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Forecast shows slight uptick in revenue

SALEM — Oregon state revenue is expected to tick up modestly, according to figures released Wednesday, likely preventing the need for spending cuts when lawmakers convene for a five-week legislative session early next year.

Compared with the last quarterly projections three months ago, economists raised their estimates for tax and lottery revenue by $56 million to just under $19.5 billion.

Their projections mean lawmakers won't have to pull back on the spending increases they approved earlier this year for education and safety-net programs. But they also won't have a large influx of money to direct toward school districts, universities and others seeking a bigger boost.

"The forecast keeps our investments in top priorities from the 2015 session on track for now," said Democratic Sen. Ginny Burdick of Portland, the majority leader. "We will be ready to take action in February to keep funding for education, health care and public safety on the right course."

Still, legislative leaders warned that the picture could change if the economic recovery slows.

"Things can change quickly," said Senate President Peter Courtney, D-Salem. "We get the next forecast 10 days into the February session. We won't have much time to react, if the need arises."

Economists said Oregon employers are creating new jobs and raising wages at a faster clip than the national average, contributing to strong tax collections. Even the manufacturing sector is strong in Oregon despite a pullback nationally led by declining prices in the oil and gas industry, said Josh Lehner, a senior economist for the Office of Economic Analysis.

And while Oregon has become a popular destination for people moving here from other states without jobs lined up, employers are adding jobs even faster, he said.

"People show up here without a job and they're looking for work. Over time, Oregon has been able to absorb...these new workers into the labor force, but it takes some time,"

So-called "sin taxes" applied to products like alcohol and tobacco are also up, economists said.

"Vice is alive and well in Oregon," joked Mark McMullen, the chief state economist.