Oregon legislators might punt on 'kicker' tax reform

SALEM — Oregon voters may face a vote on the state's popular and unique "kicker" tax rebates before they get another kicker check.

Democrats said Wednesday they're determined to put the question to a statewide vote, in a form that probably wouldn't end the rebates but would divert some of the money into state savings accounts.

Their only question is when: This year? Or later?

The rebates, unique among the states, kick back money to taxpayers when the state treasury has collected revenue in excess of more than 2 percent above projections. In 2000, voters put it in the state constitution, meaning voters have the final say on any changes.

The last kicker checks went out in December 2007. If economists are right about a weak economic recovery, it may be at least a few years before the state treasury is flush enough to send out the rebates, often for hundreds of dollars per taxpayer and often right before Christmas.

In a meeting with Oregon journalists in the Associated Press Newspaper Executives group, Democratic Gov. Ted Kulongoski pressed his call for the Legislature to put a kicker measure on the ballot this fall.

Democratic legislative leaders, who have commanding majorities, told the editors and publishers the timing seems wrong this year to get such a measure passed. Republican leaders said they oppose any attempt to "steal Oregonians' kicker refunds."

The knock against the kicker is that Oregon's state budget suffers from roller-coaster dips because it relies so heavily on income tax revenue. What's needed, say Democrats, is to sock away revenue during good times to be used in recessions.

"There's broad agreement that the kicker is stupid fiscal policy," said House Speaker Dave Hunt.

But Hunt said the state's political atmosphere is poisonous after the political struggle between business and public employee unions over Measures 66 and 67 last month, which ended with voters approving higher taxes on the wealthy and on business.

Senate President Peter Courtney said that rift has to heal for kicker changes to win voter approval. "We need the business community and the labor community to come together in a phalanx to support this," he said.

"I want to win," he said. "I want the ball in the end zone."

Both said details of changing the kicker aren't settled enough to get through the current, four-week legislative session, although legislators have introduced some ideas for state reserves.

A constitutional amendment backed mainly by Democrats would set up a reserve fund for excess collections and raise the threshold for kickers to 6 percent. A bill backed by Republicans would rake a portion of state agency balances into a reserve fund.

The proposed constitutional amendment is SJR 45. The bill is HB 3636.

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