SALEM, Ore. — Oregon economists delivered a bleak revenue forecast for the state over the next five years, predicting losses of almost $10.5 billion through 2025. The state's latest economic outlook report came out on Wednesday, with lawmakers quickly voicing their reactions.
Unsurprisingly, the outsized impact on Oregon's revenue was attributed to the coronavirus pandemic and the state's response, which has resulted in mass lay-offs and record unemployment.
Experts say the recession is "extremely severe" and the deepest we have seen since 1939. But they said the economy should return to good health by mid-decade, making it shorter than the great recession of 2008.
Oregon officials predicted a "strong initial rebound" when COVID-19 restrictions are lifted, but said that the rally will be incomplete. Moreover, economists reported that the state's reliance on income taxes has made its revenue outlook "more volatile than in most states."
Gov. Kate Brown issued a statement shortly after the revenue forecast came out, pointing toward the federal government for help in making up for the major revenue shortfalls.
“The latest forecast for state revenue makes it clear that we have tough choices ahead. We will need to tighten our belts. I am working with legislative leaders to preserve critical state services, find efficiencies, and prepare for potential budget cuts," Brown said.
“Make no mistake, the budget gap created by this pandemic is too large to bridge without additional Congressional action," she continued. "I am thankful for the work of our congressional delegation to secure federal funding for Oregon in the relief packages Congress has passed so far. But those funds only address a fraction of our current need, especially since we are not permitted to use the funding we have received so far to address state budget shortfalls."
Lawmakers on both sides of the aisle quickly added their voices to the response. For Senate Republican leader Fred Girod, R-Stayton, the blame lay with Brown's enduring coronavirus restrictions.
“Oregonians had a clearly defined goal from the beginning of the COVID-19 pandemic: to flatten the curve. Governor Brown’s insistence to keep Oregon’s economy shutdown despite flattening the curve weeks ago, has cost Oregon billions of dollars of revenue, impacting generations to come," Girod said. "This revenue loss could have been mitigated if the Governor had been a leader and opened our state weeks ago.”
House Speaker Tina Kotek, D-Portland, struck a more hopeful note — referencing a rainy day fund that the state has worked to fill.
“Fortunately, our state is in a far better financial position than it was at the start of the Great Recession," Kotek said. "We have strong reserves that should be tapped early to avoid additional damage to our economy. I also believe increased bonding for public infrastructure will help to jumpstart the economy and put people back to work."