Oregon close to triggering income tax rebates
PORTLAND, Ore. (AP) -- A swelling state treasury is on the verge of triggering "kicker" rebates for Oregon taxpayers, according to state economists' quarterly revenue forecast unveiled Wednesday.
For the third time this year, economists revised their revenue forecast upward, leaving it just $27 million shy of the kicker threshold. That means even a small improvement over expected employment and wages could send at least $290 million in rebates to individual taxpayers.
Under a tax law unique to Oregon, if personal income tax collections exceed expectations during a two-year budget cycle by at least 2 percent, the extra money is kicked back to taxpayers.
Steady economic improvements have led the state to collect slightly more than projected in both corporate and personal income taxes. Much of the increased revenue came from last year's special legislature session, when lawmakers voted to raise taxes on corporations and wealthy individuals. Because the action came after lawmakers adjourned the regular session, the additional revenue they created counts toward the 2 percent kicker threshold.
The forecast projects that corporate income tax collections will exceed the threshold, but voters decided in 2012 that excess corporate revenue should be earmarked for primary and secondary schools.
Oregon's kicker law was created as a check on government spending, ensuring the Legislature can't spend money they didn't expect to receive. Critics say it contributes to Oregon's especially volatile budget and prevents the state from saving money during boom years to use when the economy turns south.
Legislative leaders from both parties said the steady economic improvements are good news, but they acknowledged that many Oregon residents are still struggling to find work.