Oregon Revenue Forecast Projects $372.7 Million Deficit Over Next Two Years

Salem, Oregon– Oregon’s latest economic and revenue forecast projects a $372.7 million deficit for the 2025-27 state budget, according to officials with the Department of Administrative Services.

Carl Riccadonna, state chief economist, and Michael Kennedy, senior economist with the DAS Office of Economic Analysis (OEA), presented the updated figures Wednesday to the legislative committee on finance and revenue. The quarterly revenue forecasts provide public information on expected revenues and are used to guide state budgeting.

The August forecast reviewed prior projections, the legislatively approved budget, and the potential effects of federal legislation H.R.1. The legislature concluded the 2025 session with $472.8 million in available funds intended to provide a buffer against economic changes. According to Oregon officials, the passage of H.R.1 is now expected to reduce state revenues by $888.2 million over the 2025-27 biennium.

As a result, the forecast projects the General Fund ending balance will decrease by $621.1 million due to economic adjustments, H.R.1, and changes to kicker credits. This shifts the projected balance from a $472.8 million surplus to a negative $372.7 million.

The OEA provides forecasts for Oregon’s major revenue sources, including personal and corporate income taxes, lottery revenue, and the corporate activity tax. These forecasts also include population trends for corrections and the Youth Authority. They are used across state government and by the public to inform budget and policy decisions.

Key elements of the revised forecast:

Economic adjustments: $621.1 million reduction in the General Fund due to changes in economic conditions, federal legislation, and kicker credit adjustments.

Projected General Fund balance: Moves from a previously projected $472.8 million surplus to a negative $372.7 million.

Major revenue sources: Forecasts cover personal and corporate income taxes, lottery revenue, and the corporate activity tax.

The Office of Economic Analysis posts quarterly forecasts to ensure transparency in the state budgeting process and to provide information for lawmakers and the public on revenue trends and potential economic risks.