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SALEM -- Oregon's tax collections will be down nearly $200 million from earlier projections for the two-year budget cycle that has just started, state economists told lawmakers Friday.

The outlook detailed in the quarterly revenue forecast is unlikely to require any immediate cuts in government spending because it's early in the cycle and lawmakers budgeted significant reserves in case income fell flat, officials said.

The reduction in expected revenue can be attributed to a huge wave of bad news, including the European debt crisis, volatility on Wall Street and concerns about Congress' ability to deal with the U.S. debt, said Mark McMullen, Oregon's interim state economist.

Related: Many state budgets worse than before recession

Those factors lead economists to anticipate smaller capital gains tax collections and less consumer spending.

A review of tax collections from the last biennium, which ended June 30, indicates Oregon will not be sending out kicker checks to businesses or individual taxpayers.

The kicker law, which is unique to Oregon, requires the state to refund any unanticipated revenue if collections at the end of a biennium are at least 2 percent higher than projections from the beginning.

Oregon is said to be doing better economically than most other states, largely because Oregon doesn't rely heavily on European exports or on sectors that are struggling, such as manufacturing and financial services.

Aside from government and housing, most sectors are expanding. And while job growth has largely plateaued, private employers haven't started shedding jobs in large numbers, McMullen said.

Still, Oregon's economic growth is concentrated in cities and the Columbia River Gorge.

To a large extent, rural Oregon has been left behind so far in this recovery, McMullen said.

The struggles in rural areas are very scary, he said, because anticipated cuts in federal spending are likely to harm sparsely populated areas, where a large fraction of the labor force works in the public sector, and where local governments are dependent on federal timber payments that are on the chopping block.

More: Debt deal a blow for Columbia bridge

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