Perspective from the 19^th Hole is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus to use an image from my favorite sport, golf.  Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all my professional positions, including as press secretary in Washington, D.C. for a Democrat Congressman from Oregon (Les AuCoin), as an Oregon state government manager in Salem and Portland, as press secretary for Oregon’s last Republican governor (Vic Atiyeh), and as a private sector lobbyist.  This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.  I could have called this blog “Middle Ground,” for that is what I long for in both politics and golf.  The middle ground is often where the best public policy decisions lie.  And it is where you want to be on a golf course.

Back when I was a lobbyist in the State of Oregon, there would have been a major event last week for me and my firm’s clients.

This:  State government economists appeared before a joint legislative committee to unveil the latest quarterly forecast of tax revenue available for the state in the next “biennium,” an unusual word that means the next “two years, 2025-27).”

This time, during what lobbyists call “the interim between legislative sessions in Salem,” few paid much attention.

For me, a new revenue forecast always was a critical development for at least two reasons:

1. How much money is available sets the stage for the ONLY decision lawmakers in Oregon must make as they meet in a regular legislative session — approve a new two-year spending plan for such issues as health care, higher education, K-12 education, and public safety (including state [police and prisons].

• The predicted total also sets the stage for another major decision —  how much to spend and how much to raise in taxes, if any of the latter.

I remember many days when, along with a bevy of other state lobbyists, I waited impatiently in the hearing room for the next revenue forecast to be made public. 

During various recessions, the event was even more critical because state legislators would begin to understand how much they had to cut in state government, many of which were important to citizens.  Decisions about what to cut are often more difficult than decisions about what new spending makes sense.

As for the U. S. economy, here’s what state economists said:

“…it remains in an inflationary economic boom, albeit one that has cooled somewhat over the past year and a half.  Real GDP is growing above potential.  Ongoing employment and income gains allow households to spend even as prices are rising faster than the Federal Reserve’s target.

“Given the strong economy, the Fed has yet to cut interest rates.  The outlook indicates the Fed will begin to reduce interest rates late this year, only after further slowing in inflation is seen in the data.”

As for the outlook in Oregon, the economists added:

“The Oregon economic outlook remains solid, but this cycle has been different.  The state’s topline population, employment, and income growth is in the middle of the pack across all states.

“However, the economic outcomes for individual Oregonians have been noticeably stronger than the nation.  While still lower than the U.S., Oregon’s per capita income and average wage are at their highest relative point compared to the nation in decades.

“A record share of working-age Oregonians have a job.  And the state’s labor force participation rate has risen the second most across all states.

“The major economic forecast change is a larger U.S. population due to increased international immigration.  This boosts the national employment, income, and spending forecasts.

“The Oregon population forecast remains essentially unchanged, and Oregon is not a major port of entry for international immigrants.  As such, the local impact of the U.S. forecast changes is smaller.  That said, a larger U.S. economy boosts non-wage Oregonian income, like investments and proprietors’ income, as local firms sell more goods and services into that larger customer base elsewhere in the country.”

So, lawmakers will have more to spend for the 2005-27 biennium when they return to Salem next January.  This is a summary of the projections:

• About $533 million more in the “general fund” arriving from individual taxpayers, which sounds like a lot, but only up about 1.6 per cent from the last forecast.
• About $588 million in corporate tax revenue for the “general fund,” up about 26 per cent from the last forecast, with most of the increase due to federal tax policy changes.
• Almost the same projection of lottery revenue as the last forecast – lottery revenue goes to education, economic development, and other specific purposes outlined in state law – so functions just like the “general fund”…another bucket of money.

This means the 2025 Legislature is not likely to face major debates over tax increases, even if some Democrats – that party is likely to remain in charge in both the House and Senate – would like to have such debates.

Instead, the basic issue will be what it always is:  How to allocate state revenue and work to assure that spending will achieve what it is supposed to achieve, a tough task given the reality that expenditures and revenue must be in balance.  No deficit spending.

That’s a key distinction from the federal government where deficit spending always occurs.

One more issue is just around the corner for Oregonians.  Current Oregon law requires legislators to return money to taxpayers if revenue is more than 2 per cent over previous projections.  This has come to be called “Oregon’s kicker law.”

In the past, some legislators have said they don’t like the law, so have tried to repeal it.  To no avail.

It is popular – many Oregonians what their “kicked back” money.

Enough for now because, in retirement, I am heading to the golf course, not to review more tax and spending detail.