Kicker (Oregon tax rebate)
Encyclopedia
The Oregon tax rebate, commonly referred to as the kicker, is a rebate
given to both individual and corporate taxpayers in the U.S. state
of Oregon
when a revenue surplus exists. The Oregon Constitution
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 passed by ballot measure in 1980, and was entered into the Oregon Constitution
with the passage of Ballot Measure 86 in 2000.
The Oregon Department of Revenue
distributes the rebate 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
, which prevents deficits.
In 2007, the average kicker refund for personal incomes was $263, while the median refund was $113. The wealthiest one percent of Oregon taxpayers received one-fifth of the refund. This distribution is explained by the fact that Oregon has five state income tax brackets, from five to eleven percent, which put most of the income tax burden on high-income earners.
That same year, eighty-six percent of the corporate refund went to multistate corporations, and four percent of the total number of corporations received ninety-three percent of the corporate refund.
all over the country to draft tax cut
plans; notably California's Proposition 13
, which inspired the Oregon legislature
to draft their own bill aimed at limiting what was perceived as excessive growth. Their 1979 tax relief package aimed to stem rising property taxes, reduce individual taxpayer burden, and limit spending from the state's general fund. Under the bill, property owners received a 30-percent reduction in property taxes, and the state would be required to rebate "excessive" surplus to the taxpayers.
The kicker law was overwhelmingly approved by voters in 1980, but the first kicker rebate didn't occur until 1985 when the calculated revenue exceeded the forecast revenue by 7.7 percent ($
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.
Throughout the 1990s and 2000s, rebates have 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 Oregon Constitution
. 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
. Without an ample surplus, the state is more vulnerable to the effects of recession
, such as in 2003 as when police
forces were cut, schools were downsized, and healthcare 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
Ted Kulongoski
.
Rebate
Rebate can refer to:* Rebate or rabbet, a woodworking term for a groove* Film rebate, the term for the border around photographic film- Money :* Rebate , a type of sales promotion used in marketing* Tax rebate, a reduction in taxation demanded...
given to both individual and corporate taxpayers in the U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
of Oregon
Oregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
when a revenue surplus exists. The Oregon Constitution
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. This contains most of the rights and privileges granted in the United States Bill of...
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 passed by ballot measure in 1980, and was entered into the Oregon Constitution
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. This contains most of the rights and privileges granted in the United States Bill of...
with the passage of Ballot Measure 86 in 2000.
The Oregon Department of Revenue
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; gift and inheritance taxes; and tobacco taxes and those...
distributes the rebate 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
Balanced Budget Amendment
A balanced-budget amendment is a constitutional rule requiring that the state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government....
, which prevents deficits.
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. This distribution is explained by the fact that Oregon has five state income tax brackets, from five to eleven percent, which put most of the income tax burden on high-income earners.
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.
History
Rising concerns over property taxes and inflation in the 1970s urged lawmakersLegislator
A legislator is a person who writes and passes laws, especially someone who is a member of a legislature. Legislators are usually politicians and are often elected by the people...
all over the country to draft tax cut
Tax cut
A tax cut is a reduction in taxes. The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. Due to the perceived benefit in growing real incomes among tax payers politicians have sought to...
plans; notably California's Proposition 13
California Proposition 13 (1978)
Proposition 13 was an amendment of the Constitution of California enacted during 1978, by means of the initiative process. It was approved by California voters on June 6, 1978. It was declared constitutional by the United States Supreme Court in the case of Nordlinger v. Hahn,...
, which inspired the Oregon legislature
Oregon Legislative Assembly
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 House of Representatives, with 60 members elected to...
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 didn't occur until 1985 when the calculated revenue exceeded the forecast revenue by 7.7 percent ($
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
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
Oregon Ballot Measure 5 (1990)
Ballot Measure 5 was a landmark piece of direct legislation in the U.S. state of Oregon in 1990. Measure 5, an amendment to the Oregon Constitution , established limits on Oregon's property taxes on real estate....
of 1990 prompted lawmakers to suspend the kicker, withholding $246 million from taxpayers.
Throughout the 1990s and 2000s, rebates have 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 Oregon Constitution
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. This contains most of the rights and privileges granted in the United States Bill of...
. 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
Economic surplus
In mainstream economics, economic surplus refers to two related quantities. Consumer surplus or consumers' surplus is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay...
. Without an ample surplus, the state is more vulnerable to the effects of recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
, such as in 2003 as when police
Police
The police is a personification of the state designated to put in practice the enforced law, protect property and reduce civil disorder in civilian matters. Their powers include the legitimized use of force...
forces were cut, schools were downsized, and healthcare 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
Governor of Oregon
The Governor of Oregon is the top executive of the government of the U.S. state of Oregon. The title of governor was also applied to the office of Oregon's chief executive during the provisional and U.S. territorial governments....
Ted Kulongoski
Ted Kulongoski
Theodore R. "Ted" Kulongoski is an American politician, who served as the 36th Governor of Oregon. A Democrat, he has served in both houses of the Oregon Legislative Assembly, as the state Insurance Commissioner, the Attorney General, and an Associate Justice on the Oregon Supreme Court.-Early...
.