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Dispatches from public radio's correspondent at the Oregon Legislature. This is a venue for political and policy coverage of the state government in Salem and its impact on the people of Oregon.

Oregon Revenue Outlook Sets Up Challenging Budget Cycle

Chris Phan
Flickr -

Oregon lawmakers didn't get much by way of good news Wednesday with the release of the latest revenue projections. Those show a $52 million drop in anticipated revenue during the upcoming budget cycle.

That means lawmakers will have to patch up an even bigger budget shortfall, which is already expected to exceed $1.5 billion.

Still, state economist Mark McMullen said Oregon's economy as a whole is doing well, even if the state's growth is slowing down.

"The growth that we'd been seeing is really unsustainable over the long term,” he said. “It was fine as we were digging ourselves out of the hole of the recession, but now that the labor market is closer to healed, we can't support those kind of growth rates forever."

This was the first revenue forecast since the failure of Measure 97. That corporate tax hike would have pumped roughly $6 billion into state coffers for the upcoming budget cycle.

Oregon Governor Kate Brown will release her proposed two-year spending plan early next month. In a statement, she said her budget proposal "will necessarily include a level of program cuts I find unacceptable."

Brown said she'll work with legislative leaders to "better align state resources" to help fund a "stronger, better Oregon."

As lawmakers consider ways to fill the looming budget shortfall, the union-backed group that sponsored Measure 97 will hold an event Thursday in Portland to announce the "next phase" in their attempt to boost funding for schools and other state services.

It was a different story in Washington state as the revenue outlook there experienced a slight uptick Wednesday. The state's Revenue Forecast Council projected a $137 million increase in revenue for the upcoming budget cycle.