the road ahead
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The Road Ahead. Will we circle into a drain?. Low investments in education and high income tax rates threaten further erosion of personal income levels The U.S. and Oregon economies appear poised for a slow, jobless recovery. - PowerPoint PPT PresentationTRANSCRIPT
The Road Ahead
Will we circle into a drain?
• Low investments in education and high income tax rates threaten further erosion of personal income levels
• The U.S. and Oregon economies appear poised for a slow, jobless recovery.
• Aging of the Baby Boom generation will increase the age 65+ population by 46% during 2010-2020, putting upward pressure on Medicaid spending.
• High health inflation will continue, which will drive up the costs of Medicaid and public employee compensation.
• Legacy costs of a poorly managed/conceived public employee pension system have come due.
Slow Economic Recovery
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-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1980
1990
No change
2007State forecast
2001
The number of Oregonians aged 65+
will increase 46% during 2010-2020.
Or about 60 per day.
And, as they retire, they’ll take their
diplomas and experience with them.
Fewer workers to pay for an aging population
2000 2010 2020 2030 20400.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
3.43.2
2.4
2.01.9
Prime Working Age Adults Per Aged Oregonian
Nu
mb
er
of
Wo
rke
r A
ge
d 2
5-5
4 D
ivid
ed
by
th
e P
op
ula
tio
n A
ge
65
an
d O
lde
r
The incoming workforce is less educated
Legacy costs of a poorly designed and managed public pension system have come due
Costs of an Aging Population will Hit Soon
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
0.3%
1.0%0.9%
1.3%
Medicaid (State Share) and PERS Employment Payments Expressed as a Share of Total Personal
Income, Oregon, 2008-2018
PERS Employer Payments Medicaid (State Share)
Source: ECONorthwest calculations using data from Mercer, Kaiser Family Foundation, and Health Affairs
Decade of Deficits
Reven
ues
(bns.
)Expendit
ure
s (b
ns.
)
With no sales tax and recent income tax increases, Oregon income and capital gains taxes are among the
highest in the nation
Nevada
Washington
South Dakota
Tennessee
California
Maryland
Oregon
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
Income Taxes Expressed as a Share of Personal Income, Selected
States, 2007
M 66