Oregon August Revenue Forecast Released

Posted by Pam Leavitt on August 27, 2026

Wednesday morning Oregon’s Chief Economist Carl Riccadonna and Senior Economist Michael Kennedy presented their economic and revenue forecast to the House and Senate Committee on Finance and Revenue. The outlook has improved slightly since last quarter, as Oregon’s economy shows modest growth, and those with investments in the stock market are seeing unprecedented returns.

Oregon’s August 26, 2026, economic and revenue forecast was broadly stable but slightly more optimistic for state revenues. Economists projected $55 million more for the current 2025–27 budget cycle and $538 million more for the 2027–29 biennium than in the May forecast. The improvement is driven mainly by stronger personal income-tax withholding, while corporate and estate-tax collections are weakening.

Main revenue changes

• The current biennium’s projected General Fund ending balance rose to approximately $400 million; the 2025–27 biennium ends June 30, 2027.
• About $400 million of the $538 million increase expected for 2027–29 comes from better-than-expected personal income-tax withholding.
• Corporate income-tax payments came in below expectations, and Corporate Activity Tax collections also underperformed. The combined corporate income-tax and CAT projections reportedly fell by about $187 million.
• Estate-tax collections continue to trail expectations, while higher interest earnings are providing some additional revenue.
• Lower corporate-tax projections put the state just below the threshold for triggering a corporate kicker.

State economists described Oregon’s economy as resilient and said its growth has nearly caught up with the national economy. Oregon’s first-quarter growth was about 2.4%, compared with 2.7% nationally, a much smaller gap than the roughly one-percentage-point difference seen over the preceding year.

The positive revenue revision should not be read as an across-the-board strengthening of the economy:

• Oregon’s unemployment rate remained 5.2% in July, above the national rate of 4.1%.
• Persistent inflation and elevated energy prices remain threats to growth.
• Economists flagged the possibility that high technology and artificial-intelligence-related financial-market valuations could reverse and hurt economic activity and revenue.
• The corporate-tax decline appears more related to businesses changing the timing or treatment of tax payments and refunds after federal tax-law changes than to an obvious deterioration in corporate activity.

The forecast gives lawmakers roughly $600 million more in combined projected resources across the current and next biennia than anticipated in May, but much of that improvement is concentrated in personal income-tax receipts rather than broad-based business growth. The forecast will help shape the 2027 legislative session’s budget decisions; lawmakers are scheduled to receive another forecast in November.

Posted in Advocacy on the Move, Oregon Advocacy.