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Tone Deaf: Keeping the Kicker
Its not your money until you cash the check. Even then...

Editor's note: this is the second of a multi-part series recounting how the party in power is thwarting the will of the people. There is also a downloadable companion brochure

Based on a booming economy in 2017-2019 biennium, the Oregon kicker was scheduled to pay back taxpayers the third largest kickback in the state’s history. The Oregon Constitution requires that, when there is at least a two percent difference between the final revenue forecast for the biennium and the actual end-of-biennium revenue, the surplus is returned to individual taxpayers.

In a complicated budget maneuver, Democrats voted to pass HB 2975 reducing the 2020 kicker by $108 million. For individual taxpayers, that translated to a 14.5 percent reduction to their kicker rebate when they filed their taxes in 2020 for 2019. By moving budget items around the Democrats said they could utilize more funds for critical services such as community colleges and higher education. It’s a back-handed violation of the Oregon Constitution.

Oregon is unique being the only state with a constitutionally mandated accountability law that ensures state government doesn’t grow too fast. The kicker ensures in years where revenue exceeds the state’s estimate that legislators don’t go on a spending spree. In essence it’s considered an over payment and returned to taxpayers. For corporations, their additional revenue is redirected to K-12 public education. Rep. E. Werner Reschke expresses it as “the best way to keep our economy growing is to return this money to the people who earned it. It’s one of the best and most effective economic development plans ever created. I believe that working families -- not politicians and government bureaucrats -- are the ones who are better equipped to wisely spend, invest and save this excess revenue.”

The Oregon Constitution requires the governor to provide an estimate of biennial General Fund revenues. In 1979, the Democrat majority legislature placed a condition on those revenue estimates that required excess funds to be “kicked back” to taxpayers. It was passed as a constitutional amendment in 1980. Since voters engraved the kicker in the constitution, the legislature majority has tried several tricks to delay or withhold funds from taxpayers. In 1991, the personal kicker was triggered, but legislators suspended it citing a budget turmoil. In 1995 they changed the year of calculation for personal rebates to the prior year to reduce the amount of returns. Voters retaliated in 2000 by enshrining the kicker in the constitution so only a vote of the people can abolish it, and any change or suspension requires a two-thirds vote of the legislature. In 2007 legislature, the corporate rebates were redirected to a rainy-day fund, and in 2012 voters permanently divert it to schools. Since 2011 the kicker has been a tax rebate, saving about $1 million in administrative costs allowing a larger rebate.

In 2019, Speaker Kotek introduced a bill to cut in half the rebates for public safety, air quality and job creation. It directed $260 million toward seismic upgrades to the I205 bridge, which was already in the transportation package passed in 2017. Then there was $245 million for a Zero Emission Fund to help the state transition to zero-emission vehicles, like electric cars. Kotek said she made the proposal “after hearing the magnitude of the expected kicker refund.”

Covid-19 has taken a toll on Oregon’s economy with very little possibility for a kicker this biennium. But it is ripe for proposals to end the kicker. Governor Brown has voiced support for diverting kicker refunds to cover the PERS shortfall. Riding the current wave of fear, it will be interesting to see what will be proposed for the 2021 session to shore up the economy.


--Donna Bleiler

Post Date: 2020-08-15 13:30:20Last Update: 2020-08-06 18:54:14



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