Despite Recession, Oregon's Personal Income Rises

Daily Emerald
March 28, 2011

Per capita personal income sees 2 percent increase in last decade

New data released last week by the U.S. Bureau of Economic Analysis suggests Oregon's per capita personal income continued to rise in 2010, suggesting statewide economic conditions are improving despite a continuing revenue shortfall.

The Oregon Center for Public Policy's analysis of the bureau's data found that over the last decade, Oregonians' per capita personal income has risen 2 percent, despite an eight-month recession beginning in March 2001 and an 18-month recession beginning in December 2007. According to the information released by the BEA, Oregon's PCPI in 2010 was $37,095. Oregon ranks 30th among all states, and the state is facing a revenue shortfall, meaning state income is not at its necessary level.

But where Oregon ranks nationally is hardly important, OCPP executive director Chuck Sheketoff said, because each state faces its own challenge and must be measured on a case-by-case basis.

"Our revenue shortfall stems from the recession and anemic recovery," Sheketoff said in a news release. "Whether other states have higher per capita personal income is irrelevant. Whether we as a state can continue to fund our schools, health and human services, and public safety — programs that low-income and middle-class Oregonians rely upon almost every day — depends on whether we decide to raise the necessary revenue."

One way for the state to raise that revenue would be to modify existing tax codes, OCPP policy analyst Jason Gettel reasoned. Gettel also said the "simple answer (to overcoming the revenue shortfall) is to raise more revenue based on a progressive system," wherein individuals are taxed based on their ability to pay.

"Some (tax expenditures) are well-designed and have targeted benefits, and some are not," Gettel said.

"Significant revenue can be obtained by going through tax revenues and reforming them in order to make sure they are well-targeted and benefit the Oregonians."

With inflation taken into account, Oregon's per capita personal income increased 68 percent over the last four decades, from $22,070 in 1970 to $37,095 in 2010.

Oregonians' total personal income, which is the total income a person receives from all sources, dropped .26 percent in 2009 because of the recession. But in 2010, total personal income increased by one percent, overturning the 2009 decline.

"Overall and on average we're having growth in personal income, but the growth is not fairly shared among Oregonians," Sheketoff said. "The problem is that for a long time now, the income gains largely have been flowing to the very top."

Gettel said the new data implies very little about the typical Oregonian, and since it is an average, the data can be thrown off by income equality.

"What it does say for Oregonians in general is that the income both on an aggregate or total sense, as well as per person, has been trending up for several decades," the analyst said. "What this means is the income is there to fund the services Oregonians count on, like schools and public safety if we choose to do so."

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