Office of Economic Analysis, summary of November forecast

7/30/2019 Office of Economic Analysis, summary of November forecast

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Oregon Economic andRevenue Forecast

SUMMARY

December 2012Volume XXXII, No. 4

Release Date: November 20, 2012

State of Oregon

Department of Administrative Services

Office of Economic Analysis


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EXECUTIVE SUMMARY

December 2012

Oregon Economic Forecast

Current Conditions

As 2012 winds down, Oregons economic expansion persists, but remains stuck in a low gear.Growth continues to come in fits and starts a strong quarter or two followed by a weak quarter ortwo with the underlying trend remaining slow and steady. Real GDP has averaged just over 2percent growth since the expansion started, with the nation adding approximately 150,000 jobs permonth so far in 2012. The slowdown seen in recent months can largely be attributed to the globalmanufacturing cycle beginning to wane. Future orders and current shipments have softened across awide range of Oregons products.

The good news is that the housing recovery is here to help drive economic growth. Even so,

housing-related production is just now beginning to improve from its recessionary lows, and has along way to go before the level of production approaches anything considered a normal year forhousing.

Although sales growth has slowed, profitability remains near record highs for many businesses. Forhouseholds, signs are both encouraging and worrisome. Job growth has been weak, with theunemployment rate coming down very slowly. Wage growth has been even softer from a historicalperspective. Average wages are growing at a 1.5 percent rate among production and non-supervisory employees and just under 2.0 percent for all employees overall. In good years, like thelate 1990s or even mid-2000s, wage growth reached 4 percent per year.

Given such weak growth, consumers like the economy as a whole remain vulnerable to shocks.Encouragingly, inflation remains in check for now, and households are becoming more confidentabout their future prospects. Consumer sentiment recently hit levels not seen since before the GreatRecession suggesting that recent gains in spending may be sustainable going forward.

Outlook

Expectations call for growth in the coming few months to look like the growth we have beenexperiencing: slow. Although the fundamentals underlying economic growth remain strong,uncertainty continues to weigh on both businesses and households. Given weakness among ourleading trading partners, and an uncertain federal policy environment, many firms are reluctant to

take the risk of expanding their operations despite ample resources and profits. Similarly,households remain reluctant to make large purchases until their future job prospects become morecertain.

The international slowdown is a drag on the U.S. economy. Historically, however, the U.S. has notfallen into recession due to global weakness alone. Of course, with increased globalization amongU.S. businesses, ties to growth in Europe and Asia are now stronger than ever before.


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The uncertainty of federal policy is weighing on both business and consumer decisions, delayingtheir investments and therefore slowing growth. The so-called fiscal cliff has the potential to derailthe expansion and send the economy back into recession. The combination of planned spending cutsand allowing tax rates to rise amounts to between 3 and 4 percent of GDP according to mostestimates. While these impacts are unlikely to hit simultaneously and in full force precisely onJanuary 1

st, 2013, their impact will be significant for an economy growing at just a 2 percent rate.

Although the recent national elections did little to change the composition of federal policymakers,there is a renewed sense of optimism that a budget deficit deal can be reached in the comingmonths. Should a deal in fact be reached by the middle of next year, the underlying economicconditions are primed for some acceleration in growth.

As one example, emergency unemployment insurance benefits are scheduled to expire January 1st,

and will impact consumer spending. In Oregon, the average unemployment check for individuals onthe extension programs is currently about $300 per week. Should these benefits expire, estimatesare that 26,000 Oregonians will lose these payments at the end of the year. This amounts to a loss ofover $30 million in January alone. While the best way forward would certainly be to increase thenumber of jobs, a short term loss of this magnitude would be a step backward.

Beyond these near-term issues, the stage is set for stronger growth should the economy manage tosuccessfully navigate the next few months. The primary reason for optimism is the strength ofbalance sheets for businesses and consumers alike. With financing costs low and corporate profitshigh, a great deal of spending and investment stands to be unleashed as soon as some of theuncertainty that is obscuring the near-term outlook is cleared away. Although household net worthis not back to pre-recession levels, it has been increasing strongly. Home prices are again rising, andstock markets have regained much of their recessionary losses. Delinquencies on consumer debt aredown across the board (auto loans, student loans, credit cards, etc.). Even rates of mortgages 1 or 2payments behind have fallen to historically low levels. Only payments for mortgages 90+ days pastdue remain stubbornly high. All told, many businesses and consumers now have the resources withwhich to drive growth, and are lacking only the courage to do so.

The baseline (most likely) employment forecast remains essentially unchanged. Slow growth willcontinue to be the norm. Oregon is not expected to recover all of the jobs it has lost until the end of2014seven years after the recession began.

Summary of Recent Trends

Getting a handle on the health of Oregons labor market is being somewhat complicated bytechnical issues within the underlying payroll jobs data. Technical issues aside, employment inOregon continues to increase at a slow, subdued pace so far in 2012, approximately in line with thegains seen at the U.S. level. After a strong start to the year, with employment increasing nearly 3percent on an annual basis in the first quarter, employment gains have slowed the past two quartersin Oregon.

The employment data discussed in this report is adjusted for two important technical purposes:seasonality and the upcoming benchmark revisions

1. Given the relative strength of employment as

1 Each year the Oregon Employment Department and the U.S. Bureau of Labor Statistics revise the employment data a process known as benchmarking. The current establishment survey (CES), also known as the monthly payroll survey,


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measured by data collected through the unemployment insurance program, it is clear thatpreliminary payroll job counts will be revised upward significantly when benchmark adjustmentsare made next year. Such preliminary revisions to the payroll survey data are regularly published insome states, and are currently a topic of discussion at the Oregon Employment Department.

After adjustments, the data reveals a state that continues to expand slowly, adding approximately

25,000 jobs in the past year (1.5% through 2012q3). Unadjusted data suggest Oregon has beencloser to stagnating, adding only 17,800 jobs in the past year (1.1%).

Over the past year, job growth has been widespread across industries, with only information andfinancial service firms seeing small declines in the private sector. Public sector employment hascontinued to fall. However, the losses are lessening in recent months. The largest gains have been inprofessional and business services, leisure and hospitality, and retail trade which increased byapproximately 7,800, 3,200, and 3,600 jobs respectively, from 2011q3 to 2012q3. Health servicesand construction each added between 2,000 and 3,000 jobs over the past year. These five mainindustry groups account for approximately 60 percent of all private sector gains, withmanufacturing accounting for another 16 percent, or 4,400 jobs. Within manufacturing, gains wereled by durable goods, particularly metals and machinery.

Demographic Forecast

Oregons population count on April 1, 2010 was 3,831,074. Oregon gained 409,550 personsbetween the years 2000 and 2010. The population growth during the decade of 2000 to 2010 was12.0 percent, down from 20.4 percent growth from the previous decade. Oregons rankings in termsof decennial growth rate dropped from 11th between 1990-2000 to 18th between 2000 and 2010.Slow population growth during the most recent decade due to double recessions probably costOregon one additional seat in the U.S. House of Representatives. Actually, Oregons decennialpopulation growth rate during the most recent decade was the second lowest since 1900. Theslowest, actually negative, was during the 1980s when Oregon was hit hard by another recession.As a result of recent economic downturn and sluggish recovery, Oregons population is expected tocontinue a slow pace of growth in the near future. Based on the current forecast, Oregonspopulation will reach 4.25 million in the year 2020 with an annual rate of growth of 1.03 percentbetween 2010 and 2020.

Oregons economic condition heavily influences the states population growth. Its economydetermines the ability to retain local work force as well as attract job seekers from national andinternational labor market. As Oregons total fertility rate remains below the replacement level anddeaths continue to rise due to ageing population, long-term growth comes mainly from net in-migration. Working-age adults come to Oregon as long as we have favorable economic and

is benchmarked against the quarterly census of employment and wages (QCEW), a series that contains all employeescovered by unemployment insurance. The monthly CES is based on a sample of firms, whereas the QCEW containsapproximately 96 percent of all employees, or nearly a complete count of employment in Oregon. The greatest benefitof the CES is the timeliness monthly employment estimates are available with only a one month lag and theseestimates are reasonably accurate. However the further removed from the latest benchmark, the larger the errors. TheQCEW is less timely as the data is released publically approximately 3-4 months following the end of the quarter. Thegreatest benefit of the QCEW is that is a near 100 percent count of statewide employment. For these reasons, the CES isusually used to discuss recent monthly employment trends, however once a year the data is revised to match thehistorical QCEW employment trends. The last month of official benchmark data is June 2011. The QCEW is currentlyavailable through June 2012, thus the preliminary benchmark used here covers the July 2011 June 2012 period.


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employment environments. During the 1980s, which included a major recession and a net loss ofpopulation, net migration contributed to 22 percent of the population change. On the other extreme,net migration accounted for 73 percent of the population change during the booming economy of1990s. This share of migration to population change declined to 56 percent in 2002 and it wasfurther down to 32 percent in 2010. As a sign of slow to modest economic gain, the ratio of netmigration-to-population change will increase gradually and will reach 72 percent by the end of the

forecast horizon. Although economy and employment situation in Oregon look stagnant at this time,migration situation is not expected to replicate the early 1980s pattern of negative net migration.Potential Oregon out-migrants have no better place to go since other states are also in the same boatin terms of economy and employment.

Age structure and its change affect employment, state revenue, and expenditure. Demographics arethe major budget drivers, which are modified by policy choices on service coverage and delivery.Growth in many age groups will show the effects of the baby-boom and their echo generationsduring the period of 2010-2020. It will also reflect demographics impacted by the depression erabirth cohort combined with diminished migration of the working age population and elderlyretirees. After a period of slow growth during the 1990s and early 2000s, the elderly population(65+) has picked up a faster pace of growth and will surge as the baby-boom generation continue toenter this age group. The average annual growth of the elderly population will be 3.9 percent duringthe forecast period as the boomers continue to enter retirement age. However, the youngest elderly(aged 65-74) will grow at an extremely fast pace during the forecast period, averaging 4.9 percentannual rate of growth due to the direct impact of the baby-boom generation entering the retirementage. Reversing several years of shrinking population, the elderly aged 75-84 will start a positivegrowth as the effect of depression era birth-cohort will dissipate. A faster pace of growth ofpopulation in this age group will begin once the baby-boom generation starts to mature. The oldestelderly (aged 85+) will continue to grow at a moderately but steady rate due to the combination ofcohort change, continued positive net migration, and improving longevity. The average annual rateof growth for this oldest elderly over the forecast horizon will be 1.4 percent.

As the baby-boom generation matures out of oldest working-age cohort combined with slowing netmigration, the once fast-paced growth of population aged 45-64 will gradually taper off to belowzero percent rate of growth by 2012 and will remain at slow or below zero growth phase for severalyears. The size of this older working-age population will remain virtually unchanged at thebeginning to the end of the decade. The 25-44 age group population is recovering from severalyears of declining and slow growing trend. The decline was mainly due to the exiting baby-boomcohort. This age group has seen positive growth starting in the year 2004 and will increase by 1.2percent annual average rate during the forecast horizon. The young adult population (aged 18-24)will change only a little over the forecast period and remain virtually unchanged for most of theyears into the future. Although the slow or stagnant growth of college-age population (age 18-24),in general, tend to ease the pressure on public spending on higher education, college enrollmenttypically goes up during the time of high unemployment and scarcity of well-paying jobs when eventhe older people flock back to college to better position themselves in a tough job market. Thegrowth in K-12 population (aged 5-17) will remain low which will translate into slow growth inschool enrollments. This school-age population has actually declined in size in recent years andwill grow in the future at well below the state average. The growth rate for children under the age offive will remain below zero percent in the near future and will see positive growth only after 2013.Although the number of children under the age of five will decline slightly in the near future, thedemand for child care services and pre-Kindergarten program will be additionally determined by thelabor force participation and poverty rates of the parents. Overall, elderly population over age 65


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will increase rapidly whereas population groups under age 65 will experience slow growth in thecoming decade. Hence, based solely on demographics of Oregon, demand for public services gearedtowards children and young adults will likely to increase at a slower pace, whereas demand forelderly care and services will increase rapidly.

Revenue Forecast

The filing season for personal income taxpayers who requested extensions came and went this yearwithout any major revenue surprises on either the upside or downside. With most tax returns nowhaving been received, the slow-growth year that was expected has largely come to pass.

Although growth in taxes collected out of wages and salaries will likely remain slow for severalmonths, taxes on investment income are expected to post healthy gains in the near term. Shouldstock prices and other investments be able to hold their value through the end of December, Oregoncan expect to see significant growth in tax payments when 2012 returns are filed in April. Not onlyhave many investments been profitable this year, but many investors are being advised to cash intheir gains for tax purposes before the end of the year in anticipation of possible tax increases at thefederal level in 2013.

The outlook for the 2013-15 biennium calls for some modest improvement in revenue growth.However, state revenue collections will still likely fail to keep pace with the growing cost ofproviding public services. Along with underlying economic conditions, tax revenue growth inOregon is expected to fall in between what we have become accustomed to during past periods ofeconomic expansion, and the slow gains we have seen in recent years.

The primary risk facing the near-term revenue forecast is the uncertain future of the nationwideeconomic expansion. Should federal government austerity or the slowdown in Europe and Asiaderail the U.S. economy, Oregon tax collections will come in far below the forecast.

Revenue growth in Oregon and other states will face considerable downward pressure over the 10-year extended forecast horizon. As the baby boom population cohort works less and spends less,traditional state tax instruments such as personal income taxes and general sales taxes will becomeless effective, and revenue growth will fail to match the pace seen in the past.

2011-13 General Fund Revenue

Growth in general fund revenues has been slow in recent months. Personal income taxes aregrowing due to a mix of both labor and investment income. However, gains from labor incomeslowed in the fall as the job market cooled off. Corporate excise taxes remain stable after droppingsharply early in the biennium.


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Collections of most major revenue types have closely matched expectations in recent months. Withthe economic forecast tracking closely as well, the revenue outlook for the 2011-13 bienniumremains largely unchanged from the September 2012 forecast. The forecast for General Fundrevenues for 2011-13 is now $13,961 million. This represents an increase of $40 million (0.3%)from the September 2012 forecast.

The forecast for the 2011-13 biennium is now $71 million below the Close of Session forecast.Given the strong employment gains seen in early 2011, the Close of Session forecast is moreoptimistic than other versions produced before or since. Nevertheless, a strong April 2013 of taxcollections would put us back on track with the Close of Sessions relatively optimistic outlook. Inthe unlikely event we see a revenue surge similar to what occurred at the peak of the technology andhousing booms, the personal income tax kicker may yet come into play.

Personal Income Tax

Personal income tax collections were $1,488 million for the first quarter of fiscal year 2013, $7.5million (-0.5%) below the latest forecast. Compared to the year-ago level, total personal income tax

collections grew by 2.5% relative to a forecast that called for 3.1% growth. More recently, personalincome tax collections have come in higher than forecast during the current quarter, bringing themback in line with the September outlook.

Personal income tax collections are expected to remain weak until the April 2013 filing seasonwhen the gains seen in stock markets this year are realized for tax purposes. Further taxable capitalgains realizations will be generated by taxpayers attempting to move their assets ahead of potentialfederal tax increases in 2013.

(Millions)

2011 COS

Forecast

September 2012

Forecast

December 2012

Forecast

Change from

Prior Forecast

Change from

COS Forecast

Structu ral Revenues

Personal Income Tax $12,193.6 $11,956.6 $11,974.8 $18.2 -$218.7Corporate Income Tax $894.2 $842.6 $855.9 $13.3 -$38.4

All Other Revenues $944.2 $1,121.8 $1,130.4 $8.6 $186.2

Gross GF Revenues $14,032.0 $13,921.0 $13,961.1 $40.1 -$70.9

Offsets and Transfers $0.0 -$2.3 -$12.0 -$9.7 -$12.0

Administrative Actions1 -$23.1 -$4.4 -$4.4 $0.0 $18.7

Legislative Actions $0.0 $0.0 $0.0 $0.0 $0.0

Net Available Resources $14,008.9 $13,914.3 $13,944.7 $30.4 -$64.2

Confid ence Intervals67% Confidence +/- 3.3% $455.1

95% Confidence +/- 6.5% $910.3

1 Reflects cost of cashflow management actions, exclusiv e of internal borrowing.

2011-13 General Fund Forecast Summary

$13.51B to $14.42B

$13.05B to $14.87B

Table R.1


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Corporate Excise Tax

Corporate excise tax collections equaled $113.5 million for the first quarter of fiscal year 2013,$13.2 million above the September forecast. Compared to one year ago, net corporate receipts wereup 8.2% with the forecast calling for an 4.4% decline.

Corporate tax collections are expected to continue to decline throughout fiscal year 2013, as theyremain very large from an historical perspective. Very strong growth is expected during the 2013-15biennium, since corporate tax collections are prone to boom-bust cycles. However, growth rates,while large, will remain less than half of what has been seen during recent profit booms.

Other Sources of Revenue

All other General Fund revenues are expected to total $1,130.4 million for the 2011-13 biennium,an increase of $8.6 million (0.8%) relative to the September forecast. Most revenue sources aretracking ahead of the previous forecast, including large contributions from estate taxes, judicial-related revenues and liquor apportionment. Tobacco taxes have been lowered slightly to matchrecent collections.

Extended General Fund Revenue Outlook

Table R.2 exhibits the long-run forecast for General Fund revenues through the 2019-21 biennium.Users should note that the potential for error in the forecast increases substantially the further aheadwe look.

General Fund revenues will total $15,517 million in 2013-15, an increase of 11.1% percent from theprior period, and $62 million (0.4%) above the September forecast. In 2015-17, revenue growth isexpected to remain stable at 11.0%, followed by slower rates of 9% to 10% in subsequent biennia.The slowdown in long-run revenue growth is largely due to the impact of demographic changes.

Table R.2

General Fund Revenue Forecast Summary (Millions of Dollars, Current Law)

Forecast Forecast Forecast Forecast Forecast Forecast

2009-11 % 2011-13 % 2013-15 % 2015-17 % 2017-19 % 2019-21 %

Revenue Source Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg Biennium Chg

Personal Income Taxes 10,467.2 3.7% 11,974.8 14.4% 13,506.8 12.8% 15,134.8 12.1% 16,642.5 10.0% 18,406.9 10.6%

Corporate Income Taxes 827.6 20.9% 855.9 3.4% 1,052.9 23.0% 1,071.1 1.7% 1,036.0 -3.3% 1,050.3 1.4%

All Others 1,226.6 29.8% 1,130.4 -7.8% 957.4 -15.3% 1,015.7 6.1% 1,083.2 6.6% 1,167.4 7.8%

Gros s General Fund 12,521.4 6.8% 13,961.1 11.5% 15,517.1 11.1% 17,221.6 11.0% 18,761.6 8.9% 20,624.6 9.9%

Offsets and Transfers - (12.0) (105.0) (120.9) (128.8) (136.9)

Net Revenue 12,521.4 -2.2% 13,949.1 11.4% 15,412.0 10.5% 17,100.6 11.0% 18,632.8 9.0% 20,487.7 10.0%

Other taxes include General Fund portions of the Eastern Oregon Severance Tax , Western Oregon Severance T ax and Amusement Device T ax.

Commercial Fish Licenses & F ees and Pari-mutual Receipts are included in Other Rev enues


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(Millions)

2011 COS

Forecast

September 2012

Forecast

December 2012

Forecast

Change from

Prior Forecast

Change from

COS Forecast

Structural Revenues

Personal Income Tax $12,193.6 $11,956.6 $11,974.8 $18.2 -$218.7

Corporate Income Tax $894.2 $842.6 $855.9 $13.3 -$38.4

All Other Revenues $944.2 $1,121.8 $1,130.4 $8.6 $186.2

Gross GF Revenues $14,032.0 $13,921.0 $13,961.1 $40.1 -$70.9

Offsets and Transfers $0.0 -$2.3 -$12.0 -$9.7 -$12.0

Administrative Actions1 -$23.1 -$4.4 -$4.4 $0.0 $18.7

Legislative Actions $0.0 $0.0 $0.0 $0.0 $0.0

Net Available Resources $14,008.9 $13,914.3 $13,944.7 $30.4 -$64.2

Confidence I ntervals

67% Conf idence +/- 3.3% $455.195% Conf idence +/- 6.5% $910.3

1 Reflects cost of cashflow m anagement actions, ex clusiv e of internal borrowing.

2011-13 General Fund Forecast Summary

$13.51B to $14.42B$13.05B to $14.87B

13.92

15.45

17.18

18.79

13.96

15.52

17.22

18.76

$10

$11

$12

$13

$14

$15

$16

$17

$18

$19

$20

2011-13 2013-15 2015-17 2017-19

Comparison of General Fund Resource Forecasts($Billions)

September 2012 December 2012


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________________________________________________________________________________

$14.5

$14.6

$14.7

$14.8

$14.9

$15.0

$15.1

$15.2

$15.3

Dec 2010

Forecast

Mar 2011

Forecast

May 2011

Forecast

Sept 2011

Forecast

Dec 2011

Forecast

Mar 2012

Forecast

Jun 2012

Forecast

Sept 2012

Forecast

Dec 2012

Forecast

Billions

Combined General Fund and Lottery Fund Revenues (2011-13 BN)

Close of Session and Feb 2012 Rebalance Forecast

0%

1%

2%

3%

4%

5%

6%

80s Exp ansio n 90s Exp ansio n 00s Exp ansio ns To Date | 13-15

Private Employment Growth in Expansion

Total

Best 2 Years


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0.8%

0.9%

1.0%

1.1%

1.2%

1.3%

1.4%

1.5%

1.6%

Jan-47 Jan-55 Jan-63 Jan-71 Jan-79 Jan-87 Jan-95 Jan-03 Jan-11

Oregon Employment Share of U.S. Manufacturing

Recession

SIC

NAICS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

80

85

90

95

100

105

110

115

120

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Index

Value

Oregon Economic Indexes (Jan 2005 = 100)

Recession Probability (Right)Coincident Index (Philadelphia Fed)Total Nonfarm EmploymentUO Index of Economic IndicatorsOregon Index of Leading Indicators


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2011 2012 2013 2014

Employment

Baseline 1.13% 1.32% 1.56% 2.50%

Pessimistic 1.13% 1.25% -1.17% 0.90%

Optimistic 1.13% 1.46% 3.36% 3.89%

Personal Income

Baseline 5.43% 3.87% 3.47% 5.15%

Pessimistic 5.43% 3.61% 0.24% 4.31%

Optimistic 5.43% 4.49% 6.75% 6.56%

December 2012Alternative Scenarios

1,500,000

1,550,000

1,600,000

1,650,000

1,700,000

1,750,000

1,800,000

1,850,000

1,900,000

2000 2002 2004 2006 2008 2010 2012 2014

Total Nonfarm EmploymentRecession Optimistic Pessimistic Baseline

Jun 2012 Sep 2012 Dec 2012

Comparison of Last Three Forecasts

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Percent

Personal Income Growth

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Percent

Employment Growth


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-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012

Oregon Exports (Year-over-Year Change)Total Exports Total excluding Computer and Electronic Products

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Total Exp orts Chi na &

Malaysia

Japan & S.

Korea

North America Other Asia Eurozone Other Europe All Other

Oregon Export Growth2010 2011 2012 YTD


14/14

______________________________________________________________________________

(Millions)

2009-11

Biennium

2011-13

Biennium

2013-15

Biennium

Rainy Day Fun dBeginning Balance $112.5 $10.4 $61.8

Net Deposits3 -$103.4 $50.8 $186.1

Interest $1.3 $0.6 $2.2Ending Balance1 $10.4 $61.8 $250.1

Education S tability FundBeginning Balance $0.0 $5.1 $6.9Net Deposits $101.4 $184.1 $179.3

Interest2 $1.0 $0.6 $1.3

Withdrawals -$97.4 -$182.9 -$1.3

Ending Balance $5.1 $6.9 $186.2

Total Reserves $15.5 $68.7 $436.3

Footnotes:

1. Under current law , only 2/ 3rds of the beginning balance is available for withdraw al. Withdraw al subject to economic

and financial triggers.

2. Education Stability Fund interest is distributed to the Oregon Education Fund (75%) and the State Scholarship

Commiss ion (25%).

3. Includes transfer of ending General Fund balances, up to 1% of budgeted appropriations, as w ell as priv ate donations.

Oregon's Budgetary Reserves

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

85-87 87-89 89-91 91-93 93-95 95-97 97-99 99-01 01-03 03-05 05-07 07-09 09-11 11-13Proj.

13-15Proj.

15-17Proj.

17-19Proj.

19-21Proj.

Lottery Resources and Distributions ($ millions)

Other Dedications

Parks (15%)

Education (15-18%)

Debt Service

Discretionary Appropriations

Documents

Office of Economic Analysis, summary of November forecast