Oregon Economic and Revenue Forecast, March 2016
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OFFICE OF ECONOMIC ANALYSIS Economic and Revenue Outlook: March 2016 February 10 th , 2016 Oregon Office of Economic Analysis Mark McMullen Josh Lehner
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Transcript of Oregon Economic and Revenue Forecast, March 2016
OFFICE OF ECONOMIC ANALYSIS
Economic and Revenue Outlook:March 2016
February 10th, 2016 Oregon Office of Economic Analysis
Mark McMullen
Josh Lehner
OFFICE OF ECONOMIC ANALYSIS
Recent Performance
2
OFFICE OF ECONOMIC ANALYSIS
U.S. Economy Still in Expansion
3
OFFICE OF ECONOMIC ANALYSIS
Best Leading Indicator
4
OFFICE OF ECONOMIC ANALYSIS
Industrial Production is Weak
Date # Neg.
Nov ’74 17
May ’80 14
Dec ’81 16
Feb ’91 17
Apr ’01 15
Jul ’08 15
Dec ’15 7
5
OFFICE OF ECONOMIC ANALYSIS
Oregon: Not Immune to Global Issues
6
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Oregon’s Labor Market
7
OFFICE OF ECONOMIC ANALYSIS
Traditional Advantage Regained
8
OFFICE OF ECONOMIC ANALYSIS
Most Regions Full Throttle
9
OFFICE OF ECONOMIC ANALYSIS
Translates into Stronger Income GainsWage Gains Broad Based, Not Due to Composition Effects
10
OFFICE OF ECONOMIC ANALYSIS
Participation: Mostly Structural
11
OFFICE OF ECONOMIC ANALYSIS
Businesses Casting Wider Net
12
OFFICE OF ECONOMIC ANALYSIS
Economic Outlook
13
OFFICE OF ECONOMIC ANALYSIS
Revenue Trends
14
OFFICE OF ECONOMIC ANALYSIS
Personal Income Tax Collections Remain Healthy
15
OFFICE OF ECONOMIC ANALYSIS
Corporate Taxes Turn Down
16
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net Corporate Taxes ($ Mil, 12 month sum)
OFFICE OF ECONOMIC ANALYSIS
Herein Lies the Problem
17
0
5,000
10,000
15,000
20,000
25,000
30,000
0
2
4
6
8
10
12
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
Stock Prices and Oregon Taxable Capital Gains
March 2016 Wilshire 5000 Stock PriceForecast (Right)
Dec 2015 Wilshire 5000 Stock PriceForecast (Right)
March 2016 Cap Gains Forecast ($ bil)
Dec 2015 Cap Gains Forecast ($ bil)
OFFICE OF ECONOMIC ANALYSIS
Here Comes April
18
Tax Year
Dec-Jan
Estimated
Payments
($ mil) % change
Non-Labor
Income*
(% change)
Q2 Final PIT
Payments
(% change)
2008 268 -28.4% -35.4% -45.4%
2009 227 -15.2% -22.2% -2.8%
2010 253 11.5% 10.9% 17.9%
2011 268 5.6% 0.9% 3.3%
2012 345 28.8% 36.0% 25.1%
2013 346 0.5% -5.2% -7.0%
2014 416 20.0% 23.4% 15.9%
2015 455 9.4% 12.2% 8.5%
Forecast
OFFICE OF ECONOMIC ANALYSIS
Jackpot!
190
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
PB_SALESOregon Weekly Powerball Sales
OFFICE OF ECONOMIC ANALYSIS
Surprising Cigarette Sales
20
OFFICE OF ECONOMIC ANALYSIS
Revenue Outlook
21
OFFICE OF ECONOMIC ANALYSIS
2015-17 Forecast Evolution
22
$17.6
$17.8
$18.0
$18.2
$18.4
$18.6
$18.8
$19.0
$19.2
$19.4
$19.6
$19.8
Dec '10 May 13 Mar '16
Bill
ion
s
2015-17 General and Lottery Fund ResourcesEvolution by Forecast Release Date
Forecast Including Tax Law Changes at Close of Session
OFFICE OF ECONOMIC ANALYSIS
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March 2016 General Fund Forecast Summary
Positive
Factor
Negative
Factor
Lottery
Sales
Personal
Income
Taxes
Estate
Taxes
Liquor
Criminal
Fines
Court Fees
Spending
Adjustments
(Millions)
2015 COS
Forecast
December 2015
Forecast
March 2016
Forecast
Change from
Prior Forecast
Change from
COS Forecast
Structural Revenues
Personal Income Tax $15,713.5 $15,712.4 $15,692.1 -$20.3 -$21.4
Corporate Income Tax $1,100.0 $1,134.7 $1,134.3 -$0.4 $34.3
All Other Revenues $1,184.6 $1,182.0 $1,179.9 -$2.1 -$4.7
Gross GF Revenues $17,998.1 $18,029.1 $18,006.3 -$22.8 $8.3
Offsets and Transfers -$42.8 -$43.0 -$43.2 -$0.2 -$0.4
Administrative Actions1 -$20.2 -$20.2 -$14.0 $6.2 $6.2
Legislative Actions -$158.9 -$158.9 -$158.3 $0.6 $0.6
Net Available Resources $18,309.1 $18,283.6 $18,319.6 $36.0 $10.5
Confidence Intervals
67% Confidence +/- 6.4% $1,144.9
95% Confidence +/- 12.7% $2,289.8
1 Reflects cost of cashflow management actions, ex clusiv e of internal borrow ing.
2015-17 General Fund Forecast Summary
$16.86B to $19.15B
$15.72B to $20.30B
Table R.1
Full Impact:$36.0 Net IncreaseLess $16.0 Additional SpendingPlus $24.8 Lottery Funds
OFFICE OF ECONOMIC ANALYSIS
2424
Forecast ChangesDifference from December Forecast, $ millions
1.8
-165.7-152.0
-4.7
27.6
-$200
-$150
-$100
-$50
$0
$50
$100
2015-17 2017-19 2019-21 2021-23 2023-25
Personal Corporate Lottery Other Total
OFFICE OF ECONOMIC ANALYSIS
25
Reserves
Effective Reserves ($ millions)
Feb
2016
End
2015-17
ESF $257.5 $375.5
RDF $212.4 $386.5
Reserves $469.9 $762.1
Ending
Balance $319.0 $319.0
Total $788.9 $1,081.0
% of GF 4.4% 6.0%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
OFFICE OF ECONOMIC ANALYSIS
2626
Biennial Revenue Growth
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Personal Income Taxes Total General Fund
OFFICE OF ECONOMIC ANALYSIS
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For More Information
Standard Contact:
155 Cottage Street NE
Salem, OR 97301
(503) 378-3405
www.oregon.gov/das/oea
Social Media:
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
