Economists say Oregon tax revenue forecast up

Tax collections will climb $270 million, they project

SALEM — State economists say a slow, steady economic recovery means the Oregon treasury will take in more money than previously expected.

The quarterly forecast released Thursday said revenue from tax collections will be up by more than $270 million since the last projections three months ago.

That previous revenue forecast anticipated $16.6 billion in revenue over the next two years.

The news did little to thaw a stalemate between Democrats who want to raise new revenue and Republicans seeking further cuts to public-employee pensions.

On Wednesday, Gov. John Kitzhaber unveiled a budget proposal aimed at breaking the legislative deadlock. He gave lawmakers until Thursday to get on board.

With no apparent progress, the governor issued a statement late Thursday urging lawmakers to move forward with a budget without pension cuts or tax increases.

Democrats said they were cheered by the report; Republicans were less reassured.

Senate Minority Leader Ted Ferrioli said in a statement that the projections should not change the budget debate. "The focus of this session must remain the same: fixing Oregon's broken retirement system and fostering job creation," he said.

House Speaker Tina Kotek called the forecast "great news" and said the money should be used to reinvest in schools and education. "We can go home with a good budget for schools and critical services, but we have the opportunity to do more," she said in a statement.

Senate President Peter Courtney acknowledged that the forecast doesn't make lawmakers' decisions any easier but suggested a compromise as the best way forward. Courtney said he wants to see the "new money" used to fund mental health services.

State economists said there's a good chance the increased revenue will trigger corporate kicker rebates this year. There is a much slimmer chance of personal kicker rebates.

State economist Mark McMullen said that while Oregon's economy is improving, the pace of its recovery is slower than in previous downturns. "We're still not back to the good old days," he said.

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