Since our office released the March revenue forecast, we’ve been involved in numerous discussions about how exactly the forecast has evolved in recent months. In particular, how did the forecast go from seeing a hit to near-term revenues due to the impacts of the federal Tax Cuts and Jobs Act (TCJA) to actually showing higher total resources? What follows is an effort to clarify the underlying, and offsetting changes to the outlook.
It should be noted that there is a reduction in expected state revenues in 2017-19 from TCJA mostly due to the quirk in Oregon law related to repatriation, the bonus depreciation or expensing, and the 20% pass-through deduction. However, these declines have essentially been offset by four other forecast changes, as seen in the dark blue bar below. Year-end accounting, which includes unspent allocations from the previous biennium, increases total available resources via a larger beginning balance for the budget.
Read more here: https://oregoneconomicanalysis.com/2018/03/01/behind-the-march-revenue-forecast/
