Kicker return may be in play
Economy If economic projects continue to hold course, Oregonians could get tax credits
Oregon taxpayers could see up to $349 million credited against their 2015 taxes next year under an economic and revenue forecast released last week.
But despite the amount of the projected kicker, state economists forecast growth may most cushion the next two-year state budget.
These are the salad days for Oregons economy, state economist Mark McMullen told lawmakers on the House and Senate revenue committees.
The net effect could be a reduction of $21 million, once a higher ending balance from the current 2013-2015 budget and projected increases in income taxes for the 2015-2017 cycle are taken into account.
The budget framework proposed by the Legislatures chief budget writers is at $18.5 billion in spending from the tax-supported general fund and lottery proceeds. Those are the most flexible sources available to lawmakers.
Under a law that dates back to 1979, taxpayers receive excess amounts known as the kicker when actual collections exceed projections by 2 percent or more for the budget period.
The most recent kicker was in 2007, when the state rebated $1.1 billion to individual taxpayers. Another $340 million scheduled to be returned to businesses went into the creation of a general reserve fund.
There are two more forecasts scheduled before a kicker is finally determined for 2013-2015 – the May 14 forecast, on which lawmakers will base final decisions on the next two-year budget, and a Sept. 1 forecast that will be released in late August.
McMullen said there still could be a 50 percent chance that a kicker will occur, given that the projection is just $59 million above the threshold to trigger a kicker.
If there is one, taxpayers will no longer get checks as a result of a 2011 change. Lawmakers reverted to the refund method used before 1995, and credits against the following years taxes will save an estimated $1 million on printing and mailing checks.
The Senate Finance & Revenue Committee has begun hearings on a proposal to retain some excess personal income taxes for a state reserve. Sen. Mark Hass (D-Beaverton), the committee chairman, said voters would have to be involved at some point, because voters approved a ballot measure in 2000 to put the kicker into the Oregon Constitution.
Its hard for legislators to explain how the current system works, he said.
The economists also project excess corporate income tax collections, but under a 2012 ballot measure that money will go into the state school fund and will not be rebated.JW_DISQUS_ADD_A_COMMENT