The Oregon tax rebate, commonly referred to as the kicker, is a rebate calculated for both individual and corporate

taxpayer A taxpayer is a person or organization (such as a company) subject to pay a tax. Modern taxpayers may have an identification number, a reference number issued by a government to citizens or firms. The term "taxpayer" generally characterizes o ...

s in the

U.S. state In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sove ...

Oregon Oregon () is a U.S. state, state in the Pacific Northwest region of the Western United States. The Columbia River delineates much of Oregon's northern boundary with Washington (state), Washington, while the Snake River delineates much of it ...

when a revenue surplus exists. The

Oregon Constitution The Oregon Constitution is the governing document of the U.S. state of Oregon, originally enacted in 1857. As amended the current state constitution contains eighteen sections, beginning with a bill of rights.

mandates that the rebate be issued when the calculated revenue for a given biennium exceeds the forecast revenue by at least two percent. The law was first enacted by

ballot measure A referendum (plural: referendums or less commonly referenda) is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption o ...

in 1980, and was entered into the

with the enactment of Ballot Measure 86 in 2000. The

Oregon Department of Revenue The Oregon Department of Revenue is the principal tax collection agency in the U.S. state of Oregon. It is charged with administering the state's tax laws and collection of state taxes including personal and corporate income and excise taxes; g ...

distributes the rebate to individuals in what is known to Oregonians as a kicker check. The kicker, which prevents ''surpluses'' above a certain size, is a complement to the

balanced budget amendment A balanced budget amendment is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government. Balanced-budget provisions have been added ...

, which prevents ''deficits.'' If the corporate kicker is triggered, the excess is returned to the state general fund to provide additional funding to

K–12 K–12, from kindergarten to 12th grade, is an American English expression that indicates the range of years of publicly supported primary and secondary education found in the United States, which is similar to publicly supported school grade ...

schools. This is the result of the passage of 2012's Ballot Measure 85. Prior to that time, the rebate was distributed to the corporations.

History

Rising concerns over property taxes and inflation in the 1970s urged lawmakers all over the country to draft

tax cut A tax cut represents a decrease in the amount of money taken from taxpayers to go towards government revenue. Tax cuts decrease the revenue of the government and increase the disposable income of taxpayers. Tax cuts usually refer to reductions i ...

plans; notably California's Proposition 13, which inspired the

Oregon legislature The Oregon Legislative Assembly is the state legislature for the U.S. state of Oregon. The Legislative Assembly is bicameral, consisting of an upper and lower house: the Senate, whose 30 members are elected to serve four-year terms; and the ...

to draft their own bill aimed at limiting what was perceived as excessive growth. Their 1979 tax relief package aimed to stem rising property taxes, reduce individual taxpayer burden, and limit spending from the state's general fund. Under the bill, property owners received a 30-percent reduction in property taxes, and the state would be required to rebate "excessive" surplus to the taxpayers. The ''kicker law'' was overwhelmingly approved by voters in 1980, but the first kicker rebate did not occur until 1985 when the calculated revenue exceeded the forecast revenue by 7.7 percent ( $88.7 million). The kicker was triggered again in 1987 (16.6%, $224.2 million) and 1989 (9.8%, $175.2 million). In 1991 and 1993, budget problems relating to Ballot Measure 5 of 1990 prompted lawmakers to suspend the kicker, withholding $246 million from taxpayers. Through 2007, rebates occurred five more times; 1995 (6.27%, $162.8 million), 1997 (14.37%, $431.5 million), 1999 (4.57%, $167.3 million), 2001 (6.02%, 253.6 million), and 2007 (18.6%, $1,071.2 million). In 1999, Measure 86 was drafted and referred to voters. This measure, which was passed with 62% approval, placed the kicker law into the

. Also as a result of the measure, an emergency vote must be called to cancel the distribution of kicker checks. Opponents of the kicker law claim it prevents Oregon from retaining an appreciable

economic surplus In mainstream economics, economic surplus, also known as total welfare or total social welfare or Marshallian surplus (after Alfred Marshall), is either of two related quantities: * Consumer surplus, or consumers' surplus, is the monetary gain ...

. Without an ample surplus, the state is more vulnerable to the effects of

recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...

, such as in 2003 as when

police The police are a Law enforcement organization, constituted body of Law enforcement officer, persons empowered by a State (polity), state, with the aim to law enforcement, enforce the law, to ensure the safety, health and possessions of citize ...

forces were cut,

schools A school is an educational institution designed to provide learning spaces and learning environments for the teaching of students under the direction of teachers. Most countries have systems of formal education, which is sometimes compulsor ...

were downsized, and

healthcare Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health pro ...

was restricted. Since the very beginning of the kicker in 1980, legislators have looked to find ways around this. In 2007, lawmakers in Oregon succeeded in diverting funds from the ''corporate'' kicker to a surplus account called the ''rainy day fund''. Further movements to eliminate the kicker altogether are underway, backed by lawmakers such as prior

Governor A governor is an administrative leader and head of a polity or political region, ranking under the head of state and in some cases, such as governors-general, as the head of state's official representative. Depending on the type of political ...

Ted Kulongoski Theodore Ralph Kulongoski ( ; born November 5, 1940) is an American politician, judge, and lawyer who served as the 36th Governor of Oregon from 2003 to 2011. A member of the Democratic Party, he served in both houses of the Oregon Legislative As ...

. In 2012, Oregon voters passed Ballot Measure 85, which reformed the corporate kicker so that if any rebate was due, the funds would be returned to the general fund and specifically allocated to augment public school funding.

Distribution

In 2007, the average kicker refund for personal incomes was $263, while the median refund was $113. The wealthiest one percent of Oregon taxpayers received one-fifth of the refund, as the kicker refund is proportional to the tax paid. That same year, eighty-six percent of the corporate refund went to multistate corporations, and four percent of the total number of corporations received ninety-three percent of the corporate refund.

References

{{Oregon legislation Taxation in Oregon Economy of Oregon

History

Distribution

See also

References