Slide 1

The Road Ahead

Slide 2

Will we circle into a drain? Low investments in education and high income tax rates threaten further erosion of personal income levels The U.S. and Oregon economies appear poised for a slow, jobless recovery. Aging of the Baby Boom generation will increase the age 65+ population by 46% during 2010-2020, putting upward pressure on Medicaid spending. High health inflation will continue, which will drive up the costs of Medicaid and public employee compensation. Legacy costs of a poorly managed/conceived public employee pension system have come due.

Slide 3

Slow Economic Recovery 1980 1990 No change 2007 State forecast 2001

Slide 4

The number of Oregonians aged 65+ will increase 46% during 2010-2020. Or about 60 per day. And, as they retire, theyll take their diplomas and experience with them.

Slide 5

Fewer workers to pay for an aging population

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The incoming workforce is less educated

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Legacy costs of a poorly designed and managed public pension system have come due

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Costs of an Aging Population will Hit Soon Source: ECONorthwest calculations using data from Mercer, Kaiser Family Foundation, and Health Affairs

Slide 9

Decade of Deficits Revenues (bns.)Expenditures (bns.)

Slide 10

With no sales tax and recent income tax increases, Oregon income and capital gains taxes are among the highest in the nation M 66