State economists informed lawmakers on Wednesday that Oregon’s income tax and other revenues are continuing to exceed expectations. Lottery and general fund revenues are projected to surpass a previous prediction by $183.4 million.
This means that the state’s revenue expectations could come in at $670 million higher than what economists projected last year as lawmakers sought to finalize the roughly $24 billion general fund and lottery budget.
WHY THE UPTICK: Economists cite a surge in estate taxes as one reason for the uptick in revenue growth. More residents are leaving behind estates valued around $5 million when they die. But this trend doesn’t account for all of the growth. Increased revenue from lottery and marijuana taxes are also a factor.
Due to the weakening trends of other economic indicators such as job growth and in-migration, some experts are surprised by this bump in revenue growth. It is yet to be seen whether the windfalls are associated with a long-term trend in tax revenues or a short-term shift in response to President Trump’s 2017 federal tax overhaul.
HOW TO USE THE DOLLARS: As the money rolls in, questions about what to do with it are on Oregon lawmakers’ minds. House Speaker Tina Kotek, D-Portland, has emphasized the importance of directing some of the funds toward providing aid to unsheltered Oregonians who are bearing the brunt of a statewide housing crisis.
In her response to the forecasted revenue growth, Gov. Kate Brown cited a need for responsible investments in wildfire mitigation, earthquake resiliency, and addressing homelessness.
By J.D. Brookbank