Taxpayers in Oregon could collectively receive nearly $1 billion in rebates in 2026, after “solid economic performance” in the state.
Oregon’s Office of Economic Analysis released the Oregon Economic and Revenue Forecast on Wednesday, which said: “The personal kicker now stands at an expected $987 million that will be returned to taxpayers in 2026.”
The Office found that Oregon’s economy may be moving out of “the pandemic-era lull and back toward something more like the typical expansion.”
But it also caveated that “only time will tell” whether these signals can be trusted, as they be “more noise.”
It summarized the situation with: “While the economy is slowing down from the inflationary boom, state revenues continue to outpace expectations in recent months. In particular, both personal and corporate income taxes have come in noticeably higher than the previous forecast. Consumption-based revenues like lottery, the corporate activity tax, and recreational marijuana have more closely matched expectations.”
Oregon’s General Fund for the current 2023-25 biennium increased by $676 million compared to the previous forecast, two-thirds of which is due to tracking actually tax collections alone. One-third is thanks to a stronger revenue outlook for the rest of the biennium.
Researchers said: “Historically Oregon’s economy has grown at an above-average rate compared to the nation overall. Oregon is generally more volatile, with local recession deeper, and expansions stronger than those experienced in the typical state.
“The pandemic cycle has been different. The initial economic shock was about the same size in Oregon as it was nationally. Over the entire cycle to date, Oregon’s economy in terms of jobs and income is in the middle of the pack across all states, although a bit below the median.”
They went on: “In some ways it seems like Oregon is a bit out of sync in recent years. This is both in relation to the typical cyclical patterns, and relative performance across states or compared to the nation. Much of this is likely tied to the slowdown, or outright declines in the state’s population. Historically, migration is strongest among 20- and 30-somethings who move in search of a job, and then set down roots.
Stock photo of IRS tax forms, taken in 2018. Oregon taxpayers could receive a kicker of 987 million in 2026.
AP
“There are a few green shoots that Oregon’s relative growth may be picking up. Job gains, employment revisions, withholding tax collections, and the number of income tax returns filed so far this year all point toward the potential of stronger gains. For now, they’re just that. It is always hard to be certain a new trend is emerging, but our office is watching these data closely.”
Oregon Governor Tina Kotek said: “It is encouraging to see that our economy continues to be stable, with healthy workforce participation in key sectors. The forecast urges an emphasis on core programs and holding our ground on Oregonians’ top priorities.”
However, Senate Republican Leader Daniel Bonham said the forecast is “another clear warning that we must exercise fiscal restraint.”
“Oregon families are already feeling the squeeze from high costs, and it’s imperative that we don’t add to their burden by overspending,” he added.
