Continued strong economic growth in Oregon means individuals could get a total of $555 million in personal income tax refunds in two years.
Oregon’s quarterly revenue forecast shows the state’s economy is growing faster than expected, leading to a projected increase in tax revenues, state economist Mark McMullen told legislators Wednesday.
That increase is likely to trigger the personal and corporate tax refund known as the "kicker." The corporate refund, which goes to schools, is estimated at $152 million.
Oregon's unique kicker law requires a tax rebate when the state's general fund grows by at least 2 percent more than projected at the beginning of the two-year budget cycle.
Taxpayers would see the kicker as a credit on their income taxes filed for the 2019 tax year. Oregonians received kicker refunds for the 2017 and 2015 tax years.
Senate President Peter Courtney, D-Salem said the positive revenue forecast reduces the anticipated deficit for the next biennium, setting the stage for comprehensive revenue reform that focuses on more than "catching up and filling holes."
“Revenue reform can finally be about investing in our kids. It can be about giving the next generation of Oregonians the tools they need to succeed in the global economy,” Courtney said.
House Republicans issued a statement attributing the increased revenue to legislative action earlier this year to disconnect Oregon from federal tax cuts.
That put the state over the kicker threshold, they said, resulting in a net revenue loss.
“In their haste to pass SB 1528 earlier this year, Gov. (Kate) Brown and legislative Democrats apparently failed to recognize that by requiring small business to pay $245 million more in state income taxes, their actions could trigger the income tax kicker," said House Republican Leader Mike McLane, of Powell Butte.
“If current projections hold, Oregonians are in line to receive $555 million of their money back from their state government,” he said. “The irony escapes no one."
But McMullen said that’s only one factor.
“Technically it’s the case that without that tax law there wouldn’t be a kicker in the baseline right now,” he said. “But in general, there’s so many moving pieces to this.”