Lawmakers Want Half of Oregon Taxpayers’ “Kickers” to be Allocated to Education and Wildfire Prevention
Two Democratic Oregon senators are proposing a constitutional change that will divert 50% of future personal income tax “kicker” refunds to schools and wildfire funding.
Currently, personal income taxpayers receive a “kicker” when revenue paid to the state exceeds projections by at least 2%.
Source: Oregon Department of Revenue / Oregon Office of Economic Analysis (My Oregon News)
Dailytidings.com
The lawmakers are proposing that when the income tax surplus exceeds $300 million in a biennium, the money should be equally divided.
Taxpayers will receive 50% of the surplus, with the balance going to K-12 education, community colleges, and wildfire prevention and suppression.
| Feature | Current personal kicker | SJR 201 proposal |
|---|---|---|
| Trigger | Kicker applies when revenues exceed forecast by 2% or more | Same trigger, plus a split rule if the excess is above a set dollar threshold |
| Dollar threshold | No dollar cap in the personal kicker rule | If excess is over $300 million, only half is returned to taxpayers |
| Where the other half goes | Not applicable | Reserve accounts split equally for schools and community colleges, plus wildfire prevention and suppression |
| Inflation adjustment | Not applicable | $300 million threshold adjusted for inflation each biennium |
| Start date | Current constitutional rule | Applies to biennia starting July 1, 2027, subject to voter approval at the next regular general election |
If Passed, the Proposal Will be Put to Public Vote at the Next General Election
The $300 million threshold will be adjusted for inflation and, if passed, will become effective in the 2027-29 biennium. If the bill then passes both chambers, the proposal will be put to public vote at a future general election.
The chief sponsors of the bill are Senator Floyd Prozanski and Senator Lew Frederick, who have received support from the Oregon Center for Public Policy (OCPP). The OCPP states that the bill is a step towards using surplus tax revenue more equitably.
Republican Lawmakers are Opposing the Bill
Republican lawmakers, however, are opposing the bill, arguing that tax “kickers” should not be used as ‘fallback funding” to balance the budget.
House Republican Leader Lucetta Elmer says tax surpluses are not “slush funds,” but rather a commitment to taxpayers. She says while Republicans support funding of schools and wildfire protection, they prefer a focus on budget priorities, rather than reducing refunds to taxpayers.
Meanwhile, concern about the new bill has also been voiced by Oregonians who say the state will be taking away money from families who are facing financial burdens with increased costs for basic necessities such as food and housing.
Pew says at least nine states have automatic refund laws that send money back when a revenue threshold is reached. It highlights Oregon’s “kicker” and Colorado’s TABOR as the two states hitting their thresholds in the 2024 and 2025 financial year, warning that refunds restrict lawmakers’ budgeting options when conditions change.
The Colorado Department of Revenue explains that TABOR is a constitutional limit on how much revenue the state can retain and spend. Excess revenue must be refunded to taxpayers.
The bill will be introduced during the short legislative session beginning tomorrow (Monday).