Oregon House Bill HB4125

Oregon 2026 Regular Session

• Introduced: 2/2/26
• Refer: 2/2/26
• Failed: 3/6/26

Caption

Prescribes methodology for the preparation of revenue estimates used in the budgeting process and as applicable to the surplus revenue refund process.

Summary

HB 4125 would change how Oregon prepares certain state revenue estimates used in the budgeting process and in the state’s surplus revenue refund system. The bill directs the Oregon Department of Administrative Services, with assistance from the Department of Revenue, to use specified methodologies for revenue forecasting, including projections toward the lower end of a generally accepted range of estimates, models from nationally recognized data vendors, consensus-driven methods, and revenue data from the 10 most recent fiscal years. It also requires quarterly statements describing the methodology and assumptions used in revenue estimates. The bill further revises the statutory “kicker” or surplus revenue calculation process. For biennia in which General Fund revenues exceed forecasted amounts by at least 2 percent, it preserves the existing framework for corporate income and excise tax excesses to support K-12 public education, while continuing the personal income tax refund mechanism for other excess General Fund revenues. It also requires the Department of Revenue to estimate the difference between surplus calculations under the bill’s methodology and under current law, then transfer that amount into a newly created One-Time Emergencies and Finance Fund beginning in 2027.

Impact

HB 4125 amends ORS 291.342 and 291.349 and applies to revenue estimates prepared on or after January 1, 2027. It would alter the legal methodology used by state budget officials to forecast General Fund revenues and to calculate surplus revenue credits, which could affect the size and timing of future budget baselines and taxpayer refunds. The bill also creates the One-Time Emergencies and Finance Fund in the State Treasury and dedicates transferred moneys to PERS unfunded liability reduction, capital projects that would otherwise be bond-financed, debt service, and emergency expenses, with continuous appropriation to the Department of Administrative Services.

Sentiment

The available record shows the bill was still in committee when the session ended, and there are no recorded votes or committee transcript excerpts provided. Based on the bill text, the measure appears to be framed as a technical budgeting and revenue-management proposal rather than a broad policy change. Its structure suggests an intent to make revenue estimates more conservative and to redirect some surplus-related amounts into a reserve-style fund for state priorities.

Contention

The main point of potential contention is the bill’s change to revenue forecasting methodology and surplus distribution. Supporters may view the lower-end forecasting requirement and the new fund as a way to reduce volatility and create resources for emergencies, debt service, PERS liability reduction, and capital needs. Opponents could object that the bill may reduce the amount returned to taxpayers through the surplus refund process or shift money away from the existing kicker framework, especially because it requires a transfer based on the difference between two estimation methods. Any debate would likely center on whether the state should prioritize taxpayer refunds or retain more revenue for state uses.