Oregon lawmakers received some good news as state economists predicted an additional $350 million in funding for the new two-year budget. Despite concerns over federal funding and potential trade wars, strong wage growth in Oregon has boosted tax revenue projections for the coming years.
The quarterly economic and revenue forecasts released on Wednesday indicated an increase of about $550 million in tax revenue for the 2025-27 budget cycle. However, inflation issues and the impact of potential federal layoffs and tariffs pose uncertainties for the future economic outlook of the state.
Governor Tina Kotek emphasized the importance of focusing on core services in the budget, while House Speaker Julie Fahey expressed concerns over the Trump administration’s trade policies affecting Oregon’s economy. On the other hand, Republicans highlighted the need to address Oregon’s business climate, expressing hope that tariffs could bring manufacturing jobs back to the U.S.
The forecast also included a slight reduction in the anticipated “kicker” refund for taxpayers next year. Chief Economist Carl Riccadonna, who replaced Mark McMullen in September, cautioned that economic predictions have become more challenging under the current administration, but stressed the need for cautious budgetary decisions in light of federal uncertainties.
The forecast delivered on Wednesday serves as a precursor to the May report that lawmakers will use to determine the next two-year budget. With federal funding uncertainties looming, the focus remains on addressing the most pressing needs of Oregonians across the state.
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