in other words
june6
2019
3
Salem Report
By Representative Brad Witt
Oregon’s May Eco-
nomic Forecast was re-
leased in mid May, and
revenues are up. After
unprecedented tax col-
lections due to federal tax changes, Or-
egon’s revenue outlook for the current
biennium is much stronger than anyone
expected.
State economists predict Oregon
will take in about $900 million more in
general fund and lottery resources for
the current biennium than was estimated
just three months ago. The state is ex-
pected to bring in $2.1 billion more in
the current two-year budget cycle than
was predicted in 2017.
Oregon’s economic outlook re-
mains strong, but slowing, due in large
part to a tight labor market with employ-
ers having trouble finding new employ-
ees. Currently the state’s unemployment
rate is 4.3%.
Economists agree this income
tax revenue is historic, and due to Ore-
gon’s unique taxing system, Oregonians
are in line for a big personal tax credit
of $1.4 billion in the form of Oregon’s
kicker rebate when they file their taxes
in 2020.
In most states, any extra revenue
goes to the state legislature to spend. In
Oregon, if the state collects 2% more in
personal income taxes than what state
economists predicted two years earlier,
the kicker rebate is triggered, which
sends the money back to taxpayers in-
stead of being spent by the state govern-
ment. The $1.4 billion kicker would be
the largest in state history, more than
tripling the $463 million that taxpayers
received in 2018.
With this one-time cash infu-
sion, lawmakers are debating what
should be done. The first option is to
fund the kicker fully, returning all ex-
cesses to taxpayers, but there are other
suggestions on the table.
Governor Kate Brown says this
windfall “presents a unique opportunity
to protect Oregon’s future,” and suggests
using some of the revenue to pay down
Oregon’s public pension debt while also
investing in housing, financial aid for
college students, foster care, and the Or-
egon State Police.
House Speaker Tina Kotek ad-
vises approaching these unexpected re-
sources prudently with any use of the
one-time funds going toward areas of
significant need such as housing and
pension debts.
Historically, a large kicker
comes right before a recession, and Sen-
ate leadership suggested socking the
excess revenue into the rainy day or re-
serve fund, in anticipation of a downturn
in the economy.
It’s my opinion that until there
is a public vote to change the kicker law,
the money should be returned to the tax-
payers.
There were about 100 people
who contacted my office, 75% wanted
the kicker returned to the taxpayers,
although half of those indicated they
would be willing to consider changing
the kicker law with another statewide
vote. 25% of those responding thought
the state should keep some or all of the
kicker windfall to pay down the state’s
debt. I received many thoughtful re-
sponses; several suggested the state im-
plement an “opt out” or “donation” pro-
gram, so if a person wanted to donate
their kicker back to the state they could
designate a state program or debt to
which they wished to contribute. Many
people spoke in favor of beefing up the
rainy-day fund to help stabilize Oregon’s
state budget. Others spoke to specif-
ics: give the money to education, state
police, climate change, or pay down the
PERS debt. Given Oregon’s dependence
on income taxes, several constituents
mentioned that when the excess is re-
turned to the taxpayers, it will be spent
in Oregon, boost the economy, and be-
come taxable income again.
Your responses are proof posi-
tive that good minds working together
can come up with the solutions we need
to solve the state’s problems.
This is the last revenue fore-
cast before the June 30 deadline for the
legislature to pass a state budget. The
Ways and Means Committee will now
use these final revenue projections to
develop the spending plan for the next
two years, as Oregon law requires that
lawmakers approve a balanced budget.
Recently the House ap-
proved Senate Bill 664 requiring school
districts to provide instruction about the
Holocaust and genocide beginning with
the 2020-21 school year. The Oregon
Department of Education will adopt
content standards for Holocaust and
genocide studies and offer technical as-
sistance to school districts on the imple-
Publisher and Managing Editor
Scott Laird
503-367-0098
scott@vernoniasvoice.com
Contributors
Corrie Aiuto
Jack Kauppila
Superintendent Aaron Miller
Representative Brad Witt
Photography
Scott Laird
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mentation of the curriculum. This is an
important topic to cover, for as Edmund
Burke once said: “Those that don’t know
history are doomed to repeat it.” A re-
continued on page 6
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