SALEM — Oregon’s economists told lawmakers Wednesday the state’s economy and government revenue continues to grow at a strong pace as the state rebounds from the recession.

However, the economists warned that growth will slow going into the next two-year budget that begins in mid-2017.

“Oregon’s economy continues to grow at a healthy pace, as do our primary sources of tax revenue, keeping up every bit with our expectations we’ve laid over the last year or two,” said state economist Mark McMullen.

Economists expect the government will receive nearly $61 million more in general fund and lottery revenues in the current two-year budget than they had projected in the last forecast in December, according to a document from the Legislative Revenue Office. The latest forecast is for $19.5 billion in total state revenue.

At the same time, McMullen said, Oregon is getting close to what economists would consider “full employment” and “that’s when we’re going to start to see things slow.”

McMullen also reiterated a warning from previous forecasts that Oregon is vulnerable to national problems in the manufacturing sector. “It’s obvious manufacturing is weak,” McMullen said.

McMullen said problems in the stock market that cut into Oregonians’ investment income, combined with the stronger exchange rate for the U.S. dollar, will likely weaken state revenue from personal and corporate income taxes in upcoming budgets. Oregon’s exports from non-technology sectors are slackening, with export growth in the first quarter expected to be nearly 20 percent lower than a year ago, according to a presentation by the state Office of Economic Analysis.

“This is the most depressing number that’s out there now, which is the growth in our exports of non-technology products,” said McMullen, who added that this particularly impacted agricultural and food product exports.

Gov. Kate Brown struck a similarly cautious tone in her statement on the forecast.

“I am pleased to see that job growth is steady and Oregon’s economy is likely to remain stable through the remainder of the biennium,” Brown said. “Although state revenues are on track to fulfill important commitments in education and other critical services, my optimism is tempered by longer-term dynamics in the forecast that call for caution. I will work with legislative leadership to build reserves for future needs.”

Democratic leaders in the Legislature also pledged to maintain state budget reserves and handle the budget prudently.

“The Legislature will continue budgeting wisely — making needed investments that will help Oregon families and communities thrive, while also maintaining a strong reserve fund,” House Speaker Tina Kotek, D-Portland, said in a statement.

“The forecast has given us a few extra pennies for this biennium,” Senate President Peter Courtney, D-Salem, said in a written statement. “We’re OK for now. We need to keep working. We can address our budget priorities and finish the session on time.”

Republicans were more pessimistic.

“Years of one-party rule plagued by overspending and government waste and an assault on small businesses has left us with a bleak economic outlook that needs to be addressed now,” Senate Republican Leader Ted Ferrioli, R-John Day, said in a statement.

House Republican Leader Mike McLane, R-Powell Butte, said in a written statement there were “storm clouds on the horizon.”

“For the moment, the sun is still shining in Oregon,” McLane said. “Now it’s up to the Democrats in the Legislature to decide if they are going to put our long-term economic health at risk through the reckless pursuit of a partisan agenda and fundamentally flawed policies.”

The Capital Bureau is a collaboration between the Pamplin Media Group and the EO Media Group. Hillary Borrud can be reached at 503-364-4431 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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