Oregon Business & Industry Responds to June Economic Forecast
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Nathaniel Brown, government relations representative:
Elected leaders must focus on long-term job restoration to restore state revenues
Today, state economists confirmed what Oregon Business & Industry (OBI) and our members have been experiencing for several weeks: Oregon is experiencing a severe recession that will have long-term negative impacts, including severely reduced public services, if the state doesn’t immediately begin to focus on how it can support Oregon businesses in bringing back lost jobs.
“We are an income-tax-dependent state,” said Sandra McDonough, OBI president & CEO. “The single most effective way for the state to alleviate the projected budget shortfall is to get people safely back to work, so they are in a position to pay the taxes we depend upon. This means continuing the process of safely and systematically reopening Oregon’s economy, but also working with business owners and operators on strategies to repair the damage that many industries have sustained. Our goal should be not only to reopen, but also to rebuild and restore our state’s economy so that, at the end of the day, Oregon emerges stronger than ever before.”
McDonough noted that almost 400,000 Oregonians have filed for unemployment since mid-March, when the COVID-19 crisis began. “By far, the vast majority of those individuals worked in the private sector. The state must focus on how it can support business in the monumental task of bringing those lost jobs back, so Oregonians can start earning incomes again – which in turn will generate tax revenue for important public services, like education, our social safety net and health care.”
State economists predicted revenues could fall as much as $2.7 billion in the current biennium, and as much as $10 billion short of budget through fiscal year 2025, which will mean cuts to critical state programs. While the state’s reserve funds could blunt the immediate impact of the revenue shortfall, McDonough said the state should start now to rein in spending and prioritize programs, so that Oregonians can continue to receive critical services.
“Businesses across the state have already made tough decisions about spending,” McDonough said. “Reductions in state budgets now could avoid deeper cuts later, ultimately protecting both critical services and public-sector jobs. We urge the governor and legislative leaders to begin to plan now for targeted reductions that will yield much needed savings for the future.”
McDonough reiterated the need to bring business leaders to the table to develop a strategy for restoring and rebuilding Oregon’s economy.
“We have told Gov. Brown that Oregon businesses are prepared to work with her on this daunting task of repairing our state’s economy and putting people back to work. We look forward to doing so,” she said.
Oregon Business & Industry is the largest business association in the state, advocating on behalf of nearly 1,600 businesses for a strong and healthy economic climate in Oregon. Our team represents the voice of business in the state capitol, state and federal regulatory agencies, Congress, and the courts.