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Willamette Women Democrats host Oregon's chief economist and lots of candidates

REVIEW PHOTO: ANTHONY MACUK - Mark McMullen, Oregons chief economist, talks about the state budget during a meeting last week of the Willamette Women Democrats.Willamette Women Democrats put the spotlight on Oregon's economy during the group's meeting in Lake Oswego last week, but not before recognizing all of the candidates in the room who just happen to be running for state or regional offices.

Joelle Davis, Rob Wagner, Greg Macpherson and Daphne Wysham, all of whom are seeking to be appointed to the Senate District 19 seat being vacated by state Sen. Richard Deviln, were there. So was Lynn Peterson, a former Lake Oswego city councilor and Clackamas County chair, who is running for Metro chair; Pamela White, who is running for Clackamas County Clerk; and Rachel Prusack, who will try to oust incumbent state Rep. Julie Parrish in House District 37.

The meeting also included a pitch to support Ballot Measure 101, which would extend an existing tax on hospitals to help fund the state's Medicaid program. The expansion was part of a health care bill that passed during the most recent legislative session.

In an attempt to stop the expansion, a group of Republican lawmakers gathered enough signatures to refer the issue to voters, and it will appear on the ballot in January. A yes vote will uphold the expansion, while a no vote will block it.

The event's primary speaker was Mark McMullen, who serves as chief economist for Oregon's Office of Economic Analysis — the agency that provides nonpartisan revenue forecasts for state budgeting.

"We're really focused on the revenue side of the picture," he said.

McMullen's presentation focused on the state of Oregon's economy and providing answers and explanations for some of the questions he said he often hears. The first of those questions: Is Oregon due for a recession?

"We're eight years into economic expansion," he said, "but there's no such thing, really, as being 'due' for a recession."

That doesn't mean one couldn't happen, he said — if the overall U.S. economy went into recession, for example, Oregon would be dragged down with it. But, he added, state and federal forecasters aren't expecting that to happen.

Instead, he said, the current outlook points to "more of the same" — economic growth throughout the state, albeit at a slower rate than in Oregon's past. The state still boasts a large manufacturing sector, he said, which tends to grow the state's economy faster than the national average, but that advantage is leveling out.

"We're kind of reaching middle age," he said, "and everyone who reaches middle age starts to slow down a bit."

That's not necessarily a bad thing, McMullen said, but it doesn't do any favors for lawmakers and state employees who are trying to resolve Oregon's ongoing budget woes. Tax revenue should keep rising modestly, he said, but there won't be any sudden surges in the state's income.

"Today we have a structural budget deficit, meaning what we're doing now isn't sustainable," he said. "The problem with Oregon is we've reached an extreme with our tax system relative to other states."

Oregon's tax system stands out because of the lack of a sales tax and relatively low property tax, but McMullen said the result is a system that is "very equitable, very effective, but also very volatile."

Oregon's tax burden falls relatively equally across income levels, he said, while other nearby states such as Washington tend to have a more regressive distribution.

McMullen was also prompted by the audience to address the issue of the PERS funding crunch, and he said the solution would ultimately have to be lowering service levels or cutting taxes.

"The courts have made the problem simple," he said, "because you just can't touch anything that's already been earned."

One audience member asked about the potential local impact of the tax reform bill currently working its way through Congress. One of the provisions under discussion would be to eliminate several deductions for state and local income taxes. McMullen said that would have the effect of boosting Oregon's revenue, but the gains would be negated by the state's kicker law.

"Taxes down at the federal level means Oregon taxes go up," he said, "which would be great if we could keep any of it."

Contact Lake Oswego Review reporter Anthony Macuk at 503-636-1281 ext. 108 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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