Oregon’s Chief Economist, Carl Riccadonna, reported that despite chaotic federal announcements regarding taxes, tariffs, and spending cuts, Oregon’s economic forecast remains relatively stable. Lawmakers can anticipate having about $38.2 billion to spend in the state’s next budget cycle, which is $350 million more than previously anticipated. However, Governor Tina Kotek and legislative budget-writers are urging caution in light of potential economic challenges created by the federal administration’s actions.
House Speaker Julie Fahey emphasized the need for responsible budgeting in order to prepare for potential economic headwinds. Riccadonna pointed out that tariffs implemented by President Trump could have a significant impact on Oregon’s economy, given the state’s reliance on manufacturing and trade, particularly with Asia. He mentioned that while tariffs slowed down Oregon’s economy in the past, the Tax Cuts and Jobs Act softened the blow.
The $350 million increase in available funds for the next budget cycle is partly attributed to higher income tax revenues, although some funds were lost due to state spending on wildfire costs and tax refunds. Riccadonna’s efforts as chief economist have been focused on creating more accurate forecasts to reduce kicker payouts, with a significant kicker of $1.726 billion expected in 2026.
Lawmakers will base their budget decisions for the next two years on the upcoming economic forecast, expected in late April. Overall, Oregonians are advised to be prepared for potential economic challenges and cuts to federal programs that the state relies on, such as Medicaid.
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