Oregon forecast: Recovery coming, but losses will drag on

SALEM — Oregon state Economist Tom Potiowsky issued his latest revenue and economic forecast today and told lawmakers he expects the deep recession to begin easing its grip on Oregon this fall.

Potiowsky warned that it would be an extremely slow recovery. He said joblessness would remain high for some time to come and it could take until early 2013 for state employment to return to pre-recession levels.

Oregon’s unemployment rate hovered at 11.9 percent in July — tied with California for fourth-highest in the nation — but Potiowsky said he thinks that leveling off shows that the economic slide has slowed.

“The sense of free fall is over,” Potiowsky said in a presentation to the House and Senate revenue panel. “We just don’t have the sense of the floor dropping out from under us like we did before.”

In his presentation to state lawmakers, Potiowsky issued his latest quarterly forecast, which showed that general fund revenues are now predicted to be $139 million lower than had been forecast at the close of the 2009 legislative session in June.

He said, however, that that drop isn’t cause for alarm and is far less than the $600 million quarterly declines the state saw during the recession that gripped Oregon earlier this decade.
Lawmakers will have more forecasts and likely a January statewide election vote on a $733 million tax hike before they meet again next February to rebalance the state budget.

If the tax hike is rejected by voters, lawmakers then would have to figure out a way to balance the budget through cuts or finding other ways to keep the state in the black.

Potiowsky, meanwhile, said analysts do believe there is cause for optimism that the overall economy has hit bottom and is slowly coming back up.

“We are going to see signs of recovery this fall,” he said. “It will show up in terms of things like home sales and consumer spending.”

— The Associated Press

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