Ore. economic forecast: More tax income now, but then...
SALEM, Ore. (AP) - The state of Oregon will see an influx of tax revenue from investments in the next few months, followed by a drop in future years as investors carry forward income to avoid potential tax increases, state economists said Friday.
The projection means the state should have about $87 million more to spend in the next two-year budget - a slight bump over the last projection - as lawmakers craft a new spending plan.
Still, the $16.6 billion in total anticipated revenue for the general fund and lottery is $700 million less than the estimated cost of continuing state services at current levels.
Economists expect capital gains taxes will be up 44 percent this year, and say corporate income tax collections also are coming in higher than projected.
State Economist Mark McMullen said it's now possible that those taxes will rise fast enough to trigger a tax provision known as the corporate kicker that would provide millions of dollars in tax rebates for corporations.
Oregon voters approved a ballot measure in November redirecting corporate kicker rebates to schools, but the measure wouldn't apply in this case because the initiative doesn't take effect until the next two-year budget period.
Economic growth is improving a bit but is still slower than typical economic recoveries, McMullen said.
Since Oregon doesn't have a military base or much defense industry, the state wouldn't be as seriously affected by automatic federal spending cuts set to take effect in March unless Congress cancels them, McMullen said.
The biggest risk to Oregon's budget would be a cut in federal funding for Medicaid, the health care plan for low-income Americans also known as the Oregon Health Plan.
"As long as Medicaid is off the table, it probably won't be catastrophic on the local level," McMullen said.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
Has anyone heard anything about PGE's proposed 9.1% rate hike? Apparently they found out that we have to much disposable income left over at the end of the month and they want it.
Economic growth is improving a bit...
We can look foward to more St^rbucks barista and food cart jobs.
@Mipsfer And strippers
They will revise this downward. Germany and France are slipping into a double dip recession that has already claimed the rest of the  EU.
http://www.reuters.com/article/2013/02/14/us-europe-economy-idUSBRE91D0CX20130214
This will affect the global economy.
@RalphCramden Nonsense. Just work hard and you'll be fine! Obama said so just the other day. You're not an unbeliever are you??
@AmiM
I am a numbers kind of guy. Economics is not a religion like 0bama would have us think.....8-}
@AmiM @RalphCramden that's the crap Republicans have been spewing since Reagan. Work hard and you'll succeed. No outside forces needed. And the EU is going into another recession due to austerity not taxes. They severely cut government spending and its destroying their economies.
@RalphCramden @Ramsesthegreat there is a very good time for cutting government spending. During the largest recession since 1929 isn't that time.
@Ramsesthegreat I love the "austerity" arguments. This tends to be more true in countries where the people are more dependent on government. The European systems are, in general, more socialistic, government centered. So reductions in government spending have a relatively greater impact on people who are more dependent on government to begin with.
@Ramsesthegreat Wow you really live in a bubble don't you...all the hard work in the world even working 24x7 does nothing unless somebody wants to buy what your doing.
@RamsesthegreatÂ
That's good. Cutting spending is what is destroying their economy.
It's that kind of thinking that will doom the US.
@Ramsesthegreat Lets not be politically correct..lets call it ..Depression.