Oregon Revenues Take Another Hit
SALEM, Ore. - Oregon lawmakers say the latest round of economic bad news for the state won't mean more cuts, at least for now. But the revenue forecast issued by state economists Thursday leaves very little wiggle room over the next year and a half.
And state economic analysts are keeping a wary eye on Europe's financial turmoil.
Oregon's chief financial forecaster Mark McMullen says economists are by no means unified in their view on how Europe's fiscal troubles will affect this country. But the acting state economist told lawmakers there's no doubt that a weak Europe will affect the economy of the United States — and by extension, Oregon.
"This of course has many people concerned," McMullen says. "Because in the worst case this could certainly set growth back by decades, not years."
But for now, McMullen said the state is still experiencing growth. It's just that the growth is turning out to be a little more --his word — "anemic" than expected. State revenues are predicted to come in about $107 million lower than forecasted just three months ago.
Republican Representative Vicki Berger says that while the state has not technically fallen back into a recession...
"If you are unemployed in this state, have been unemployed, your prospects aren't good, you've still got debt, your housing value is dropping and then the economist comes in and said we're not in a recession, you kind of go what's he talking about, it sure looks recessive to me."
For now the revenue drop isn't enough to trigger a new round of spending cuts. That's because lawmakers built some breathing room into the current spending plan. But the sour economy has eaten away nearly two-thirds of that cushion. And we're not even five months into the two-year budget cycle.
Lawmakers plan to tweak the budget when they meet in February. In the meantime, Oregon Governor John Kitzhaber has ordered a hiring freeze at many larger state agencies.
On the Web:
Oregon revenue forecast:
Gov. Kitzhaber's statement:
Copyright 2011 Northwest News Network