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Jeb Bladine: Caution urged in new ‘kicker’ talks

Oregon legislators and business leaders are reviving talks about changing the state income tax “kicker” – this time, perhaps, in a manner deserving close scrutiny by Oregonians.

We’ve heard it all before.

We’ve joined many Oregon newspapers for decades in supporting variations of change. But it’s going to take a conservative plan for Oregonians to vote that tax rebate program out of our state constitution.

Simply stated, without all the complex details: When Oregon’s income tax revenue exceeds a biennial estimate by 2 percent or more, the entire surplus is refunded to taxpayers. It occurs even when unforeseen state financial needs produce massive cuts in service.

We passed the law in 1980, creating separate kicker programs for business and personal income taxes. Voters enacted constitutional protection in 2000, but in 2014 we voted to redirect the corporate tax kicker to education budgets.

Whatchamacolumn

Jeb Bladine is president and publisher of the News-Register.

> See his column

Our newspaper archives reveal a steady stream of support for building a rainy day fund with kicker revenue.

In 2001, we quoted The Daily Astorian: “It is foolishness to send money out of the Treasury during a recession. The state will need all of its resources to maintain a safety net for unemployed Oregonians.”

Our own editorial that year observed: “We have just viewed the ludicrous exercise of spending almost $1 million for the public relations value of mailing out $254 million to taxpayers, followed immediately by contemplation of $700 million in budget cuts.”

We opposed redirection of the corporate kicker to education rather than a rainy day fund, but voters eventually agreed to make education the beneficiary. At the time, we editorialized: “How sweet it would have been if, in recent years, proponents of a rainy-day fund had squelched opposition to their plan and created a reserve to plug critical holes.”

Three years ago, I said in this column: “Most people agree it’s smart to set aside funds in a rainy day savings account. But, apparently, that good advice is lost on Oregonians as it relates to their state government.”

That comment introduced support for redirecting the kicker until a state savings account was fully funded, then addressing taxpayer rebates.

Oregonians, often with good reason, tend to distrust our state government’s lack of judicious financial management. Now that Democrats enjoy a two-thirds supermajority in both the House and Senate, they can craft a plan to return income tax kicker funds to their budgetary control.

Oregonians should support a cautious rainy day fund plan. But they must avoid writing a blank check to the Legislature.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.

Comments

Don Dix

How to tell if the 'kicker' has been effective -- for nearly 40 years since it's inception, the 'opponents' (those whose only focus is more revenue to spend) annually attempt to redirect the funds from Oregon taxpayers. The frequent attempts at change are ample evidence that the program is producing the desired result.

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