Posts Tagged ‘Measrues 66 and 67’

Lack of Jobs Leads to Sobering Revenue Forecast for Oregon

Friday, September 3rd, 2010

Lack of Jobs Leads to Sobering Revenue Forecast for Oregon
Oregon doesn’t need more taxes, it needs more taxpayers

Last Thursday, as the state economist was delivering a sobering prediction for state revenues, an overlooked part of the presentation shed critical light on Oregon’s economic future. While legislators sat in rapt attention waiting for news on how much money the state would lose over the course of the biennium, the state economist delivered an economic and jobs report that should have policymakers re-doubling their efforts to make Oregon an attractive place for business, investment, and job creation.

Without critical efforts to regain Oregon’s footing as a place for business and jobs, legislators will continue to hear quarterly revenue forecasts such as last week’s with state revenues plunging once again by over $377 million – fueled by massive drops in personal income tax receipts. Projected tax receipts have dropped by over $1.2 billion since the legislature adjourned its regular session in June 2009.

In the meantime, the promises that the tax increases in Measures 66 and 67 would fix the state’s budget shortfalls have been swept away by economic realities.

On a year-over-year basis, Oregon jobs decreased in the second quarter by 1.2 percent. Oregon’s unemployment rate now sits at 10.6 percent, essentially unchanged for the past nine months. In addition, the state economist noted that Oregon is showing a “pause” in economic activity through the summer. As a consequence, the employment forecast for the remainder of 2010 is dismal. Employment in Oregon is expected to see a net decline by over 0.5 percent through the end of the year, with significant job growth not expected until the 4th quarter of 2011.

The State of Oregon DAS reports the following high-wage, private sector industries have taken significant hits this year:
• The wood products industry will see a 3.8 percent decrease in employment in 2010.
• The computer and electronic product sector will shed 1.6 percent of its workforce in 2010.
• The transportation equipment sector will have 11.4 percent fewer jobs this year.
• Employment in the metals and machinery sector will decline by 8.4 percent.
• Non-durables, such as paper manufacturing, will see employment decline by 4 percent.
• Continued job losses of 12.5 percent in the construction industry.
• Trade, transportation and utilities will see slight declines this year of 0.2 percent.
• The financial sector will see employment decline by 2.4 percent in 2010.
• Professional and business services will continue its slide with a 1.9 percent reduction in workforce this year.

While each of these industries is expected to see modest job growth in 2011, the projected job growth is not enough to level out the job losses seen this year. At this point, the Oregon legislature will have some say in how Oregon industries are able to rebound in such a tough economic environment. Legislators would do well to take note of Oregon’s employment problems and vow, at the very least, not to add to the significant burdens already faced by critical private sector industries.

One positive development is that the Oregon Business Plan, a project being spearheaded by private industry leaders and their associations such the Oregon Business Council and AOI, is already talking to legislators across the state on the need for action in three critical areas: (1) a sharp focus on the promotion of employment and income growth; (2) changing the way the state budgets so that it comports with the economy’s ability to pay for services; and (3) changing the Oregon tax code to promote economic growth and stability.

Oregon lawmakers are now at a critical juncture.

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