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State revenue forecast won't avert budget cuts

Feb 12, 2014

Of the Associated Press

SALEM — Oregon's latest revenue estimates mean state lawmakers can't avoid budget cuts during the current legislative session.

The quarterly revenue forecast delivered Wednesday was virtually unchanged from the last.

The $17.1 billion in expected general fund and lottery revenue won't be nearly enough to deliver all the funding promised in the two-year budget approved last summer, while filling large deficits at several agencies and maintaining reserves. Economists upped their projections about $15 million from November.

“While we expect more jobs in the future and those jobs will generate more income tax for the state, the overall revenue impact is largely unchanged,” State Economist Mark McMullen told the House and Senate revenue committees.

Since Oregon is so dependent on personal income tax, Mark McMullen said, the numbers could fluctuate significantly once 2013 tax refunds are processed.

The Legislature withheld 2 percent from the second year of every agency's budget in case revenue growth slowed. Lawmakers have warned that most agencies will be getting very little of that money, though they expect any cuts to be relatively minor.

The departments of Corrections and Human Services, along with the Oregon Health Authority, have projected deficits that lawmakers will need to deal with to get the budget back on track.

A separate forecast of local revenue for schools showed an increase of $98 million spread across the state. The additional revenue is from higher property tax collections, the temporary extension of federal timber payments and proceeds from state land.

“The addition of nearly $100 million in resources for our schools can help districts across the state continue to reduce class sizes and add back instruction days,” Senate President Peter Courtney, D-Salem, said in a statement.

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