State economists delivered good news last week when they reported that tax revenues are expected to come in higher than previously forecast. The officials predicted Oregon will have $162 million more than anticipated for the current biennium, and we’ll have $87 million more for the next state budget. Some legislators credited a growing economy for this recent uptick in revenue, but that’s not really the case. The economists suggested this new revenue is attributable to higher-income Oregonians selling assets ahead of federal tax increases in 2013.
The revenue forecast exposed continued weakness in our economy. Job growth is slow and family incomes are stagnant. Oregon’s average income level is 9 percent below the national average, and economists believe it’ll stay that way until 2020. If Oregon can catch the rest of the nation, we can generate over $1 billion in new tax revenue without raising any taxes. That’s why private sector growth is the best solution for funding education, public safety and other services.
To catch up with the rest of the nation, Oregon needs competitive tax and land use policies to help attract and retain major employers. The Legislature can help small businesses by avoiding burdensome regulations and fee increases. The economy also benefits if the Legislature demonstrates fiscal responsibility and passes significant PERS reform. We can’t continue to lean on wealthy taxpayers to provide temporary spikes in revenue. Over the long-term, Oregon will benefit from a more efficient state government that’s committed to helping our private sector grow.