Two veteran political activists are laying the groundwork to repeal Oregon's unique 28-year-old corporate kicker law, an idea long championed by a local lawmaker.
Quick to say they are not eyeing the personal kicker that individual taxpayers receive, Sal Peralta said he and Travis Diskin have their eyes set on the kicker rebates that are issued to businesses in years when state revenue collections exceed official projections by more than two percent.
"Historically, about 80 percent or more of the corporate kicker leaves Oregon and a big chunk of it goes to just 26 corporations that are multinational and multi-state corporations operating in Oregon," Peralta said Wednesday in a telephone interview from his McMinnville home.
"These out-of-state corporations should be paying more of their fair share," he said, noting that in the mid-1970s these corporations were paying just below 20 percent of the state's income tax. Today, it's less than 5 percent, he said.
Specifically, the pair is trying to take the corporate kicker law out of the state constitution so future legislatures or a future ballot initiative may repeal the law.
"We want future legislatures to feel as though they're empowered to get rid of the corporate kicker in a permanent way," Peralta said, adding the campaign has had some "productive conversations" with both Democratic and Republican leaders in the Legislature about eliminating the kicker.
State lawmakers in the 2007 legislative session had discussed eliminating the corporate kicker, but settled on a compromise that instead suspended the rebates for a year, creating the state's first rainy-day fund with the $290 million in corporate tax rebates that would have otherwise gone back to C-corporations.
State Rep. Peter Buckley, an ardent critic of the corporate kicker, said it makes more sense to eliminate the corporate kicker than keep the state on its revenue rollercoaster, noting that the law is "very bad" public policy and warrants revision.
"I really do want that corporate kicker to go into the rainy day fund permanently," the Ashland Democrat said. "It's the right thing for Oregon businesses to do, and I believe there is support in the business community for that."
The structural reserve was created to stave off the type of crippling cuts lawmakers made in the 2002-03 recession.
At that time, income tax receipts plummeted, forcing lawmakers to pare public services and borrow $450 million from Wall Street to keep state programs operating after voters rejected a temporary statewide tax increase.
Buckley, chairman of the House Education Committee, suggested that the so-called individual kicker law also be amended to reduce payments to just one-third of revenue surpluses. The additional funds would go to the state's rainy day fund and to Oregon's colleges and universities.
Saying it's too late to gather about 125,000 signatures to get the 108,000 valid signatures needed to get a measure on the 2008 statewide ballot, Peralta said supporters plan to push the initiative in 2010.
covers the state Legislature for the Ashland Daily Tidings. Reach him at email@example.com.
Activists eye corporate kicker funds