BAKER CITY HERALD • SATuRDAY, MAY 21, 2022 A5
LOCAL & REGION
Oregon forecasts a record $3 billion tax kicker in 2024
in the next state budget cycle in
2023-25.
Taxes kept rolling into
Brown said in a statement:
Oregon’s coffers at record
“The good news is that the
amounts this year, but state
continued strength in the econ-
economists say much
omy will allow the
of that money is
Legislature to look at
likely to go back to
additional one-time
taxpayers in 2024 in
investments in the
record credits against
coming budget cycle
their state tax bills.
— like those we’ve re-
While they also are
cently made in hous-
not forecasting an
ing, behavioral health
Brown
economic downturn
and child care — to
soon, the economists
further spur growth
say that if it happens in 2023
and support working families,
or 2024, Oregon’s tax collec-
so that all Oregonians see and
tions could drop by as much
feel the benefits of our eco-
as 20% — and the state’s dis-
nomic bounce back.”
cretionary budget still relies
Though Brown leaves of-
largely on personal and cor-
fice on Jan. 9, 2023, her ad-
porate income taxes.
ministration will prepare
Still, shortly after the state’s
most of the next state budget
quarterly economic and rev-
that goes to the Legislature.
enue forecast was released
Whoever is elected governor
Wednesday, May 18, Gov. Kate Nov. 8 will have until Feb. 1
Brown said the forecast will
to propose changes.
yield slightly more money that
Even allowing for $1.9 bil-
can be spent on one-time needs lion in credits against taxes af-
BY PETER WONG
Oregon Capital Bureau
Forecast: $3 billion kicker
The latest projections are for
a record “kicker” of $3 billion
in credits to taxpayers against
their 2023 tax bills — paid out
when they file returns in spring
2024 — and $931 million in
excess corporate income taxes
that will go automatically into
the state school fund.
Under a 1979 law, which vot-
ers wrote into the Oregon Con-
stitution in 2000, taxpayers get
a “kicker” when actual tax col-
lections exceed 2% of the fore-
casted amounts at the time that
lawmakers approve the two-
year budget. The rebate covers
the entire excess, not just the
amount above 2%.
McMullen said the princi-
pal reason tax collections are
higher now is that higher-in-
come taxpayers are cashing in
on capital gains, which are prof-
its from the sale of assets such
as stock. Unlike the federal tax
code, which offers a tax break,
Oregon taxes capital gains as
ter the 2019-21 budget cycle,
state economist Mark McMul-
len said Oregon still collected
$1.2 billion more than econ-
omists projected a year ago,
when they prepared a forecast
for the current two-year bud-
get. Though McMullen said
the trend is similar in other
states dependent on income
taxes, their gains were 35% to
40% above forecasts; Oregon’s
was 70%.
“We never really could have
imagined the sort of things we
have seen in the past couple
of months. What that has left
us with is unprecedented bal-
ances for the current cycle,” he
told lawmakers on the House
and Senate revenue commit-
tees. “Those are largely, but
not entirely, offset by a larger
kicker in 2023.
“We’re going to do our best
to explain how we could pos-
sibly be this stupid to make
this kind of forecasting error
in the outlook.”
ordinary income with a top rate
of 9.9%. Some taxpayers may
anticipate federal changes that
will increase their taxes.
Based on a conference call
with economists from other
states the previous day, Mc-
Mullen said:
“The trend is the same; it’s
not an Oregon phenomenon.
We are seeing it across the
board. It’s a lot higher than our
2% threshold for the kicker,
which made a dramatic change
for the outlook for 2023-25.”
However, as part of a pre-
sentation McMullen and se-
nior economist Josh Lehner
made to the lawmakers, they
said there are increasing signs
of a potential downturn, which
would result in less money
coming into state coffers.
Potential indicators of a
downturn:
• Shrinkage of economic ac-
tivity, as measured by the gross
domestic product in the first
quarter of this year.
• The war between Rus-
sia and Ukraine. Though the
United States has cut off Rus-
sian oil, which accounted for
only a small share of its im-
ports, Lehner said there are in-
direct effects on oil prices, al-
though the price has stabilized
at $100 to $110 per barrel.
• Continuing problems with
supply chains, particularly the
coronavirus-related economic
shutdowns in China, a major
manufacturer of goods.
• Inflation, which has been
running at annual rates (8%)
not seen since the early 1980s.
“Consumers are pessimistic
because the cost of living is
rising,” Lehner said. Though
wages nationally have risen
17% since the onset of the pan-
demic two years ago, Lehner
said the average drops to just
5% when adjusted for inflation
— and rising prices eat away at
that gain.
See, Kicker/Page A6
Idaho Gov. Little turns back Trump-backed challenger
tle said at a Republican gath-
ering in downtown Boise late
BOISE — Idaho Gov. Brad
Tuesday after winning the pri-
Little won the GOP guber-
mary. “Once again I’m hum-
natorial primary by beating a
bled by the awesome opportu-
Trump-backed challenger who nity to serve and work for the
had repeatedly criticized the in- great people of Idaho.”
cumbent for not being conser-
Little won 53% of the vote
vative enough and who down- against seven challengers, in-
played the loss on Wednesday, cluding McGeachin, who re-
May 18.
ceived about 32%.
The intraparty contest Tues-
McGeachin was at a private
day, May 17 between Little and gathering in Boise where re-
Lt. Gov. Janice McGeachin was porters weren’t allowed. She
an example of the choice GOP issued a statement posted on
voters face nationwide between Facebook on Wednesday.
“Last night, Idahoans
established candidates and in-
showed Brad that he does not
surgents endorsed by former
have a mandate,” she said.
President Donald Trump.
“Brad Little barely managed
Little and McGeachin fre-
a majority even with tens of
quently feuded over coro-
thousands of democrats and
navirus precautions and the
role of government. Last year liberals infiltrating the Re-
publican Primary to support
McGeachin twice attempted
a power grab when Little was him. Conservatives must get
smarter and understand that
out of state on business.
we beat ourselves when we
“I felt the honor of serving
the great state of Idaho in good don’t unite behind each other,
times and in tough times,” Lit- we must never do that again.
BY KEITH RIDLER
Associated Press
The establishment counts on
that, and we fell for it.”
Little didn’t gloat in his
speech Tuesday, with much
of it sounding like a standard
stump speech recounting the
state’s red-hot economy and
large income tax cuts the last
two years as well as taking
shots at Democrats.
“The leftist states are dys-
functional places with broken
policies that limit opportunity,”
Little said. “We would like to
build a wall around Idaho and
make California pay for it.”
Idaho is among the nation’s
fastest-growing states, with
some of those new residents
coming from California.
Republicans are almost
guaranteed of winning in the
general election as Democrats
haven’t held the governor’s of-
fice since 1995 or statewide
office since 2007. Republicans
hold supermajorities in the
House and Senate, and Dem-
ocrats aren’t even contesting
more than half of the Legisla-
ture’s 105 seats.
Various groups encouraged
independents and Democrats
to register as Republicans to
halt a slate of far-right candi-
dates, including McGeachin.
The number of voters doing
that appeared to be too small
to make a significant differ-
ence, but Alicia Nelson took
that path and voted for Little
over McGeachin, as well as
other mainstream Republi-
cans.
“In Idaho you have a lot of
crazy people, so you kind of
have to weed them out to get
to somewhat logical thinking,”
she said.
Bill Brown stuck with the
Democratic primary as he
has done for decades, but ac-
knowledged the dominance of
the Republican party in Idaho.
“It has turned so far right it’s
kind of scary,” he said.
Little was attending a Re-
publican Governors Associa-
tion meeting in Tennessee last
May when McGeachin issued
an executive order banning
mask mandates. Little quickly
rescinded the order and de-
cried her actions as an “irre-
sponsible, self-serving political
stunt.” He had never issued
statewide COVID-19 mask
mandates, instead saying that
local officials should be able to
do what they see fit.
She tried it again a few
months later when Little was
away, issuing an executive
order that expanded on a di-
rective that no Idaho govern-
ment could require vaccine
passports. She sought to add
K-12 schools and universities
to the ban.
McGeachin accused Little,
the first-term governor, of re-
jecting conservative princi-
ples, writing on Twitter that
“protecting individual liberty
means fighting against tyranny
at ALL levels of government.”
Little, a rancher from
memorial
day
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southwest Idaho, served as
lieutenant governor from
2009 to 2019 before becoming
governor. He touts the record
$600 million income tax cut
he signed earlier this year that
includes a one-time $350 mil-
lion in rebates and $250 mil-
lion in permanent income tax
reductions going forward for
people and businesses.
The 68-year-old Little also
highlighted his “Leading
Idaho” plan that includes a
record $300 million educa-
tion spending increase, plus
spending $200 million ongo-
ing for roads and bridges, the
largest ever increase for trans-
portation.
The 59-year-old McGeachin
had, and frequently touted, an
endorsement by Trump, who
won Idaho with 64% of the
vote in the last general election.
McGeachin has also promoted
Trump’s lies that the 2020
election was stolen from him
through mass voter fraud.
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