Editorial: Kicker squeaker highlights need for reform

The state of Oregon will, apparently, avoid having to refund millions of dollars to its citizens this biennium. While revenues are greater than expected, they haven’t reached the magic line that triggers the state’s income-tax kicker.

We haven’t heard much about the kicker in recent years. It hasn’t been paid out since 2007, the last time the state collected 2 percent above its biennial revenue projections, made at the end of the last odd-year legislative session.

Your view of the kicker depends largely upon where you sit, we suspect.

Lawmakers and government officials, in general, don’t like it. In good but not great times they can hope to collect a bit more in income taxes than they’d expected to — up to 1.99 percent more, in fact.

It’s when times start inching toward great that they have a problem. If they collect 2 percent more than projected, they must return everything over the projection, including that 1.99 percent. The corporate kicker, meanwhile, goes to a rainy-day fund for schools rather than to the businesses that paid it.

For all its quirks, the kicker does have a positive side. It forces lawmakers to be careful with their spending in good times, something that they had been loath to do before the kicker was in place.

Still, it does point out how complicated Oregon’s tax system can be. Revenue prognosticators may be good, but they’re not perfect, as the kicker law demonstrates. Too, Oregon has yet to find a way to extract much money from the out-of-state visitors who are so visible this time of year. And the state’s income tax rises so quickly and so steeply it can hardly be called progressive.

All this is fodder for Gov. John Kitzhaber’s tax reform plans, about which we haven’t heard much lately. His run for a fourth term for governor may be partly to blame. So, too, may the sheer enormity of the task. Oregonians haven’t been wild about any serious reform proposal in recent years, and little we’ve seen indicates that’s likely to change.