The quarterly revenue forecast the state released yesterday included few surprises: Oregon’s economy continues to clip along, although more slowly than earlier this year.
“Oregon continues to outpace the nation and the expansion endures,” wrote the state’s chief economist, Mark McMullen. However, “job growth in recent months has decelerated somewhat from the full-throttle rates seen in the past couple of years.”
State revenues are tracking forecasts because McMullen and his colleagues in the Oregon Office of Economic Analysis anticipated a slowdown in growth.
One trend state econonmists didn’t anticipate was a strong uptick in revenues from estate taxes—Oregonians dying with estates worth more than $1 million.
(Estate taxes begin at 10 percent on the first million and increase to 16 percent above $9.5 million.)
In the first year of the current two-year state budget cycle, estate tax receipts came in about 15 percent higher than forecast and over the two year period are now expected to reach nearly $280 million, exceeding the original estimate by 28 percent.
The month of August alone saw estate tax receipts of $48.6 million, which state senior economist Josh Lehner says is more than twice the previous highest month on record.
Even with increased tax planning, economists expect the state to continue to reap the benefits of generational change, particularly as the strong economy has boosted the values of financial assets such as stocks and bonds and the value of real estate.
“The large Baby Boomer generation is aging into their retirement years today and into their later ages in the coming decades,” their forecast reads. “As such there will be an increase in the number of Oregonians passing away in the relatively near future.”