By Associated Press • 

Might Oregon kill ‘kicker tax’ rebate to help education?

PORTLAND — Momentum is building to end the only-in-Oregon approach of issuing tax rebates in order to build reserves for schools.

The Oregonian/OregonLive reports that if Oregon economists’ predictions hold, taxpayers will receive up to $724 million worth of “kicker” rebates when they file their income taxes in 2020.

Right now, the median state resident with roughly $36,000 a year in adjusted gross income can expect a tax credit of about $175 in 2020.

 

But it’s possible voters will decide to instead send the money to a rainy day fund for schools that the state could tap during economic downturns.

Business leaders who gathered in Portland on Monday said polling showed more than 60 percent of respondents would support such a change. Jeremy Rogers, vice president of the Oregon Business Council, told attendees at the Oregon Leadership Summit that lawmakers could refer the question to voters in the May 2019 election.

It was the latest sign that the idea is gaining momentum, six years after voters approved ending the kicker rebate on corporate taxes.

Under Oregon’s Constitution, the unique kicker tax rebate is triggered when tax revenues for a two-year budget cycle come in more than 2 percent above economists’ forecast from the start of the cycle.

One question heading into the legislative session is how high a priority it will be for Democrats to change the kicker, as they aim to pass major climate change legislation and raise billions in fees and taxes to fund Medicaid and education.

Sen. Mark Hass, D-Beaverton, is chair of the Oregon Senate Committee on Finance and Revenue. On Tuesday, he expressed support for the idea of ending the kicker.

“I would love to redirect it to the rainy-day fund,” Hass said on Tuesday, noting that Oregon’s dependence on income taxes exposes the state to wild fluctuations in revenue. “The next best thing to a major structural reform . is to have a strong rainy-day fund to cushion the inevitable downturns we have. It’s poor public policy to begin with.”

Comments

Don Dix

The 'kicker' was put into practice because the state could not be trusted to save the excess. Has that trust suddenly emerged? No, the poll taken was likely not a representative cross-section of voters, and most likely Portland heavy (polls are usually skewed to obtain a desired answer).

And if anyone really believes the state could keep it's hands off a rainy-day fund -- re-read the article. It's all about raising taxes and fees. An old saying goes --

“If you put our government
in charge of the Sahara Desert,
in 5 years there would be a shortage of sand."

This applies here quite convincingly, wouldn't you say?

REB

The state always needs your money more than you do. it's for the best.

Rotwang

No! Not another penny. My last income tax increase was supposed to fix government schools. They'll never be satisfied, trust me.

Tuvey

Maybe I just don't pay enough attention. Isn't the lottery and marijuana sales taxed to help the schools? What happened to that?

Rotwang

Having seen that Salem already tacks on the emergency cause to many bills, for no valid reason other than to prevent a referendum, I don't think that feeding a rainy-day fund with our twice-stolen money would be a good idea. Any day would become a rainy day to them.

Sponge

Rotwang, the purpose of the emergency clause is not to "prevent a referendum", since a referendum would have to come from the very same legislature that passed the bill. The emergency clause is simply a procedural mechanism to implement the provisions of the bill sooner, rather than later.

T.W.S.

In the twenty plus years I lived in Oregon, I collected the kicker only 2 (or was it three) times.

Coco

If you want a smarter and more successful society, you have to start when people are young. You start in education and stable family home. You can't have either without proper financial support. It hurts to be taxed. It's painful, but if you want to either maintain or better society, it's a fact you have to get used to.

Bigfootlives

I’ve heard about this rainy day fund for the better part of my life. Tell me, how much is in that rainy day fund right now? I think the answer would be zero. Every time they can lay their hands on money they are not entitled to they say its for the rainy day fund. Or even better, it’s for the children. No more.

Here is a good idea. Let’s set up the state’s counties with our own version of an electoral college. That way Portland metro, Salem and Eugene won’t be able to send us further down the rat hole.

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