A more-of-the-same Oregon economic forecast will have little immediate impact in an off year of the budget cycle. The report given to the Legislature on Wednesday likely won’t change any current legislation, but it holds the seeds of future education-related discussions.
The quarterly Economic and Revenue Forecast estimated net general fund revenue for 2023-25 increased $86 million from the last forecast and went up $72 million for 2025-27. Farther out, projections start to tail down, but economic factors are mostly positive in the near future.
“The economic revenue outlook is stable,” said state economist Mark McMullen.
The forecast lets legislators know whether the state has enough money for the current budget and how much it might have for the next budget in 2025. For education advocates, it offers an idea of how much might be available for the next State School Fund as well as targeted education investments.
Only a few bills this legislative session call for additional education funding. Gov. Tina Kotek is pushing the most prominent one, House Bill 4082 to provide $50 million for summer learning. This report shows there is a little more money available for that.
This session is setting up school funding discussions for 2025, though, with several bills that examine the State School Fund formulas. It’s easier to have those discussions when the economic forecast is encouraging rather than when it is screaming that cuts are coming.
If things were to turn down suddenly, the state continues to add to its reserve accounts. Nearly $3 billion in savings projected by the end of this budget cycle provides a substantial cushion.
In other positive news for schools, forecasts for the corporate activity tax increased $43 million from the previous forecast for 2023-25 and $103 million for 2025-27, according to the Legislative Revenue Office. The tax pays for the Student Success Act investments, raising a projected $2.8 billion for this cycle.
More concerning for schools, the forecast predicts Oregon’s school-age population will decline by 1.1% annually for the foreseeable future. Declining enrollment is a considerable concern for many districts’ budgets.
The next forecast is scheduled for May 29.
– Jake Arnold, OSBA
[email protected]
