SALEM, Ore. -- The state may have enough money socked away to handle a $180 million revenue shortfall, so legislators can start worrying about the next budget they have to build -- one that may not have federal stimulus dollars.
A revenue forecast Monday showed income tax revenues are expected to slacken the next 16 months as the state works through the two-year budget that expires in mid-2011.
That means the Legislature during its current four-week session will have to rejigger the budget, but House Speaker Dave Hunt suggested Monday that won't be heavy lifting. Legislators can draw on $220 million expected in rainy-day and school aid reserves, and the budget has a $79 million ending cushion, Hunt said.
There's also widespread support for another budget-fixing measure: curbing tax credits for a green energy program that has fostered the state's wind energy program. That could offset $55 million of the shortfall.
"For this biennium, we are likely to squeak by," said Rep. Phil Barnhart of Eugene, chairman of the House Revenue Committee.
State Economist Tom Potiowsky told the committee the state's economy has emerged from recession, but not strongly. Job growth is expected by spring, but this year's totals will still be lower than those of 2009, he said.
He said economic activity will hit a "soft patch" this year, although he doesn't expect a return to recession. Companies have been rebuilding inventories at a pace that can't be sustained, and the effect of federal stimulus dollars will begin to wear off, he said.
That will give legislators reason to think about the next two-year budget, which will be built next year. The current budget includes more than $900 million in federal stimulus dollars. Aid of that magnitude isn't expected again.
Potiowsky said he'd done some analysis to see what state revenue growth would have to be to plug such a gap. "It would have to be the highest on record," he said.
