The third quarter revenue forecast summary suggests Oregon is holding it’s own while the federal government makes adjustments. A weakness in labor-derived income is offset by upward revisions to equity and business components. In general, however, in the absence of the H.R. 1 adjustments the revenue forecast would be little changed if not for the kicker effect. General Fund revenues have been lowered $621.1 million relative to the forecast on which the Legislatively Adopted Budget was based - lower beginning balance, total available resources are down $845.5 million. The consequence is a reversal of the projected unspent balance for the biennium from $472.8 million to -$372.7 million. It should be noted that there are seven forecasts and a final accounting remaining in the biennium that will adjust forecasts. The summary explains:

”Oregon’s economic fortunes are increasingly bound by prevailing national trends. The silver lining of this connection is that while Oregon has underperformed national trends related to output and labor conditions of late, a slowing but still growing national economy should provide a lifeline to the state and thus avert a sustained contraction. Furthermore, robust financial market performance to date—despite slowing growth and tariff pressures—is set to support one of the most volatile sources of state revenue: capital gains taxes. As such, the latest translation of economic conditions into a revenue forecast does not change significantly—at least prior to adjustments related to the federal tax law changes in H.R. 1—as a cooler outlook for labor-generated income taxes is offset by firmer expectations related to capital gains.”

Governor Kotek’s interpretation is one in defense of bad policies that aren’t utilizing what the federal government is offering. Instead, millions are being spent to challenge authority and maintain bad policy. She states, “More Oregon families are experiencing tougher financial situations — not by chance, but because of the economic uncertainty coming straight from the Trump Administration. From reckless choices on trade to broken promises on getting control of prices, working families are falling further behind. With President Trump and Congressional Republicans cutting fifteen billion dollars from essential services over the next six years, and being responsible for reducing state funding right now by an additional $888 million, the damage is here.”

However, the forecast summary actually discredits the Governor’s claim, “Major sources of uncertainty pertaining to tariffs, federal fiscal policy and tax reforms have been resolved, or at least diminished, during the summer months. This alone should remove a significant damper off hiring, investment and production.”

“Forecasters project improving outcomes for 2026 and 2027 supported by tax cuts, (mostly) stable tariffs and lower interest rates, but flagging growth over the next few quarters increases the risk of destabilizing labor market and overall business conditions.” The Governors response to a promising national forecast is to keep Oregon bound in the past to policies that are not working even with huge tax increases. “While D.C. plays politics, I will stay focused on doing what we need to do to stay ahead…. All of us need to be nimble and look for ways to make our state dollars go further when delivering for Oregonians. I believe in the resilience of our state and our ability to work together to take care of each other.”

The Forecast Summary states: “At the state level, conditions have deteriorated to a greater degree: growth has consistently underperformed the national economy, the unemployment rate has risen by nearly a full percentage point, and perhaps most alarming, recent revisions show sharply deteriorating employment conditions across a broad array of industries. The most severe declines in employment have occurred in the manufacturing, construction, financial activities, wholesale trade, private education and information sectors. The broader state economy is likely to avoid recession so long as the national economy holds up, but if the state-level employment declines—should they persist through the second half of the year— warrant attention as potential warning flags of sector-specific recessions.”

A D V E R T I S E M E N T

A D V E R T I S E M E N T

Senate President Rob Wagner (D-Lake Oswego) followed Kotek’s lead, but was basically a plug for the Special Session: “It is now increasingly clear — on top of tariffs and economic uncertainty, the Trump administration’s signature piece of legislation will hurt everyday Oregonians and harm the state’s ability to provide needed public services. There is a lot of work ahead of us. We need to pull together to invest in Oregon’s infrastructure and economy, continue to support vital public services, and protect Oregonians from the chaos of the federal administration.”

Senate Majority Leader Kayse Jama (D–East Portland, Damascus, Boring) centered her remarks around President Trump: “Today Oregonians have the clearest measure yet of the harm to our state brought by President Trump’s budget bill and unstable economic policies: they will end up costing Oregon more than $800 million over two years. We know Trump's tariffs continue to drive inflation—raising costs of everyday goods and threatening good-paying jobs—while tax breaks go to billionaires, funded by cutting access to food and health care for Oregon's struggling families. Oregon Senate Democrats will move forward ready to confront the budget challenges ahead under this vast disinvestment by the president and his enablers in Congress.”

The Federal Reserve Bank reports that 31 states are expected to gain real income from the effect of tariffs, with some seeing increases as high as 1.7%. The remaining 19 states could experience losses exceeding 2%. These disparities arise from differences in each state’s reliance on trade, sectoral employment, and exposure to tariff-affected supply chains. States dependent on agriculture or services—sectors projected to lose employment and output—may face greater economic strain. However, H.R. 1 rescinds IRA unobligated funding programs and adds them to the USDA budget baseline, outlaws climate goals for agriculture, and lifts caps on households that rely on 75% from agriculture. This can depend on how well a state can shift enough to stateside markets as foreign markets move stateside.

Blaming the Big Beautiful Bill that was just passed for a forecast based on passed production is a shift on focus. Reduction in the Medicaid and SNAP payments aligns, at least in part, to criminal users, which the state will benefit from if they are off the benefit list. There are other benefits that Oregon refuses to us, such as energy development on Federal lands. States with significant federal land holdings see changes in energy policy, including expanded oil, gas, and coal leasing on federal lands, and reduced fees for renewable energy projects.

What are Oregon Democrats doing? They increased SNAP use for noncitizens, pay for attorney fees for noncitizens, restricts farming practices, and puts regulations on agricultural farming. Every press release exposes their goal to oppose the Trump Administration regardless of public opinion or the greater good for the state.


--Donna Bleiler

Post Date: 2025-08-27 23:18:28

Last Update: 2025-08-27 23:52:41