Governor asks for reform on 'kicker' refund

SALEM — Gov. Kulongoski says it's time for the Legislature to reform the state "kicker" tax refund now that voters have approved tax increases on corporations and the wealthy.

Kulongoski said the best way to break out of a "boom-and-bust" state budget cycle is changing the law that refunds tax revenues when they exceed projections by more than 2 percent.

Some of that money, he said, should go to an emergency reserve fund he wants to establish as a permanent fixture in the state constitution to cushion the state during an economic downturn.

"To stop this roller coaster budgeting we must require the state to save in the good times and the bad times," Kulongoski said.

The Democratic governor held a news conference Wednesday after voters overwhelmingly approved tax increases for Oregon households with more than $250,000 in income, or $125,000 for single filers.

Voters in the Tuesday special election also boosted corporate minimum taxes that had not changed since 1931, along with the tax rates some companies pay on upper-level profits.

Oregon State University political science professor Bill Lunch said the election results were a cry of pain from voters hurt and made anxious by the Great Recession.

He said the Oregon vote to tax the wealthy and big companies was consistent with voter attitudes in Massachusetts, as reflected by the election of Republican Scott Brown to fill Edward Kennedy's seat in the U.S. Senate, and nationally with the election of Barack Obama as president.

"It can be seen as part of this populist reaction against the powers that be," Lunch said.

Kulongoski said it was time to mend the political divisions created by the long campaign battle over Measures 66 and 67, both referred to voters by opponents through initiative petitions after the Legislature approved them in its 2009 session.

The governor said lawmakers now must find a way to prevent such increases in the future and better balance the state budget.

He suggested several different ways to do it using the emergency fund, including putting half of the kicker returns into it and making sure the fund can never be depleted during a single budget period.

"If we do not tackle this issue, we will never end the cycle of fiscal instability, crisis budgeting and the next inevitable tax increase proposal," Kulongoski said. "And Oregon will never get ahead in good economic times."

Oregon Senate President Peter Courtney said he thinks the issue should be put to a vote at some point. But he said he's not convinced that, the day after the votes were tallied in a political fight over taxes, the timing is right.

"If you put it on the ballot, you want it to win," he said. "If it loses, it'll be gone for 25 years."

Kulongoski said it will take cooperation, and he called for Democrats and Republicans, along with education, labor, government and business leaders to work together for reform in the February special session of the Legislature.

"The emotions of the campaign, as with all campaigns, ran high," the governor said.

"But the election is over and today is a new day. If we want to position Oregon for long-term economic success and stability, we must put our differences aside and come together to build a future that creates opportunity for everyone."

Share This Story