Republican lawmakers slam state tax collections this week amid bullish new income forecasts that predict continued economic growth and strong consumer income and spending.
In a statement by House Republicans, the new forecast suggests that state revenues will continue to exceed expectations, reaching record levels and triggering another boost.
But higher incomes mean higher taxes, GOP lawmakers warn, leading to record collections for the state. And economists say it also comes with an increased risk of the economy “overheating” due to inflation.
“It is clear from these strong earnings forecasts that Oregonians are incredibly resilient and should be commended,” said Republican House Leader Christine Drazan of Canby.
âMany people have gone through difficult circumstances to find jobs, helping our economy to rebound. The employment levels returning to the years before the pandemic are just what families and businesses needed. Sadly, inflation is a harbinger of an impending slowdown and we must proceed with caution with our state budget. “
Drazan criticized the state government’s performance, saying agencies continue to fail in basic services for students, families and businesses despite record spending and budget surpluses.
Unsurprisingly, Oregon Democratic Governor Kate Brown presented a slightly more optimistic interpretation of the November income forecast on Wednesday. She said the report, along with the news that the statewide unemployment rate has fallen to 4.4%, confirms Oregon’s “strong momentum for the resumption of the economic impacts of Covid -19 “.
âWith a healthy closing fund balance, we have the opportunity to make targeted investments to fill the gaps of Oregonians still in need,â she said. “We must continue to focus equity in our recovery efforts to ensure that communities disproportionately affected by the pandemic due to historical disparitiesâ¦ benefit equitably from Oregon’s strong economic recovery.”
She said she had tasked a subgroup of the state’s Racial Justice Council – which includes business owners and workers – to develop a workforce investment package for the short session in February aimed at helping people return to work and improve their career paths.
She said she would continue to push lawmakers to find policy solutions to help people access and maintain stable housing and would encourage them to leverage state resources with the billions expected from the bipartisan bill on infrastructure to boost Oregon’s families, businesses and workers in their continued recovery.
âAs we recover, we need to support communities that have been disproportionately affected,â Brown said. “With these critical investments from the Biden-Harris administration, we can now ensure these communities have access to well-paying jobs, affordable broadband, reliable public transportation and other essential resources.”
New Senate Republican Leader Tim Knopp of Bend said on Wednesday that every quarterly income forecast since the start of the pandemic has exceeded expectations – but the most recent recognizes the impact of rising inflation on Oregonians results.
âInflation is devastating for working families, but lines the pockets of the government,â Knopp said. âThe explosive spending on federal government loans has given us more money than we know what to do with, while most workers have had effective pay cuts because everything is more expensive.
âYet the Democrats’ vision continues to be tax, borrow and spend. It’s time to ease the family budget of working Oregon’s.
GOP leaders say Oregon Democrats have consistently rejected tax relief measures that would have benefited Oregon workers, including denial of a student loan and property tax relief for workers. veterans and refused to waive taxes on Covid relief stimulus checks.
“The state continues to get bigger budgets, but working families are struggling to make ends meet because of inflation,” said Senator Lynn Findley, R-Vale, member of the Senate committee finances and income.
Findley has vowed to reintroduce legislation to cut taxes for daily necessities in next year’s short session.
âOregon Democrats have denied any opportunity to give working families a break. Prescription drugs, diapers and feminine hygiene products should not be taxed.
Oregon’s short legislative session in 2022 will last 35 days starting Tuesday, February 1.
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