Oregon Office of Economic Analysis

Yesterday, I had the privilege of presenting on Oregon’s vice revenues as part of Tim Duy’s Oregon Economic Forum. Our office’s duties include forecasting these revenues as part of the General and Lottery Fund forecasts. However, hardly anybody ever asks us about them specifically, other than in the context of the overall forecast and budget discussion. I think this is for at least three reasons.

First is their relative size. While these vice revenues total $2.7 billion in the current biennium (the state keeps about $2.4 billion, the remainder is shared or transferred to cities and counties), this represents about 3% of the state’s All Funds budget. In the context of the General and Lottery Funds, these revenues account for 9% of the total. So they’re clearly important in the big picture, but represent a relatively small share of the overall budget.

Second, most of these vice revenues do not have much of an economic impact in Oregon. Some, of course, do have costs associated with them. That said, we don’t specialize in tobacco manufacturing, nor are we Las Vegas. These revenues are generated based on daily behaviors of Oregonians, but they’re largest taxes assessed on products brought into the state.

Third, the vast majority of us abstain entirely or consume our vices in moderation. They represent no portion or a small portion of our time and our budgets. Enjoyable, but largely immaterial to our well-being. And we get a little uncomfortable thinking about those who do not consume in moderation, and thinking about the societal or public health impacts of excess.

With that in mind, below is a copy of the presentation slides. For those interested in more, you can click on the link below to download a copy of the slides with notes that summarize the research and talking points behind the slides.

Oregon Vice Revenue Slide Notes

Note: Due to timing, I stopped the actual presentation on slide 12 and did not discuss the labor force participation issues or the Deaths of Despair. For this reason I am not including the associated notes on that portion. Additionally, our office does have a forthcoming report in the works on the Deaths of Despair, so stay tuned for that in a few weeks.