Oregon Economic and Revenue Forecast, March 2017
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March 2017 Economic & Revenue Outlook February 22 nd , 2017 Oregon Office of Economic Analysis Mark McMullen Josh Lehner
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Transcript of Oregon Economic and Revenue Forecast, March 2017
March 2017 Economic & Revenue Outlook
February 22nd, 2017 Oregon Office of Economic Analysis
Mark McMullen
Josh Lehner
Economic Update and Outlook
Oregon Office of
Economic Analysis3
Good News: Better Manufacturing Data
Oregon Office of
Economic Analysis4
The Slowdown Is Here
Oregon Office of
Economic Analysis5
Truly Statewide Growth
Oregon Office of
Economic Analysis6
•Fiscal PolicyGeneral Impact Larger OR ImpactTaxes Trade WarsInfrastructure ACADeregulation Federal LandsImmigration
•Monetary Policy•Rising Interest Rates
Risk: Federal Policy
Oregon Office of
Economic Analysis7
Risk: International Migration
Oregon Office of
Economic Analysis8
Risk: Global Supply Chains
Oregon Office of
Economic Analysis9
Risk: Medicaid Expansion
Oregon Office of
Economic Analysis10
Risk: Federal Lands
Oregon Office of
Economic Analysis11
Economic Outlook
Revenue Update and Outlook
Oregon Office of
Economic Analysis13
Personal Income Taxes Remain Healthy
2
3
4
5
6
7
8
9
10
11
12
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Personal Income Taxes Shrug Off the Kicker
Personal Income Taxes, $ billions, 4 QTR Sum
May 2015 Forecast
March 2017 Forecast
Forecast ->
Oregon Office of
Economic Analysis14
Corporate Taxes Improve in Recent Months
100
200
300
400
500
600
700
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Corporate Taxes Are Expected to Stabilize
Corporate Excise Taxes, $ millions, 4 QTR Sum
May 2015 Forecast
March 2017 Forecast
Forecast ->
Oregon Office of
Economic Analysis15
IT System Replacement Is Going Well, Why Do You Ask?
Oregon Office of
Economic Analysis16
Final 2015 Tax Return Data
16
-15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Dividends
Interest
Pensions
Total Income
Wages
Tax After Credits
IRAs
Social Security
Business
Cap Gains
Schedule E
Matched Returns, Full Year Filers, % change
2015 2014 2013
Oregon Office of
Economic Analysis17
Tea Leaves: Looking Forward to April
17
Oregon Office of
Economic Analysis18
Estate Tax Issues, Again
Oregon Office of
Economic Analysis19
Follow-Up on Vice Taxes
Marijuana
Unit 2016q1 Avg Price Name Brand Generic Name Brand Generic
Unit Price $8.76 / gram $6.55 / pack $4.40 / pack $6.85 / can $5.35 / can
Taxes $1.49 - $1.75 $2.33 $2.33 $1.87 $1.87
Federal $0.00 $1.01 $1.01 $0.09 $0.09
State $1.49 $1.32 $1.32 $1.78 $1.78
Local $0 - $0.26 $0 $0 $0 $0
Effective Tax Rate 17-20% 56% 115% 38% 54%
Marijuana (25%)
Total $60.1
General Fund $0
Moist SnuffCigarettes
Oregon Effective Vice Tax Rates, A Stylized Example
State Revenues, CY 2016 (millions)
$31.9
$59.2
$34.8
$208.9
Other Tobacco ProductsCigarettes
Forecast Changes
Oregon Office of
Economic Analysis21
General Fund Forecast Summary
(Millions)
2015 COS
Forecast
December 2016
Forecast
March 2017
Forecast
Change from
Prior Forecast
Change from
COS Forecast
Structural Revenues
Personal Income Tax $15,713.5 $15,678.4 $15,709.8 $31.4 -$3.6
Corporate Income Tax $1,100.0 $1,103.7 $1,136.2 $32.5 $36.2
All Other Revenues $1,184.6 $1,225.7 $1,264.6 $39.0 $80.0
Gross GF Revenues $17,998.1 $18,007.7 $18,110.6 $102.9 $112.5
Offsets and Transfers -$42.8 -$44.2 -$44.4 -$0.2 -$1.6
Administrative Actions1 -$20.2 -$14.0 -$14.0 $0.0 $6.2
Legislative Actions -$158.9 -$158.3 -$158.3 $0.0 $0.6
Net Available Resources $18,309.1 $18,320.0 $18,422.7 $102.7 $113.6
Confidence Intervals
67% Confidence +/- 1.6% $290.1
95% Confidence +/- 3.2% $580.3
2015-17 General Fund Forecast Summary
$17.82B to $18.40B
$17.53B to $18.69B
Table R.1
Positive Factor
Negative Factor
Personal Income Taxes
Court Fines,Fees & Assessments
Corporate Excise Taxes
VideoLottery
Estate Taxes
Liquor
Oregon Office of
Economic Analysis22
Forecast ChangesDifference from December Forecast, $ millions
2222
102.6 92.6117.5
97.8
266.4
-$50
$0
$50
$100
$150
$200
$250
$300
2015-17 2017-19 2019-21 2021-23 2023-25
Personal Corporate Lottery Other Total
Oregon Office of
Economic Analysis23
Biennial Revenue Growth
2323
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Personal Income Taxes Total Net Revenue
Oregon Office of
Economic Analysis24
Reserves
Effective Reserves ($ millions)
Jan
2017
End
2015-17
ESF $356.7 $383.2
RDF $374.4 $388.1
Reserves $731.1 $771.2
Ending
Balance $348.1 $348.1
Total $1,079.2 $1,119.3
% of GF 6.0% 6.2%
0%
2%
4%
6%
8%
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
99-01BN
01-03BN
03-05BN
05-07BN
07-09BN
09-11BN
11-13BN
13-15BN
15-17BN
17-19BN
Oregon Budgetary Reserves (billions)Gen. Fund Ending Balance Educ. Stability Fund Rainy Day Fund
Forecast -->
Percent ofGeneral Fund -->
Source: Oregon Office of Economic Analysis
Oregon Office of
Economic Analysis25
Contact
(503) 378-3455
(503) 378-4052
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
