OEA warns of $621 million revenue downgrade; HR 1 drives large near‑term hit to Oregon forecast

SALEM, Ore. — On Aug. 27 the House Committee on Revenue met jointly with the Senate Finance & Revenue Committee to hear the Office of Economic Analysis (OEA) update Oregon’s September economic and revenue forecast. OEA officials said the state’s revenue outlook has weakened by about $621 million and that Legislative Revenue Office scoring of federal tax changes (commonly referred to in the hearing as HR 1) shows an $888 million negative impact for the current biennium.

“The bottom line is that the ending balance has fallen $845,000,000,” OEA analyst Michael Kennedy said during the presentation, summarizing the combined effects of weaker closing‑biennium receipts and the changes fed through by HR 1. Chief economist Carl Riccadonna told the committees that while payroll revisions show a net loss of roughly 25,000 jobs over the past year, robust financial‑market gains (and resulting capital‑gains taxes) have helped offset some withholding shortfalls.

Why it matters: The forecast drives the state’s budget outlook and choices about reserves and spending. OEA and LRO staff told lawmakers that HR 1’s major provisions — including temporary exclusions for taxed overtime and tips, accelerated bonus depreciation and new R&D expensing — produce large near‑term revenue reductions because of timing and sunset…