100 2,283,898 2,297,102 4,581,000 2,308,379 2,320,522 4,628,900

Mdn. Age 38.9 40.6 39.7 39.1 40.7 39.9 39.2 40.8 40.0 39.4 41.0 40.2 39.6 41.1 40.3 39.7 41.3 40.5

State of Oregon

Oregon's Population Forecasts by Age and Sex: 2000-2026 (July 1 population)

(July 1 Population)

65

Table C.3 Population of Oregon: 1990-2026

Table C.4 Children: Ages 0-4 Table C.5 School Age

Population: Ages 5-17

Table C.6 Young Adult

Population: Ages 18-24

Year Total

(July 1) Population Number Percent

--------- ---------------- ---------------- ----------------

1990 2,860,400 - -

1991 2,928,500 68,100 2.38%

1992 2,991,800 63,300 2.16%

1993 3,060,400 68,600 2.29%

1994 3,121,300 60,900 1.99%

1995 3,184,400 63,100 2.02%

1996 3,247,100 62,700 1.97%

1997 3,304,300 57,200 1.76%

1998 3,352,400 48,100 1.46%

1999 3,393,900 41,500 1.24%

2000 3,431,100 37,200 1.10%

2001 3,470,400 39,300 1.15%

2002 3,502,600 32,200 0.93%

2003 3,538,600 36,000 1.03%

2004 3,578,900 40,300 1.14%

2005 3,626,900 48,000 1.34%

2006 3,685,200 58,300 1.61%

2007 3,739,400 54,200 1.47%

2008 3,784,200 44,800 1.20%

2009 3,815,800 31,600 0.84%

2010 3,837,300 21,500 0.56%

2011 3,857,625 20,325 0.53%

2012 3,883,735 26,110 0.68%

2013 3,919,020 35,285 0.91%

2014 3,962,710 43,690 1.11%

2015 4,013,845 51,135 1.29%

2016 4,076,350 62,505 1.56%

2017 4,141,100 64,749 1.59%

2018 4,203,200 62,100 1.50%

2019 4,263,300 60,100 1.43%

2020 4,321,400 58,100 1.36%

2021 4,376,400 55,000 1.27%

2022 4,430,300 53,900 1.23%

2023 4,482,200 51,900 1.17%

2024 4,532,100 49,900 1.11%

2025 4,581,000 48,900 1.08%

2026 4,628,900 47,900 1.05%

Change from previous year

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Per

cent

Cha

nge

Pop

ulat

ion

Year

Oregon's Population and Annual Percent Change, 1950-2026

Forecast

Annual Percent Change

Total Population

Year

(July 1) Population Number Percent Population Number Percent Population Number Percent

--------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------

1980 199,525 --- --- 524,446 --- --- 329,407 --- ---

1990 209,638 10,113 5.07% 532,727 8,281 1.58% 268,134 -61,273 -18.60%

2000 223,207 13,569 6.47% 624,316 91,589 17.19% 330,328 62,194 23.20%

2001 224,645 1,438 0.64% 624,675 358 0.06% 336,660 6,333 1.92%

2002 225,084 439 0.20% 624,611 -64 -0.01% 340,778 4,118 1.22%

2003 226,652 1,568 0.70% 624,349 -262 -0.04% 345,266 4,487 1.32%

2004 228,353 1,701 0.75% 625,461 1,112 0.18% 349,138 3,873 1.12%

2005 230,008 1,655 0.72% 628,326 2,865 0.46% 351,076 1,938 0.55%

2006 231,882 1,874 0.81% 633,646 5,320 0.85% 354,328 3,252 0.93%

2007 236,160 4,278 1.85% 635,720 2,074 0.33% 356,311 1,983 0.56%

2008 239,340 3,180 1.35% 635,372 -348 -0.05% 358,967 2,656 0.75%

2009 239,929 589 0.25% 633,575 -1,797 -0.28% 360,134 1,166 0.32%

2010 238,457 -1,472 -0.61% 630,741 -2,835 -0.45% 359,764 -370 -0.10%

2011 236,180 -2,277 -0.95% 628,366 -2,375 -0.38% 360,675 911 0.25%

2012 232,875 -3,305 -1.40% 628,688 323 0.05% 362,580 1,904 0.53%

2013 230,143 -2,733 -1.17% 630,161 1,473 0.23% 365,925 3,346 0.92%

2014 229,365 -777 -0.34% 631,753 1,592 0.25% 368,525 2,600 0.71%

2015 229,607 242 0.11% 633,304 1,550 0.25% 370,167 1,642 0.45%

2016 231,240 1,632 0.71% 635,485 2,182 0.34% 370,880 712 0.19%

2017 233,416 2,176 0.94% 637,942 2,457 0.39% 372,830 1,950 0.53%

2018 235,064 1,648 0.71% 639,710 1,768 0.28% 374,802 1,973 0.53%

2019 236,315 1,251 0.53% 642,117 2,407 0.38% 376,362 1,560 0.42%

2020 237,485 1,170 0.50% 645,475 3,358 0.52% 376,400 38 0.01%

2021 239,011 1,525 0.64% 647,705 2,229 0.35% 376,371 -29 -0.01%

2022 240,543 1,532 0.64% 648,999 1,295 0.20% 376,998 627 0.17%

2023 241,655 1,112 0.46% 650,820 1,821 0.28% 377,970 972 0.26%

2024 242,266 612 0.25% 652,054 1,234 0.19% 378,935 965 0.26%

2025 242,756 490 0.20% 652,311 257 0.04% 380,226 1,291 0.34%

2026 243,191 435 0.18% 652,593 282 0.04% 381,631 1,405 0.37%

% Change from previous decade/yr.% Change from previous decade/yr.% Change from previous decade/yr.

66

Table C.7 Criminally At Risk

Population (males): Ages 15-39

Table C.8 Prime Wage

Earners: Ages 25-44

Table C.9 Older Wage

Earners: Ages 45-64

Table C.10 Elderly Population by Age Group

Year

(July 1) Population Number Percent Population Number Percent Population Number Percent

--------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------

1980 561,931 --- --- 790,750 --- --- 491,249 --- ---

1990 544,738 -17,193 -3.06% 926,326 135,576 17.15% 531,181 39,932 8.13%

2000 616,988 72,250 13.26% 996,500 70,174 7.58% 817,510 286,329 53.90%

2001 618,906 1,918 0.31% 994,587 -1,913 -0.19% 847,276 29,766 3.64%

2002 620,252 1,347 0.22% 989,996 -4,591 -0.46% 876,242 28,966 3.42%

2003 622,211 1,959 0.32% 987,755 -2,241 -0.23% 903,499 27,257 3.11%

2004 626,423 4,212 0.68% 988,932 1,177 0.12% 930,032 26,533 2.94%

2005 633,901 7,478 1.19% 994,575 5,644 0.57% 957,826 27,793 2.99%

2006 644,210 10,309 1.63% 1,004,110 9,535 0.96% 985,638 27,813 2.90%

2007 652,287 8,077 1.25% 1,014,565 10,455 1.04% 1,008,986 23,348 2.37%

2008 657,248 4,961 0.76% 1,022,060 7,495 0.74% 1,025,501 16,515 1.64%

2009 657,327 79 0.01% 1,024,971 2,911 0.28% 1,039,689 14,188 1.38%

2010 653,491 -3,836 -0.58% 1,026,126 1,155 0.11% 1,050,150 10,461 1.01%

2011 652,382 -1,109 -0.17% 1,030,430 4,304 0.42% 1,057,288 7,138 0.68%

2012 654,540 2,158 0.33% 1,037,116 6,686 0.65% 1,052,983 -4,305 -0.41%

2013 660,449 5,909 0.90% 1,047,277 10,162 0.98% 1,050,536 -2,447 -0.23%

2014 668,956 8,507 1.29% 1,059,961 12,683 1.21% 1,053,466 2,930 0.28%

2015 679,008 10,051 1.50% 1,074,881 14,920 1.41% 1,059,767 6,301 0.60%

2016 691,873 12,865 1.89% 1,097,009 22,128 2.06% 1,068,324 8,557 0.81%

2017 704,804 12,931 1.87% 1,123,392 26,383 2.41% 1,071,084 2,760 0.26%

2018 715,697 10,893 1.55% 1,150,720 27,327 2.43% 1,070,236 -849 -0.08%

2019 727,209 11,512 1.61% 1,177,450 26,731 2.32% 1,068,368 -1,868 -0.17%

2020 735,457 8,248 1.13% 1,201,088 23,638 2.01% 1,068,159 -209 -0.02%

2021 744,017 8,560 1.16% 1,223,939 22,851 1.90% 1,068,271 111 0.01%

2022 752,319 8,302 1.12% 1,245,904 21,965 1.79% 1,068,702 432 0.04%

2023 760,273 7,954 1.06% 1,264,282 18,378 1.48% 1,071,019 2,316 0.22%

2024 767,514 7,241 0.95% 1,283,727 19,445 1.54% 1,073,682 2,663 0.25%

2025 773,251 5,737 0.75% 1,298,968 15,241 1.19% 1,079,375 5,693 0.53%

2026 778,450 5,199 0.67% 1,314,425 15,457 1.19% 1,085,495 6,120 0.57%

% Change from previous decade/yr. % Change from previous decade/yr. % Change from previous decade/yr.

Year

(July 1) Ages 65+

%Change from

previous

decade/yr. Ages 65-74

%Change from

previous

decade/yr. Ages 75-84

%Change from

previous

decade/yr. Ages 85+

%Change from

previous

decade/yr.

--------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------

1980 305,841 --- 185,863 --- 91,137 --- 28,841 ---

1990 392,369 28.29% 224,772 20.93% 128,813 41.34% 38,784 34.48%

2000 439,239 11.95% 218,997 -2.57% 162,187 25.91% 58,055 49.69%

2001 442,558 0.76% 218,838 -0.07% 163,878 1.04% 59,843 3.08%

2002 445,890 0.75% 219,614 0.35% 165,109 0.75% 61,167 2.21%

2003 451,080 1.16% 222,361 1.25% 165,669 0.34% 63,050 3.08%

2004 456,984 1.31% 226,373 1.80% 165,842 0.10% 64,769 2.73%

2005 465,089 1.77% 231,926 2.45% 166,077 0.14% 67,087 3.58%

2006 475,596 2.26% 239,931 3.45% 165,787 -0.17% 69,877 4.16%

2007 487,657 2.54% 250,131 4.25% 165,148 -0.39% 72,379 3.58%

2008 502,959 3.14% 264,201 5.63% 164,354 -0.48% 74,403 2.80%

2009 517,502 2.89% 277,606 5.07% 163,513 -0.51% 76,383 2.66%

2010 532,062 2.81% 289,645 4.34% 164,159 0.40% 78,258 2.45%

2011 544,686 2.37% 300,402 3.71% 164,410 0.15% 79,874 2.06%

2012 569,493 4.55% 322,490 7.35% 165,727 0.80% 81,276 1.75%

2013 594,977 4.47% 344,125 6.71% 168,319 1.56% 82,533 1.55%

2014 619,639 4.15% 363,807 5.72% 172,422 2.44% 83,411 1.06%

2015 646,119 4.27% 384,842 5.78% 177,215 2.78% 84,062 0.78%

2016 673,412 4.22% 405,110 5.27% 183,137 3.34% 85,166 1.31%

2017 702,436 4.31% 425,637 5.07% 190,930 4.26% 85,869 0.83%

2018 732,668 4.30% 444,273 4.38% 202,112 5.86% 86,283 0.48%

2019 762,687 4.10% 462,624 4.13% 213,517 5.64% 86,546 0.31%

2020 792,792 3.95% 481,373 4.05% 223,812 4.82% 87,608 1.23%

2021 821,105 3.57% 499,222 3.71% 232,958 4.09% 88,924 1.50%

2022 849,154 3.42% 506,675 1.49% 251,807 8.09% 90,672 1.97%

2023 876,455 3.22% 513,636 1.37% 269,903 7.19% 92,917 2.48%

2024 901,436 2.85% 519,546 1.15% 285,937 5.94% 95,953 3.27%

2025 927,364 2.88% 525,345 1.12% 302,939 5.95% 99,080 3.26%

2026 951,567 2.61% 530,261 0.94% 318,608 5.17% 102,698 3.65%