Forecast indicates revenue decrease
From our weekly issue dated September 02, 2009
Reactions to the state government’s most recent revenue forecast, showing a not-too-bright picture, were mixed among Oregon politicians, and split largely along party lines when the estimate was released Thursday, Aug. 27, by Tom Potiowsky, Oregon state economist.
Projected general fund revenue for the 2009-10 fiscal year is down $139 million from the forecast provided to lawmakers at the end of June, when the legislative session in Salem adjourned. That figure is due mostly to a $132 million decline in personal income tax revenue.
The state’s general fund and lottery resources are down $182 million from late June estimates. It is projected that lottery resources for the 2009-11 biennium are down $43.1 million from the June revenue forecast.
Oregon Senate Minority Leader Ted Ferrioli (R-John Day) reacted to the forecast in an Aug. 27 press release.
“This revenue forecast should be a wake-up call,” Ferrioli said.
He took the opportunity to blast Oregon Democrats for their handling of the economy. Democrats have supermajorities in the House and Senate, and Gov. Kulongoski belongs to that party.
“The decline in Oregon employment reflects the current direction of public policy which is hostile to small business and investors,” Ferrioli said. “Employment in Oregon will not recover until state government sends a message to entrepreneurs, investors and existing small business owners that their investment in growth will be welcomed, rewarded and appreciated.”
But Kulongoski expressed cautious optimism in an Aug. 27 press release issued by his office.
“Because of legislative leadership and the federal American Recovery & Reinvestment Act, we are able to make continued investments in public works projects, such as transportation and other public building construction, as well as in the expansion of health care and continued investments in Oregon’s green energy sector-all key to job growth and economic recovery,” the governor said.
Oregon’s unemployment rate dropped from 12 percent to 11.9 percent between June and July. At one point, the state was second in the nation in unemployment. It is now tied for fourth with California, Michigan, Rhode Island and Nevada leading the nation.
The national rate dropped slightly in July, from 9.5 to 9.4 percent.
Josephine County’s seasonally adjusted unemployment rate dropped from 15.1 percent to 14.9 percent during that time. Neighboring Jackson County went from 13.5 percent to 13.2 percent.
According to figures released by the Oregon Employment Dept. (OED), Josephine County payroll employment fell by 550 jobs during July, “mostly due to seasonal reductions in local government education.”
Throughout the last year, the county lost approximately 1,130 payroll jobs, a 4.5 percent decrease. The county has lost 450 manufacturing jobs in that time, 110 of which were in the wood products industry.
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Health care and social assistance employment fell by 20 jobs in July, and is down by 30 jobs throughout the last year. Private sector educational services lost 30 jobs during July.
During the past 12 months the number of construction jobs in the county dipped by 170, retail trade was down 220 and wholesale trade shed 60 positions.
A slight rise in the leisure-and-hospitality sector was noted in the OED report for July. That sector added approximately 150 jobs that month, but has lost 140 throughout the past year.
However, there were some bright spots indicated in the report. Wood product manufacturing gained 20 jobs in July, and the transportation, warehousing and utilities sectors have gained 40 jobs since July 2008.
Nursing and residential-care facilities added 50 jobs, and local government gained 60, with one-third of those positions in local education.
In an Aug. 27 press release, Oregon House Republican Leader Bruce Hanna (R-Roseburg) noted that the revenue forecast “revealed that Oregon ranks 47th in the nation in job growth over the past year.”
Hanna stated that a series of tax increases passed by the Legislature will hamper further economic growth and slow the state’s recovery.
“The greatest risks to our economy and state budget are the $733 million in income and corporate tax increases passed this year,” Hanna said.
“These permanent, job-killing tax increases will hurt small businesses and make Oregon even less competitive.”
Kulongoski took the opposite track, and said that efforts to refer the tax increases to voters may ultimately threaten the state’s bottom line.
Opined the governor, “While our budget remains balanced today, the potential for ballot measures during a special election in January puts that in greater jeopardy, creating a significant hole in the state budget that would result in serious cuts to education, public safety and human services.
“We must continue to work together to manage this recession and slow growth period so Oregon is prepared for strong growth when an economic rebound occurs.”
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