Revenue
Legislative Report - Week of December 1
Revenue Team
Coordinator: Peggy Lynch
Please see Governance Overview here.
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Revenue Updates
Revenue Updates
By Peggy Lynch
On Nov. 19, legislators received the latest Revenue Forecast. (An in-depth version is here.) Oregonlive covered the forecast helpfully. They provide an in-depth Revenue Outlook. The Oregon Capital Insider also provided a good article. However, we still have two economies: One for the wealthy and one for low-income Oregonians—the “k” economy. A Nov. 24th Salem Reporter story provides more insights. Here is the Office of Economic Analysis (OEA) website.
With concern about not only this biennium, but the next two biennia forecasted as less than needed to provide Oregonians with the services they need, the Oregon Revenue Coalition has revived. The League has participated in the past and is attending weekly meetings. For now, it is an informal group with a focus on addressing the revenue needed for services to Oregonians. We have signed on to a one-pager created by the “Protect Oregon Now” group—part of the Revenue Coalition.
H.R. 1, the federal “reconciliation” bill, was signed by the President on July 4th, just a few days AFTER Oregon’s legislative session adjourned. Because Oregon currently “connects” to the federal tax system, the tax reductions in H.R. 1 will also reduce revenue for Oregon. A disconnect bill (HB 2092) passed the Oregon House in 2025, but was not taken up in the Senate. The new Revenue Coalition and legislators are having conversations around options to increase revenue, including targeting disconnect provisions and other ideas that may be politically easier than a full disconnect. One of our partners, the Oregon Center for Public Policy, provides a YouTube video to help explain. The Legislature COULD delay the April 15 filing date should they decide to address the disconnect in the 2026 session. They have taken that action in the past.
At a mtg. on Oct. 9 with the Oregon Dept. of Agriculture, League learned that agencies are being asked to provide a 5% cuts list by each fund type....so 5% General Fund (GF), 5% Lottery Funds (LF), 5% Other Funds (OF)!!! And in 2.5% increments. The 1% the Gov asked for earlier can be counted as part of that 5% number. And they are to provide a list of NEW PROGRAMS created/funded from 2025. During an OWEB mtg. on Oct. 17, we learned the New Programs list each agency is to provide are ones created from July 2021 forward. So not just the last couple of years. The Legislative Fiscal Office (LFO) is looking to see any nexus to Covid/federal programs that were created with one-time money, for instance. Some of these programs were already not funded in 2025.
Oregon’s Full Ways and Means Co-Chairs have written an opinion piece about the challenges facing Oregon. The League will need to be actively engaged in helping solve these problems. See other sections of the Legislative Report about the cuts in each area and what’s being considered to address the revenue shortfall.
A March 5, 2025 report by the Common Sense Institute, including former state economist Mark McMullen, provides interesting statistics on Oregon budget since 2001. As Oregon has reduced its reliance on the General Fund (income taxes), both Federal and Other Funds have grown.
Yes, in spite of the revenue shortfall, Oregon still has the “kicker”. Here’s what you can expect. Remember that you can donate the kicker on your 2024 Oregon tax return.
On Nov. 13, Multnomah County provided an economic forecast reported by Willamette Week.
On Nov. 17, the Senate Finance & Revenue Committee received an Overview of Wealth Transfer Taxes: Estate, Inheritance and Gift. Review of Past Legislative Discussions on Tax Reform: Meeting Materials Video of meeting
Learn more about Oregon’s Reserve Funds in an article by the Oregon Capital Chronicle. Oregon is better suited to address a significant downturn in the economy than the last major downturn because of Oregon’s Rainy Day and Education Stability Funds. But there are criteria that must be addressed in order to access those funds.