State economist’s forecast raises possibility of ‘kicker” tax rebate

On February 19, the Oregon Office of Economic Analysis released its quarterly economic and revenue forecast. The forecast was optimistic about the national and state economies, with the labor market “reaching near-boom levels of job growth.”

The strong outlook for revenues from the coming tax season suggests that the 2013-2015 biennium’s tax collections will be near or above the 2 percent tax kicker threshold. According to the kicker law, first passed in the 1980s, if tax collections go 2 percent over projections made at the beginning of a two-year budget cycle, all of the extra would be returned to taxpayers. The forecast estimates a tax kicker of $349 million, which will be distributed via a credit on 2015 tax returns rather than as a direct refund.

This would be the first time the kicker has been triggered since 2007. Though the report noted that increased revenues and the positive outlook will ease budget pressures for the state budget and legislature, the kicker will still impact state fiscal decisions.
The Oregonian provides a Q & A on the kicker.