may 2013 oregon economic and revenue forecast presentation

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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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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31

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

[email protected]

www.oregon.gov/das/oea

Social Media:oregoneconomicanalysis.wordpress.com

@OR_EconAnalysis

may 2013 oregon economic and revenue forecast presentation

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