Local politics, the county, and the world, as viewed by Tammy Maygra

Tammy’s views are her own, and do not necessarily reflect the views of Bill Eagle, his wife, his pastor, Tammy’s neighbors, Brady Preheim, Marty Rowe, President Elon Musk, President Trump, Stephan Miller, Mike Johnson, J.D. Vance, Vlad Putin, Ted Cruz, Kamala Harris, Trump’s MAGA followers, or my neighbor’s dogs. This Tammy’s Take (with the exception of this disclaimer) is not paid for or written by, or even reviewed by anyone but Tammy and she refuses to be bullied by anyone. See Bill’s Standard Disclaimer

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Oregon’s Budget

 

 Oregon's budget isn't actually broke, but it faces significant shortfalls due to sluggish economic

 growth leading to lower tax revenue, coupled with the mandated return of excess tax revenue as

"kicker" refunds. Federal tax cuts that automatically adopt to Oregon's tax code, combined with

decreased job growth, manufacturing and construction declines, and increased unemployment, are reducing the state's income and taxing capacity. This leaves the state with less money to fund

essential services, despite potentially healthy economic conditions projected for the latter part

of the biennium.

 

The state's projected general fund ending balance for 2025-27 has been revised from $473 million

down to negative $373 million, largely due to the Trump bill. President Donald Trump's "One Big

Beautiful Bill" is projected to take a significant bite out of Oregon's budget, according to the

latest quarterly revenue forecast from the state Department of Administrative Services (DAS), which projects an $888.2 million.

 

The loss is slightly offset by state-level changes such as a small increase in projected business

tax revenue, but the net result is still a loss of about $621 million in general fund dollars. The

decrease tips the 2025-27 biennium into negative territory, with a projected general fund deficit

of $373 million.

 

The reason the Trump bill has such an immediate and precise impact is because Oregon is one of

 five  states that rely on the Federal Taxable Income (FTI) figure to calculate their own taxable in

come rules, according to the report. The Trump bill makes a wide range of changes to how the FTI

is calculated, so those changes have an immediate effect on Oregon's expected state tax revenue.

 

For example, a new provision in HR 1 allows taxpayers to deduct $12,500 for overtime pay from

their federal taxable income, which means the same goes for their state taxable income. That

change alone

accounts for $221 million of the Oregon general fund dollars lost in 2025-27, according to the

report.

 

National GDP growth is predicted to drop to 1% by the end of the year, increasing the risk of a

recession — forecasters currently put the odds at 35%, according to the report. National job

growth has slowed down by 75% from a year ago, and inflation is expected to rise to 3.1% later in

the year.

 

Tammy

 

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