Hello Friends,
Oregon’s
most recent revenue forecast was released on Wednesday, August 23 during a
joint meeting of the House and Senate interim revenue committees.
According
to the economists who gave the
presentation, the state’s revenue collections are
projected to remain stable and largely unchanged from the figures that we used
to craft the budget for the 2017-19 biennium that began July 1.
A
summary of the forecast presentation states that personal
income tax collections were up $117 million from the previous forecast in May
and corporate income tax collections were up nearly $20 million from that same
time period.
Overall,
the state’s economy is still expanding, with employment, wages and salaries
continuing to grow. That improvement in employment is even picking up in
Oregon’s rural areas, which typically lag behind the larger metropolitan parts
of the state.
Because
revenues coming into state coffers are higher than first predicted, it is now
anticipated that Oregon taxpayers may be receiving a “kicker” of around $463.5
million. Additionally, $110.5 million of corporate tax revenue is projected to
be dedicated to K-12 school spending for the next two years. This is because voters
passed a ballot measure in the November 2012 general election that dedicated
the corporate kicker to education.
The
kicker was originally put into place by voters in the November 2000 election
through the passage of a statewide ballot measure. It has remained popular with
many voters, who enjoy receiving some of their tax dollars back from the state
when revenues exceed projections. Taxpayers used to receive a check for their
kicker, but subsequent legislation has changed that to take the form of a credit
to be applied to the next year’s taxes.
Several
feel that the kicker acts as a limitation on state government spending that would
not otherwise exist. But there are also many who question the wisdom of such a
policy, and feel that it adds to the volatility of the state’s tax system.
I
proposed a bill during the 2017 session that would have referred the kicker to
voters to decide whether they want to keep it. If voters approved of it, those
dollars would instead go towards bolstering our education funding.
That
bill was introduced late in the session and did not advance through the process
by the time we adjourned in early July. However, most of the bills that are
introduced every session do not pass. Some have to be reintroduced many times
before they do.
In
this case, I was hoping to start a conversation to be included as part of
ongoing discussions about the ways in which Oregon’s tax structure can be
improved.
An
official document from the Legislative Revenue Office shows
the distribution of the state’s last personal income tax kicker. Much of it
goes to the highest income earners. The average kicker amount going to persons
in that income group was just over $4,000. By contrast, the people in the
lowest income group received an average of $8.
Those
trends will continue for the current projected kicker, as Oregonians who earn
over $389,400 should receive an average credit of around $4902. The average kicker
credit, by contrast, will be for around $227.
It
is my hope that this kind of information will help guide future discussions on
the kicker, and enable us to craft tax policy that works best for businesses
and individuals while providing adequate funding for the public services we all
rely on.
To
watch footage of the revenue forecast, click
here. The next forecast is scheduled for November 29.
Yours Truly,
Sen. Alan DeBoer
Senate District 3
Capitol Phone: 503-986-1703 Capitol Address: 900 Court St. NE, S-421, Salem, Oregon 97301 Email: sen.AlanDeBoer@oregonlegislature.gov Website: http://www.oregonlegislature.gov/deboer
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