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THE ASTORIAN • TuESdAy, SEpTEmbER 6, 2022
OPINION
editor@dailyastorian.com
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GUEST COLUMN
Oregon economists on recession watch
D
ifficult days lie in wait for Ore-
gon legislators and our new
governor.
That was clear from the somber pre-
dictions delivered last week by state
economists, regardless of whether you
embrace the positive view of state House
Majority Leader Julie Fahey, D-Eu-
gene, or the warning words of House
Republican Leader Vikki Breese-Iver-
son, of Prineville. They
were among the leg-
islative leaders who
quickly issued statements
responding to the quar-
terly economic and reve-
nue forecasts.
State agencies have
DICK
been working on their
HUGHES
2023-25 budget requests.
Yet there is tremendous
uncertainty about the economic outlook
and resulting state revenues — far more
uncertainty even than usual, according to
State Economist Mark McMullen.
“Economists are really on recession
watch right now, and they’re increasingly
pessimistic,” he told the state Senate and
House revenue committees at their vir-
tual meeting on Wednesday.
Essentially, it’s a coin flip as to
whether a recession is headed Oregon’s
way. The Oregon Office of Economic
Analysis, which McMullen leads, is suf-
ficiently concerned that he and senior
economist Josh Lehner for the first time
presented contrasting forecasts. One is
what they think will happen: a “soft land-
ing” from the current high inflation and
other tough economic factors. The other
is the most likely scenario if their first
forecast is wrong: a mild recession in
Oregon starting late next year.
In both scenarios, state government
has more money to spend than previ-
ously projected for the current budget
period but less than expected for subse-
quent budgets. The multimillion-dollar
differences vary based on the scenario.
Sen. Lee Beyer, D-Springfield, who is
retiring, said the 2023 Legislature should
look cautiously at the state budget.
Beyer, who chairs the Senate reve-
nue committee, said the recessionary sce-
nario resembles the 2001 Legislature:
“Adjournment followed by five special
sessions, cutting the budget each time.”
Budget and consequent policy deci-
sions can profoundly affect individual
Oregonians. When the 2023-25 budget
begins next July, the state will possess its
largest reserves on record. Yet those will
Nam Y. Huh/AP Photo
Inflation has led to higher costs for consumers.
BUT IF A RECESSION
DOES OCCUR, THE
ECONOMISTS PREDICT
IT WILL BE ‘RELATIVELY
MILD IN SEVERITY, AND
SHORT IN DURATION.’
be inadequate to avoid program cuts and
layoffs if the pessimistic scenario comes
to pass. And people depend even more
on government services during an eco-
nomic downturn.
Those needs are evolving. The econ-
omists said in their written report that
in the current decade, “based solely on
demographics of Oregon, demand for
public services geared towards children
and young adults will likely decline or
increase only at a slower pace, whereas
demand for elderly care and services will
increase rapidly.”
Meanwhile, inflation in the West was
running at 8.3% in July. Several years
will elapse before the U.S. gets back
down to the Federal Reserve target of
2%.
The continuing inflation dramati-
cally affects local and state government,
as well as the rest of us. The state econ-
omists wrote: “There are a number of
license fees, limits on legal damages,
amounts distributed to programs and the
like that are indexed annually for infla-
tion. All of these will increase faster than
usual next year, and likely the year after.”
Next year’s increase in the Oregon
minimum wage will be tied to the con-
sumer price index, so the wage likely
will rise 5%. Many public employee pay
raises also are negotiated with an eye on
inflation.
Such increases, along with the rising
price of goods, had two revenue commit-
tee members — Republican Rep. Greg
Smith, of Heppner, and Rep. E. Werner
Reschke, of Malin — wondering whether
the state would have enough money to
fulfill its various contracts.
Renters also will feel the inflation-
ary effects. This month the Office of Eco-
nomic Analysis will announce the maxi-
mum allowable residential rent increase
for 2023. It likely will be in the mid-14%
range.
A bit of good news for Oregonians:
The size of the income tax “kicker”
headed their way in 2024 keeps growing,
so consumers will have money to spend.
But if a recession does occur, the
economists predict it will be “relatively
mild in severity, and short in duration.
Oregon loses 57,000 jobs, for a decline
of 2.9%. Such losses are a bit more than
the 1990 recession but noticeably less
than the dot-com or housing busts.”
dick Hughes has been covering the
Oregon political scene since 1976.
LETTERS TO THE EDITOR
Giant step back
I
remain a supporter of the decision to
relocate the Seaside High School to high
ground. It was sensible, given what we
now know about the tsunami flood risks at
that site.
For those same reasons, I oppose the
city of Seaside rezoning the adjacent
“North 40” parcel for child care, social ser-
vices and affordable housing. Concentrat-
ing lower-income families into our high-
est-hazard zone is a giant step back in our
efforts to become more resilient.
PATRICK CORCORAN
Astoria
Hospitality
W
e wanted to say “thank you” to the
city of Seaside for the hospitality
over Hood to Coast weekend. From all the
businesses, to a really sweet gentleman
who bought our whole van Dutch Bros. as
we left Sunday, we appreciate the oppor-
tunity to have done the race over the past
11 years, and to finish in a town we love to
support.
We hope that all the participants of
Hood to Coast/Portland to Coast take the
time to say both “thank you” in person,
and financially, for letting us take over the
town for the weekend.
LIBBY MONGUE-WYMORE
Vancouver, Washington
People over profits
Safeway store. Bend, Oregon. Another
AR-15 shooting. Another young male.
Sure, the shooter might have been men-
tally ill, anyone would have to be to kill
innocent people, especially children. There
is probably mental illness in every other
country in the world, but what is the differ-
ence between America and New Zealand,
for instance?
New Zealand does not have the
National Rifle Association, which val-
ues profits over people. Jacinda Ardern,
their prime minister, acted swiftly after the
shooting incident in Christchurch, with a
A
LETTERS WELCOME
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letters per writer are allowed each
month. Letters written in response
gun buyback.
More innocent people murdered for no
reason, other than they were in the wrong
to other letter writers should address
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place at the wrong time. A military-style
weapon, designed to kill a large number
of victims quickly; these weapons are not
for hunting, are not for self-defense and
should not be for civilians.
People meeting in church, getting gro-
ceries, shopping in a mall, enjoying a the-
ater or concert and, most horrific, children
in schools … everyday places. Bend, Ore-
gon. Safeway. How much closer to home
does it have to get?
An election is coming up soon. If you
are sick of yet another senseless murder
of innocent people, please be an educated
voter. Check which candidates are receiv-
ing funding from the NRA, then vote for
the candidate who is not beholden to the
NRA. Vote for people over profits.
Protect our democracy. Your vote mat-
ters. Mark your calendar, and vote!
LaREE JOHNSON
Astoria