Latest Oregon economic forecast shows more money, but federal government leaves future murky
Chaotic federal announcements about taxes, tariffs, mass firings of federal employees and spending cuts haven't yet affected Oregon's economic forecast, the state's chief economist reported Wednesday.
For now, according to chief economist Carl Riccadonna and senior economist Michael Kennedy, Oregon lawmakers can expect to have about $38.2 billion to spend in the state's next two-year budget. That's $350 million more than they thought they would have at the last forecast in November.
But Gov. Tina Kotek and legislative budget-writers have advocated for caution and reiterated those calls on Wednesday. The forecast arrived the day after congressional Republicans voted for a spending plan that included $2 trillion in not-yet-specified spending cuts.
'Our state's available resources for the coming years are projected to be slightly higher than previously expected, which is good news, but we must continue to budget responsibly,' said House Speaker Julie Fahey, D-Eugene. 'We need to be prepared for economic headwinds created by the federal administration's actions and for potential cuts to federal programs that Oregonians rely on, like Medicaid.'
Riccadonna said tariffs could have a particularly acute effect on Oregon. The state's economy relies more on manufacturing and trade than most states, and it's especially sensitive to trade with Asia.
When President Donald Trump installed tariffs in 2018, Oregon's economy slowed down, Riccadonna said, but the Tax Cuts and Jobs Act also provided a fiscal stimulus that softened the sting of the trade war.
'That may very well be the case again this year, as you know that the one big, beautiful bill is being worked on, and the expectation is that Trump tax cuts will be extended, and maybe even corporate income taxes lowered further,' he said during a briefing with reporters on Tuesday. 'That's a very significant positive macroeconomic narrative that will offset some of the negative from the trade side.'
It's too early to know the economic impact of other changes, such as the federal government firing tens of thousands of workers in recent weeks. That's because those workers' unemployment claims haven't yet been reflected in state-level data.
'Most of the DOGE cuts started around President's Day weekend, so it's really going to be the first two weeks in March where we start to see a quantifiable measure of these job cuts in the state economic data,' Riccadonna said.
The $350 million more available for the next budget cycle reflects $550 million in higher expected income tax revenues tied to higher wages during the next two years, minus $200 million lost to extra state spending to address wildfire costs in December and some late tax refunds. Oregon paid out a record high kicker — the tax credit that takes effect when the state collects more tax revenue than forecasted — of $5.6 billion last year.
Since Riccadonna started as chief economist last fall, his top task has been to create more accurate forecasts to reduce the growing kicker payouts. But Oregonians can still expect a large kicker in 2026: The latest forecast pegs it at $1.726 billion, slightly lower than the $1.8 billion predicted in November. Higher-income Oregonians who pay more in taxes get higher kicker payments.
Lawmakers will craft the budget for the next two years based on the next economic forecast, expected in late April.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NBC News
21 minutes ago
- NBC News
Some Republicans push to undo gambling tax hike they passed in Trump's megabill
WASHINGTON — Some top Republicans are regretting that they inserted a tax hike on gamblers into President Donald Trump's megabill, with several lawmakers who supported the legislation now calling for rolling back that policy. Rep. Jason Smith, R-Mo., the chair of the tax-writing House Ways and Means Committee, told NBC News that the provision was a 'mistake' and needs to be undone. 'It was definitely not something that we did in the House. I don't understand why the Senate decided to do something like that,' Smith said in a brief interview Wednesday. 'And so it is definitely a provision that — I'm interested in making sure that we fix the Senate's mistake.' The new law cuts the tax deduction on 'wagering losses' from 100% to 90% of losses starting in 2026, disrupting the current dynamic where bettors can offset losses with gains and pay taxes only on net earnings. The new policy could tax gamblers even in years where they break even or net-out losses. For instance, a bettor who wins $100,000 and loses $100,000 in the same year would be stuck with a taxable income of $10,000. 'It would be potentially catastrophic for the industry as it would disproportionately affect high volume gamblers,' said Jack Andrews, the professional sports bettor who goes by that alias. 'Those high volume players are the lifeblood of most casinos,' he added. 'If they realize they could lose, and still have taxable income to pay that they didn't make, they'll stop playing. Or find ways to play that don't generate a paper trail.' Andrews said the new law 'could result in players losing money gambling, but still owing taxes on 'income' they didn't make.' The nonpartisan Congressional Budget Office estimates the gambling tax change will raise $1.1 billion over a decade. At least a couple of senators who supported the megabill — which passed with only GOP votes — want to undo the gambling tax. Sens. Ted Cruz of Texas and Bill Hagerty of Tennessee have signed on to legislation to roll it back, alongside Nevada's two Democratic senators, Catherine Cortez Masto and Jacky Rosen. The bill is called the Facilitating Useful Loss Limitations to Help Our Unique Service Economy Act, or the FULL HOUSE Act. 'It's unfair. It makes no sense,' Cruz, who plays poker in his spare time, said in an interview of the tax provision. 'The income tax is designed to tax actual income,' he said. 'For example, playing poker for profession — not allowing them to deduct their losses means they're paying taxes not on their actual income.' 'I think we should fix it,' he added. Cruz said most Republicans voted to pass the gambling tax change without knowing about it, a damning indictment of the legislative process for the bill. 'Nobody really takes responsibility for introducing it,' Cruz said. 'None of us knew about it. It's a very big, beautiful bill, and so there are lots of provisions there that at the end, things were moving very fast. I don't know of anyone who was aware of the provision at the time it passed.' The provision was introduced in the mid-June version of the bill, with Sen. Mike Crapo, R-Idaho, overseeing the tax portion as chair of the Senate Finance Committee. And he, too, is open to revisiting it. 'Senator Crapo is open to receiving feedback from affected stakeholders and learning more about industry reporting and compliance,' a Crapo spokesperson said. 'To comply with the rules of reconciliation, every provision from the Tax Cuts and Jobs Act needed to be modified to create a budgetary effect. In order to retain the gambling loss provision, it was changed to 90 percent,' the spokesperson added. 'While the committee heard from gaming associations on other provisions after text was released on June 16th, there were no concerns raised with lowering the threshold.' The blowback from bettors has since grown since Trump signed the bill into law on July 4, and Democrats have added it to their list of grievances with the One Big Beautiful Bill Act. 'Republicans' hastily put-together bill is full of provisions that are completely counterproductive and harmful to Americans. The provision limiting the wagering loss deduction will have a negative impact on Nevada, and it's one of the many reasons I voted no,' Cortez Masto, the author of the FULL HOUSE Act. On July 10, she sought unanimous consent on the Senate floor to pass the legislation but was met with an objection from Sen. Todd Young, R-Ind., which prevented speedy passage. Her office said she will 'continue to explore all options available to restore the 100% dedication for gambling losses and protect Nevada's gaming and hospitality industries.' If the tax change isn't undone, it will come as a shock to some bettors, as 'many of them wouldn't realize this until they do their 2026 taxes, which would be early 2027,' Andrews said. But reversing it won't be so easy. Senate Majority Leader John Thune, R-S.D., poured cold water on the proposals from some Republicans to roll back parts of the bill. Asked by NBC News on Tuesday whether measures offered by his colleagues to undo the Medicaid cuts and gambling tax were going to succeed, Thune said flatly, 'No.' 'There are members out there who are saying, we'd like to do this or that differently. That's always the case,' Thune said. 'This was a big piece of legislation that had a lot of moving parts. Not everybody got everything they wanted, but at the end of the day, it's historic in its breadth and the things that it addresses.' The White House didn't immediately return a message seeking comment on whether Trump is open to revisiting the provision. Other Republicans say they're unfamiliar with the industry blowback to the gamblers' tax change. 'I honestly, frankly, haven't had a chance to look at it. So I don't even know what they're talking about,' Rep. Vern Buchanan, R-Fla., the second ranking Republican on Ways and Means, said. On the other hand, Sen. John Cornyn, R-Texas, sounded surprised by how much attention the issue is getting. 'Why do so many people care about the gamblers tax?' he quipped. 'I'm kind of agnostic. I don't, frankly, understand why it's such a big deal. But happy to look at anything they propose.'
Politico
38 minutes ago
- Politico
Congress can't decide how much more to cut on climate
The House left Washington this week for its August recess, setting the stage for fall showdowns with the Senate and White House on deeper cuts to climate and environment spending. If the sides can't work out their differences, or agree on how to kick the can past Oct. 1, a partial government shutdown could hit in a little more than nine weeks. Three distinct visions of the future are at play: — President Donald Trump's budget request in May asked lawmakers for massive reductions for programs that aim to fight climate change, and agencies including the Environmental Protection Agency and the National Park Service. — The Senate has put forth largely bipartisan proposals, eyeing a small cut to EPA and an increase for the Interior Department. In some cases, senators are pushing back at how Trump is handling government funding. — The House, on the other hand, is aiming to take a sledgehammer to those agencies and more, with double-digit percentage cuts that would have to advance with only Republican votes. Its cuts still wouldn't bite as deeply as what Trump proposed. A MOUNTAIN OF DIFFERENCES: Take the spending bill for the Energy Department and water development programs, which advanced through the House Appropriations Committee last week on a party-line vote. It would fund the agencies in its purview at $57.3 billion, or $766 million less than current levels. The Energy Department would get $48.8 billion, a cut of $1.4 billion. Its Office of Energy Efficiency and Renewable Energy is targeted for a 46 percent decrease, while the Office of Grid Deployment's funding would fall by more than half. Trump's budget request eyed even bigger cuts, seeking to reduce the Energy Department's budget by $4.7 billion, slash about 70 percent of the renewable energy office's funding and mostly eliminate money from the 2021 bipartisan infrastructure law. Things are even messier on the Senate side. Sen. John Kennedy (R-La.), who chairs the subcommittee overseeing the energy and water legislation, says he wants the bill to spend less than the $59.9 billion that Appropriations Chair Susan Collins (R-Maine) and ranking member Patty Murray (D-Wash.) had agreed to, creating an impasse that has blocked the legislation from moving forward, our Andres Picon reported. A COLLISION OVER EPA: House and Senate appropriators have also shown stark differences in how they're handling Interior and EPA — including which programs they want to cut. The House Appropriations Committee advanced its bill along party lines this week, including a proposed 23 percent cut for the EPA. The bill's total spending for the agencies it covers, $38 billion, is $9.2 billion higher than what Trump requested. But the Senate version, advanced the following day by a subcommittee chaired by Sen. Lisa Murkowski (R-Alaska), would cut EPA just 5 percent. The Senate bill also takes aim at the Trump administration and its priorities. It would cut EPA Administrator Lee Zeldin's office, provide no funding for EPA's planned closure of its research office, and require the administration to change the name of Alaska's Mount McKinley back to Denali, reversing Trump's January renaming. It's Friday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Timothy Cama. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to tcama@ Today in POLITICO Energy's podcast: Zack Colman breaks down how the Trump administration is planning to back off from regulating greenhouse gas emissions. Power Centers Extreme storms producing even more rain than some scientists expected Heavy rainfall events like the one that created deadly flooding in the Texas Hill Country are a symptom of climate change, Chelsea Harvey writes. 'The biggest, baddest, rarest extreme precipitation events are precisely those which are going to increase the most in a warming climate,' Daniel Swain, a climate scientist at the California Institute for Water Resources, said not long after the Texas floods. This is because a warmer atmosphere can hold more water. But scientists say recent flash floods have produced more rainfall than their equations hold. Trade deals take gas along for the ride Some nations are currying favor with the Trump administration ahead of an Aug. 1 deadline for tariffs by buying liquefied natural gas from the U.S., Brian Dabbs and Carlos Anchondo write. The president announced new trade deals this week with Indonesia and Japan, the latter of which he said will include a 'major expansion of U.S. energy exports.' 'LNG is playing a significant role in the bilateral trade talks,' said Mark Menezes, president of the U.S. Energy Association trade group and a former Department of Energy official in Trump's first term. China, EU agree and disagree on climate European Union leaders agreed to a joint effort with China to fight climate change this week after leaving Beijing without a wider trade deal, Karl Mathiesen, Koen Verhelst and Jordyn Dahl write. The friction over trade stems from China's dominance in clean technology and its associated supply chains. European leaders see China's exports as a threat to their own manufacturing. Chinese President Xi Jinping called on EU leaders to see that 'convergent interests are not a threat,' in remarks reported by the state-run Xinhua News Agency. European Commission President Ursula von der Leyen called the agreement a 'big step forward … our cooperation can set a global benchmark.' In Other News Pumped up: Massachusetts regulators are considering cutting electricity rates in the winter for households that use heat pumps. Dried up: Louisiana canceled a $3 billion coastal restoration project meant to protect the state from rising seas and extreme weather. Subscriber Zone A showcase of some of our best subscriber content. The CEO of Exelon and chair of the Edison Electric Institute says he's ready to meet the Trump administration's goals but calls for an 'all of the above' energy approach. The Securities and Exchange Commission wants an appeals court to continue hearing a challenge to a Biden-era climate rule even though it is not defending it in court. That's it for today, folks. Thanks for reading, and have a great weekend!
San Francisco Chronicle
43 minutes ago
- San Francisco Chronicle
MLB trade deadline: Eugenio Suárez, Mitch Keller, Seth Lugo among prized players who could move
PHOENIX (AP) — The Arizona Diamondbacks got the trade deadline party started on Thursday night when they dealt 2024 All-Star Josh Naylor to the Seattle Mariners for two pitching prospects. That probably won't be the last time the D-backs make news before the July 31 deadline. Arizona has had a disappointing season with a 50-53 record and now appears to be one of the most active sellers on the MLB market, dangling third baseman Eugenio Suárez and starting pitchers Zac Gallen and Merrill Kelly. The potential buyers include teams like the New York Yankees, New York Mets, Detroit Tigers, Philadelphia Phillies, Chicago Cubs and Los Angeles Dodgers, who are all trying to beef up their rosters in hopes of a deep playoff run. The market is heating up quickly: The Yankees acquired third baseman Ryan McMahon from the Rockies on Friday while the Mets added left-handed reliever Gregory Soto from the Orioles. The D-backs have been one of the most intriguing teams in baseball over the past few weeks because management has had to make a tough decision whether to buy or sell. Arizona had a 50-50 record after sweeping the St. Louis Cardinals following the All-Star break but were then swept by the Houston Astros. Those three losses appeared to seal their fate as sellers — though Arizona general manager Mike Hazen said he's still open to changing course. 'I want to see this team to continue to go out there and play,' Hazen said. 'I haven't decided what it's going to look like, honestly. I'm open-minded to a number of different things. ... Quite frankly, we're listening to what people have to say and what people have to offer and we're going to do what's best for the long term for this organization.' Naylor's already gone and he'll help a Seattle lineup that could use a little more punch. Suárez is having one of the best seasons of his career, slugging 36 homers over 101 games, and is arguably the best bat on the market. Here's a look at some of the top players who could be available as teams try to upgrade for the stretch run: Eugenio Suárez, 3B, Arizona Diamondbacks Suarez is just an average defensive third baseman these days, but that's not why teams want to acquire him. He's got the kind of bat that can carry a team for weeks at a time, major pop from the right side of the plate. He has 312 career homers, is well-liked in the locker room and has been productive in limited postseason at-bats with a .300 average. Mitch Keller, SP, Pittsburgh Pirates The 29-year-old Keller has been overshadowed in the Pirates' rotation thanks to the emergence of young star Paul Skenes, but the right-hander has been a reliable starter for the past four seasons and was an All-Star in 2023. The one catch is it'll take a sizable haul for the Pirates to make a deal: He's under contract through 2028 as part of a relatively reasonable $77 million, five-year deal. Seth Lugo, SP, Kansas City Royals Lugo has thrived in Kanas City over the past three seasons, moving to the starting rotation from the bullpen and providing consistent results. The 2024 All-Star has a 7-5 record with a 2.95 ERA over 19 starts this year. Zac Gallen, SP, Arizona Diamondbacks Gallen is having the worst full season of his career with a 7-11 record and 5.58 ERA but could still be an attractive add for a team that needs a starter. The 29-year-old right-hander has been one of the top pitchers in the National League over the past five years, finishing in the top 10 of the Cy Young voting in 2020, 2022 and 2023. His stuff is still good and he's had a handful of dominant starts this season. Merrill Kelly, SP, Arizona Diamondbacks The 36-year-old righty has quietly been one of the most consistent pitchers in baseball with a 9-5 record and 3.32 ERA. He was also excellent during the D-backs' postseason run in 2023 with a 3-1 record, 2.25 ERA and 28 strikeouts over 24 innings. Kelly doesn't have an overpowering fastball but has a five-pitch mix that has consistently delivered results. Sandy Alcantara, SP, Miami Marlins The 29-year-old Alcantara isn't the same pitcher he was when he won the 2022 NL Cy Young Award, but the right-hander still has quite a bit of upside. He gave up just one unearned run over seven innings in a win against the Padres on Wednesday, which might help his value. His rotation partner Edward Cabrera — another right-hander — could also garner attention with a 3.48 ERA over 17 starts. Ryan O'Hearn, 1B/DH, Baltimore Orioles The 31-year-old is having a career year with a .281 average, .375 on-base percentage and 14 homers, helping him earn All-Star honors for the first time in his career. His left-handed bat would be useful in a contender's lineup. ___
