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7/30/2019 May 2013 Oregon Economic and Revenue Forecast Presentation
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OregonMay 2013 Economic & Revenue
OutlookMark McMullen & Josh Lehner
Office of Economic AnalysisMay 16, 2013
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OregonU.S. Economy
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Businesses Are StillProfitable
3
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
1959Q3 1964Q3 1969Q3 1974Q3 1979Q3 1984Q3 1989Q3 1994Q3 1999Q3 2004Q3 2009Q3
Corporate Profits After Taxes, % share of GDP
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and Still Sitting on Cash
4
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
1960Q1 1970Q1 1980Q1 1990Q1 2000Q1 2010Q1
Trillions
Nonfinancial Corporate Businesses, Real Liquid Assets
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Households Gaining Wealth
5
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Household Assets ($ Billions)
All Other
Real Estate
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And Lowering Liabilities
6
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Household Liabilities ($ Billions)
Mortgage
All Other
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OregonOregon: Recent Performance
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Slow and Steady: Oregons
Coincident Indicators
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Long-Term UnemploymentRemains Elevated
9
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Labor Force Participation: WillWorkers Return?
62.0
63.0
64.0
65.0
66.0
67.0
68.0
69.0
70.0
Oregon Labor Force Participation Rate [Seasonally Adjusted]
Jan 2005Jan 2011
Source: Oregon Employment Department
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OregonIndustries
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Drags on Economic GrowthAre Easing
12
-5
-4
-3
-2
-1
0
1
2
3
4
-50
-40
-30
-20
-10
0
10
20
30
40
2000 2005 2010 2015
Annual Percent Changes in Oregon
Oregon Housing Starts Oregon State and Local Government Employment (Right)
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OregonOregon: Regional Trends
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Recovery Spreading to RuralAreas
14
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Jan-11 Jul-11 Jan-12 Jul-12
Regional Employment GrowthShare of Overall Gains
South CoastSE Oregon
Gorge
North Coast
NE Oregon
C Oregon
S Oregon
Valley
Portland MSA
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Household Debt AcrossOregon
15
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Debt to Income RatioAuto, Credit Card, Mortgage Only
Oregon U.S.
0 0.5 1 1.5
DeschutesCrook
Hood RiverJeffersonJackson
Washington
JosephineUSYamhillOregon
ClackamasBenton
LanePolk
MarionKlamath
MultnomahUmatilla
MalheurBaker
LinnDouglas
WascoColumbia
CurryCoos
ClatsopTillamook
Lincoln
Union
Debt to Income RatioAuto, Credit Card, Mortgage Only2007 2011
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Demographics Weigh on RuralAreas (Share of Population by Age)
16
OregonTotal
SouthernCoast
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OregonOutlook & Risks
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1,200,000
1,250,000
1,300,000
1,350,000
1,400,000
1,450,000
1,500,000
1,550,000
2000Q1 2003Q1 2006Q1 2009Q1 2012Q1 2015Q1
Oregon Private Sector Employment
Bottom Line: Still Some Acceleration
18
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Stable Outlook, Yet Shifting Risks
0
25
50
75
100
2.00
2.25
2.50
2.75
3.00
Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13
Upside Risks, Share of Total 2013 GDP Growth (Left)
Source: Wall Street Journal Economic Forecasting Survey
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OregonRevenue Outlook
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Those Who Cannot
Remember the Past..
Job LossesBegin
Forecast Date(Around 5
years later)
PITGrowth
Forecast
ActualGrowth(Net ofKicker)
PIT Kicker($ mil)
Dec 1979 May 1985 -2.2% 10.9% $221
Aug 1990 May 1995 9.9% 16.6% $432
Dec 2000 May 2005 12.6% 22.6% $1,071
Dec 2007 May 2013 11.4% ??? ???
BI1985-87 includes a personal income tax rate cut
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22
Healthy Growth in PersonalIncome Taxes
-5%
0%
5%
10%
15%
Jul Aug Sep Oct Nov Dec Jan
2012
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2013
Feb Mar Apr
Recent Personal Income Tax Collections% change over year ago, 3 month moving sum
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Boom in Investment Income(Income Growth 2011-2012: Early Matched Tax Returns)
18%
7%
34%
17%
74%
17%
10%
4%
3%
13%
6%
33%
7%
-21%
-40% -20% 0% 20% 40% 60% 80%
Total Income
Wages
Dividends, Interest & Rent
Retirement
Capital Gains
Business Income
Unemployment
Income Growth 2011-2012: Early Matching Tax Returns
Impacted by M66
All Other
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24
PIT Collections Over the HomeStretch
400
500
600
700
800
900
1,000
1,100
1,200
1,300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F Kicker
Personal Income Tax Revenues Received May 15-June 30($millions)
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25
Personal Income Tax KickerWould Be a Misnomer
87%
6%7%
-$41m
+$20m
+$237m
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
PIT Corp Other PIT Corp Other
2011-13 General Fund Revenues
Share of General Fund Forecast Changes from COS
Other forecast changesinclude:
Court Fees +$51mOne-time Transfers +$131mLiquor +$41m
C t T G th
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26
Corporate Taxes: GrowthStopped in April
-40%
-20%
0%
20%
40%
60%
80%
Jul Aug Sep Oct Nov Dec Jan
2012
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2013
Feb Mar Apr
Corporate Excise Tax Collections
% change over year ago, 3 month moving sum
C t T Ki k I i th
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27
Corporate Tax Kicker Is in theBaseline--but Is not a Sure Thing
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F Kicker
Corporate Tax Revenues Received May 15-June 30 ($millions)$20.3
million
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2828
Forecast ChangesDifference from March forecast, $ millions
128.7 155.4
69.9
42.6 36.5
-$100
-$50
$0
$50
$100
$150
$200
2011-13 2013-15 2015-17 2017-19 2019-21
Personal Corporate Lottery Other Total
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29
May 2013 Forecast Summary
Mar ' 13
Forecast
May ' 13
Forecast Change
Mar ' 13
Forecast
May ' 13
Forecast Change
Taxes
Personal Income Taxes 12,044.9 12,152.7 107.8 13,452.7 13,579.5 126.8
Corporate Income Taxes 898.3 914.6 16.3 1,026.8 1,036.6 9.7
Other Taxes (Estate, Insurance, Tobacco) 443.3 441.6 (1.7) 445.4 446.3 0.9
Fines and Fees 279.6 285.5 5.9 258.8 270.9 12.1
All Other (Liquor, Interest, Misc, One-Time) 456.2 454.1 (2.1) 261.7 273.3 11.6
Offsets & Transfers (12.0) (12.0) 0.0 (101.5) (120.8) (19.3)
Net General Fund Revenues 14,110.3 14,236.5 126.3 15,343.8 15,485.7 141.8
Plus Beginning Balance 0.0 0.0 0.0 382.1 497.2 115.1
Less Anticipated Administrative Actions* (4.4) (4.4) 0.0 (18.2) (18.2) 0.0
Legislatively Adopted Actions (137.2) (137.3) (0.1)
Available Res ources 14,105.9 14,232.1 126.3 15,570.4 15,827.3 256.8
Projected Expenditures 13,723.8 13,734.9 11.2
Estimated Ending Balance 382.1 497.2 115.1
Lottery Available Res ources 1,079.7 1,082.1 2.4 1,045.0 1,059.6 14.6
Total Available Resources (GF + Lottery) 15,185.5 15,314.2 128.7 16,615.4 16,886.9 271.5
Excluding beginning balance: 156.4
2015-17 BN 2017-19 BN 2019-21 BN
Total Available Resources (GF + Lottery) 74.1 44.8 36.4
2011-13 BN 2013-15 BN
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3030
Saving the Best for LastForecast Evolution, Dec 2010 to May 2013
$14.5
$14.6
$14.7
$14.8
$14.9
$15.0
$15.1
$15.2
$15.3
$15.4
Dec '10
Forecast
Mar '11
Forecast
May '11
Forecast
Sep '11
Forecast
Dec '11
Forecast
Mar '12
Forecast
Jun '12
Forecast
Sep '12
Forecast
Dec '12
Forecast
Mar '13
Forecast
May '13
Forecast
Billions
Combined General Fund and Lottery Fund Revenues (2011-13 BN)
Close of Session and Feb 2012 Rebalance Forecast
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10-Year Forecast
Table R.2
General Fund Revenue Forecast Summary (Millions of Dollars, Current Law)
Forecast Forecast Forecast Forecast Forecast Forecast Forecast
2009-11 % 2011-13 % 2013-15 % 2015-17 % 2017-19 % 2019-21 % 2021-23 %
Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg
Personal Income Taxes 10,467.2 3.7% 12,152.7 16.1% 13,579.5 11.7% 15,312.8 12.8% 16,789.4 9.6% 18,497.0 10.2% 20,411.8 10.4%
Corporate Income Taxes 827.6 20.9% 914.6 10.5% 1,036.6 13.3% 1,004.0 -3.1% 974.0 -3.0% 1,005.0 3.2% 1,096.7 9.1%
All Others 1,226.6 29.8% 1,181.2 -3.7% 990.5 -16.1% 1,047.5 5.8% 1,116.2 6.6% 1,201.7 7.7% 1,277.2 6.3%
Gros s General Fund 12,521.4 6.8% 14,248.5 13.8% 15,606.5 9.5% 17,364.2 11.3% 18,879.6 8.7% 20,703.7 9.7% 22,785.7 10.1%
Offsets and Transfers - (12.0) (120.8) (116.3) (82.2) (44.7) (47.3)
Net Revenue 12,521.4 -2.2% 14,236.5 13.7% 15,485.7 8.8% 17,247.9 11.4% 18,797.4 9.0% 20,659.0 9.9% 22,738.3 10.1%
Other tax es include General Fund portions of the Eastern Oregon Severance Tax , Western Oregon Severance Tax and Amusement Device Tax .
Commerc ial Fish Licenses & Fees and Pari-mutual Receipts are included in Other Revenues
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3232
Biennial Revenue Growth
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
24%PIT TOTAL
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For More Information
Standard Contact:
155 Cottage Street NE
Salem, OR 97301
(503) 378-3405
www.oregon.gov/das/oea
Social Media:oregoneconomicanalysis.wordpress.com
@OR_EconAnalysis