Oregon taxpayers may have heard they would be getting a big, fat kicker check on their 2019 taxes. The tax credit would be worth about $180 for people making between $35,000 and $36,000 and more for people making more.
But what happens when Oregon lawmakers face the prospect of returning money to taxpayers? The Legislature’s unofficial maxim — thou shalt not give taxpayers their money back — blazes brightly enough to make the Capitol dome glow.
There’s a proposal this session to essentially do away with the kicker. And there’s a proposal to shrink the 2019 kicker check. Both should be rejected.
Oregon’s kicker law is one of the few controls on state spending. When the state underestimates how much personal income tax revenue it will receive by 2 percent or more, money gets kicked back to taxpayers. Any personal income tax revenue that is above the original two-year fiscal projection is sent back.
The possible change for the 2019 kicker check comes from House Bill 2975. It looks innocuous enough. There’s no mention of the kicker anywhere in the bill. The operative language is: “Sections 24, 25, 26, 27 and 29, chapter 725, Oregon Laws 2017, are repealed.”
When the bill came up in the Legislature’s Joint Ways and Means Committee, Sen. Fred Girod, R-Stayton, described it as a routine matter “to support a rebalance of the 2017-2019 approved budget.” Nobody on the committee, including Rep. Mike McLane, R-Powell Butte, asked any questions. It easily passed out of committee and onto the House floor with a recommendation for the House to pass it.
But what the bill would do is reduce the overall size of the kicker by about $108 million from an original total of about $750 million. The bill transfers that $108 million out of the general fund budget for 2017-19. It was originally added in to help with state expenses. The change would make every kicker check proportionally smaller.
After the bill passed out of committee, McLane learned — thanks to Rep. Dan Rayfield, D-Corvallis — that the bill would, in fact, have an effect on the kicker. McLane pointed out on the House floor that at least $28 million of the $108 million being moved out by HB 2975 is derived from income taxes paid by Oregon taxpayers. It should be part of the kicker. The rest of the money could arguably be moved out. It was not directly related to personal income taxes. For instance, more than $40 million came from legal settlements won by the state.
Despite McLane’s argument, the House’s Democratic majority passed the bill on to the Senate over Republican objections. The Senate should reject this unfair taking of the kicker.