In coming weeks, Oregon legislators will begin to consider what adjustments should be made to the state’s two-year budget and revenue picture. Much of the attention has gone to transportation funding, and the likely ballot issue which may alter it. But the economic and funding issues lurking in the coming year are broader.

Legislators will not find coping with the full range of what comes next an easy task.

The condition of Oregon’s economy right now isn’t easy even to describe, much less predict. Some of the usual sources of information aren’t as reliably available as usual. Much federal economic data was halted earlier this year due to some agency cutbacks and the recent government shutdown. (Some resumptions of data flow are expected soon.)

The Oregon Economic Forecast released Nov. 19 offers a heavily nuanced but partially optimistic take, suggesting the state of the economy isn’t as bad as it might have been.

“Despite a stall in net job creation in the first half of the year, aggregate income generation has proven resilient, which is reflected in both personal and corporate income tax collections,” the report reads. “This is an important real-time signal suggesting the economy is not in recession at present. It is also a reflection of persistent and elevated inflation, which lifts nominal activity and in turn tax revenues.”

The report specifically says that the general fund has registered an increase in projected revenue of $309.5 million, the bulk of which ($266.9 million) is projected to come from corporate income taxes.

Despite that, the report also said, “The projected ending balance as of June 30, 2027 is a negative $63.1 million.” Many areas are stable or “softening,” including the cannabis sales which had expanded rapidly for several years after legalization but more recently has weakened.

That lopsided corporate contribution also means income for almost everyone else has been stagnant or down.

The most recent unemployment statistics, from August (another example of the data gap at work), put the Oregon jobless rate at 5%, eighth-highest among the states and District of Columbia.

The D.C. jobless rate was the highest in the nation, accounted for in large part by federal government job cuts. In Oregon too, federal job cuts were among the largest areas of job reductions, even while state government job additions roughly offset that.

But the Oregon Employment Department also said that construction and manufacturing saw job losses in the last year even larger than those for the federal government — this at a time of relatively large construction in tech industry and residential projects.

The American economy has been described often this year as split between the artificial intelligence (AI) sector, and businesses servicing it, and everything else. Nearly all of the increase this year in the national stock market, and most of the national economic growth, has resulted from the massive trillion-dollar-level investment and spending related to AI. The “magnificent seven” megacorporations — Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and NVIDIA — which account for the bulk of stock market advances are heavily involved in AI.

Oregon, through its strong position in housing the data centers on which AI development relies, logically would be a beneficiary of some of this economic growth. To a limited degree it seems to be.

A data center industry report from May noted that “eastern Oregon has emerged as a strategic haven for hyperscale development. From its abundant green power and favorable climate to political support and low costs, this under-the-radar region is shaping up to be the next great hyperscale frontier.”

But the story is mixed. Massive data center growth in places such as Boardman and Hillsboro so far mainly has resulted in one-and-out construction work, with eventual employment likely to be small-scale. (Construction, remember, has been shedding jobs in Oregon despite all the data center construction.) Tax dollars (in line with the new state economics report) are likely to see some gains, but the centers are unlikely to transform local economies.

And the data centers also have generated some problems — boosts in electric power costs and water quality issues among them — which have negative economic effects. Some of those negative effects could create state issues which may lead to calls for state program work and state spending.

And, of course, all this doesn’t even factor in the already-hot issue of transportation funding, which seems likely to be upended by a new proposed ballot issue.

Unpredictability isn’t something often measured by economists. But economics watcher John Tapogna recently had this to say about the coming environment: “Many of Oregon’s systems—our schools, regulations, land use rules and permitting processes — were built for a different time, to solve yesterday’s problems,” he said. “But the future has never looked less like the past than it does right now.”

Managing these many new and conflicting economic pieces will represent a huge challenge for the short legislative session upcoming.

This column originally appeared in the Oregon Capital Chronicle.