A White-Collar Recession Could Impact a $978 Million Kickback to Oregon Taxpayers
Oregon taxpayers could receive a $978 million kickback from the state Department of Revenue, but economist Josh Lehner has warned that a white-collar recession could dilute the windfall.
Economic uncertainties could impact the sixth consecutive kicker refund, payable in 2026, state economist Josh Lehner told lawmakers yesterday (Wednesday).
K-12 Schools Will Also Benefit
Oregon has a unique ‘kicker’ law that paves the way for taxpayer windfalls when revenue from income tax payments exceeds 2% of state economists’ estimations.
In May, the taxpayer kickback was estimated at $582 million, but this has now escalated by $405 million to a whopping $987 million. Oregon taxpayers will receive their windfall in 2026.
The good news does not end there. Corporate taxes will sweeten K-12 school budgets in 2026 with a $883 million kicker refund.
But there are Looming Economic Uncertainties
Referring to looming economic uncertainties, Lehner says layoffs in the semiconductor, footwear, and apparel industries and the pending closure of several timber mills could create a white-collar recession in Oregon.
‘There are plenty of uncertainties ahead,’ says Lehner, adding that layoffs at Intel and Nike would affect high-wage earners.
The timber industry is a backbone income earner for the state, and the announcement by several timber mills in Portland of pending closures has dampened the economic outlook. Lehner says timber, the semiconductor, and the footwear and apparel industries are the three driving forces of Oregon’s economy, ‘and they are all down.’
It Will Take Years for Ranchers to Recover from Economic Losses that Wildfires Have Cause
Lehner told lawmakers that wildfire damage, particularly in Eastern Oregon, has already scorched one-and-a-half million acres of ranch land. Lehner says it will take years for ranchers to recover from the economic loss they have suffered, referring to cattle consumed by the flames and land severely damaged by the wildfires.
Takeaways
Oregon Governor Tina Kotek says she is encouraged by the predicted taxpayer kickback made possible by a stable economy and healthy workforce.
Republicans, however, are less optimistic.
Republicans were less optimistic, with Senate Republican Leader Daniel Bonham, R-The Dalles, warning the state to exercise ‘fiscal restraint.’