From Senator Whitsett’s May 12, 2011 Newsletter
Oregon’s May economic forecast demonstrates the breadth and the depth of the ongoing recession. Although the Oregon employment figures show a marginal improvement, the sad fact is that our state has no more private sector jobs than it did in the year 2000. Moreover, our per capita income continues to fall behind the national average and the rate of negative change is accelerating.
The forecast further demonstrates the inaccuracies of Oregon’s forecasting methodology. Long term revenue predictions for the past four years have consistently been grossly overestimated. Short term predictions have been somewhat more accurate and have reflected the reality of the economic decline.
The most recent prediction for the second quarter of 2011 is for a fourteenth consecutive quarter of real revenue loss. That reduction is equal to yet another $40 million. The sum of the loss of state revenue for the eight quarters beginning at the end of 2009 legislative session and ending June 30, 2011 now exceeds $1.2 billion. This failed prediction follows well more than a billion dollar over-estimation of revenue in the previous 2007-09 budget period. A billion dollar under-estimation of forecasted revenue in the 2005-07 budget periods resulted in more than a billion dollars in kicker tax refunds.