The United States economy is steadily growing. It’s strong enough, some think, to support a rise in historically-low interest rates. Meanwhile Oregon’s unemployment rate is low, wages are on the rise, and Portland has one of the fastest growing housing markets in the country.
That’s the good news, Budget Director Michael Jaspin told commissioners during a briefing Tuesday on the county’s five-year economic forecast.
There is also cause for concern. Home values in Multnomah County rose nearly 12 percent last year, but property taxes went up less than 4 percent. And those tax revenues aren’t keeping pace with increases in the county's obligation to the Public Employees Retirement System, and annual cost of living and medical costs.
County Chair Deborah Kafoury noted that the state is facing a 2017-2018 deficit of $1.7 billion, and that’s likely to hit the county, too.
There are also many unknowns, Jaspin said. The country has elected a president who promised to cut government-subsidized health insurance, an initiative that allows the county’s Health Department to recover costs of serving low-income residents. Also, if history is any indication, the nation might expect a recession in the next few years.
But there’s reason to be optimistic.
Unemployment rates are so low that working people have more leverage to demand better wages. And soaring home values might not indicate a bubble about to burst. It has likely been due to a combination of low interest rates and wealthier home buyers. Jaspin said he expects housing prices to continue rising, albeit at a more conservative pace.
To be sure, Jaspin said, the risks are real. The county has a surplus now, but it’s also investing in major infrastructure projects including the Sellwood Bridge, a new Central Courthouse and Health Department headquarters.
Looking out five years, the county will have dipped into a deficit.
“It may seem a little gloomy, but if you go back 10 years, the notion that we could even contemplate those buildings was impossible. In some respects it’s not how bad is it, it’s how much new stuff have we been able to do and can do going forward,” Jaspin said. “That said, we can’t add any new on-going programs. Or maybe we’ll get lucky and there won’t be a recession in the next four or five years.”