oregon economic and revenue forecast, june 2016

OFFICE OF ECONOMIC ANALYSIS

Economic and Revenue Outlook: June 2016

June 3rd, 2016 Oregon Office of Economic Analysis

Mark McMullen

Josh Lehner

OFFICE OF ECONOMIC ANALYSIS

Economic Update and Outlook

2

OFFICE OF ECONOMIC ANALYSIS

Economic Outlook

3

OFFICE OF ECONOMIC ANALYSIS

Diminishing Slack

4

OFFICE OF ECONOMIC ANALYSIS

U.S. Weakness is Concentrated

5

OFFICE OF ECONOMIC ANALYSIS

Global Weakness To Hit Oregon

6

OFFICE OF ECONOMIC ANALYSIS

Intel Layoffs

7

OFFICE OF ECONOMIC ANALYSIS

Intel Layoffs

8

9Oregon Office of Economic Analysis

Affordability

Qualityof Life

JobAvailability

PolicyThe Housing TrilemmaCities face tradeoffs in terms ofhousing affordability, job availabilityand quality of life. Comparing the100 largest MSAs in the country.

Source: David Albouy, BEA, BLS, Census, IHS Global Insight, Oregon Office of Economic Analysis

• Youngstown, OH

Detroit, MI •

Cincinnati, OH • Houston, TX •

• Atlanta, GA• Phoenix, AZ

• Omaha, NE

Oklahoma City, OK •

Des Moines, IA•

• Seattle, WA

Portland, OR •San Francisco, CA •

Boise, ID •Providence, RI •

Sacramento, CA •

OFFICE OF ECONOMIC ANALYSIS

Housing Supply is Low

10

11Oregon Office of Economic Analysis

Rural Price to Income Ratio

> 4.5

3.3-4.5

2.3-3.3

< 2.3

Urban

Data: American Community Survey, 2009-2014 Estimates

Source: Census, Oregon Office of Economic AnalysisMap Template: www.clearlyandsimply.com

OFFICE OF ECONOMIC ANALYSIS

Demographic Drag Abating

12

OFFICE OF ECONOMIC ANALYSIS

New Minimum Wage Legislation

13

OFFICE OF ECONOMIC ANALYSIS

Revenue Trends

14

OFFICE OF ECONOMIC ANALYSIS

Final Payments Tracking Low

15

OFFICE OF ECONOMIC ANALYSIS

So are Refunds, Which is Good

16

OFFICE OF ECONOMIC ANALYSIS

Kicker Credits by Week

17

OFFICE OF ECONOMIC ANALYSIS

2015 Income Growth Down Across The Board

18

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Interest Cap Gains Dividends Pensions TotalIncome

Tax AfterCredits

Wages IRAs Business SocialSecurity

ScheduleE

Matched Returns, Full Year Filers, % change

2014 2015

OFFICE OF ECONOMIC ANALYSIS

Corporate Taxes Turn Down

19

OFFICE OF ECONOMIC ANALYSIS

Revenue Outlook

20

OFFICE OF ECONOMIC ANALYSIS

Lottery: La Center, WA Casino

21

OFFICE OF ECONOMIC ANALYSIS

2015-17 Forecast Evolution

22

OFFICE OF ECONOMIC ANALYSIS

Forecast Changes

23

June 2016 Forecast Changes Relative to the March 2016 Outlook(millions of dollars)

2015-17 2017-19 2019-21 2021-23 2023-25

General Fund

Revenues $16.9 $132.6 $134.9 $60.9 -$51.6

Other General Fund Changes

Beginning Balance $0.0 -$57.1 $0.9 $1.7 $0.8

ORDF Transfer $0.0 -$0.7 -$0.7 -$1.3 -$0.6

Expenditures -$74.0 $0.0 $0.0 $0.0 $0.0

Sub-Total -$74.0 -$57.9 $0.2 $0.4 $0.2

General Fund Ending Balance -$57.1 $0.9 $1.7 $0.8 -$0.6

Lottery Fund

Revenues $37.2 -$55.1 -$46.8 -$19.4 -$20.8

Other Lottery Changes

Beginning Balance $0.0 $39.9 $0.0 $0.0 $0.0

Total Available Resources -$19.9 $59.6 $88.2 $41.8 -$72.3

OFFICE OF ECONOMIC ANALYSIS

2424

Forecast ChangesDifference from March Forecast, $ millions

54.1

117.4

88.0

41.5

-72.5-$100

-$50

$0

$50

$100

$150

$200

2015-17 2017-19 2019-21 2021-23 2023-25

Personal Corporate Lottery Other Total

OFFICE OF ECONOMIC ANALYSIS

2525

Biennial Revenue Growth

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Personal Income Taxes Total Net Revenue

OFFICE OF ECONOMIC ANALYSIS

26

Reserves

Effective Reserves ($ millions)

Apr

2016

End

2015-17

ESF $257.5 $381.6

RDF $371.7 $387.9

Reserves $629.2 $769.5

Ending

Balance $261.8 $261.8

Total $891.1 $1,031.4

% of GF 4.9% 5.7%

OFFICE OF ECONOMIC ANALYSIS

27

For More Information

Standard Contact:

155 Cottage Street NE

Salem, OR 97301

(503) 378-3405

oea.info@state.or.us

www.oregon.gov/das/oea

Social Media:

www.OregonEconomicAnalysis.com

@OR_EconAnalysis