Oregon may put an end to tax rebates
Salem, OREGON: Back in 1980, an Oregon initiative to curb government growth required the state to “kick back” surplus revenues to taxpayers when tax receipts exceeded projections by more than 2%. Lately, revenue has been down and Oregonians haven't seen a kicker check in years. If Governor Kitzhaber signs HB 3543 (dead link) that passed the Senate 17-12 this week, it's going to stay that way.
Instead, the state will keep the surplus and taxpayers will be allowed to treat the amount they should have received as a tax credit. That's not an entirely new idea; 'kickers' were treated as refunds against taxes owed until 1995, when a Republican legislative majority got its way with the law. Citing a duty to give people hard proof of the government's fiscal responsibility and to let citizens control how they spent their money, lawmakers converted the rebates to actual paper checks.
Those checks cost money to print and mail, one of the reasons given for reverting to the tax credit scheme. Predictably, the vote went down on a party line. Of the 'noes' cast, all but one came from the GOP. One of those Senator, Jeff Kruse spelled out his party's opposition: “The people of Oregon don't have a lot of respect for the legislative assembly...quite honestly, if we're taking away their check that's sending the wrong signal...whether we're taking their kicker or not.”
While Republicans made their argument on grounds of responsibility and fidelity to taxpayers, so did the Democrats, painting Oregon's grim financial scene as one where the relatively small sum to be saved by ceasing to send out checks is needed.
But is this a prelude to ending ta rebates altogether?
The idea has certainly popped up. The legislature currently has a bill, HB 2211 (dead link), that would do just that, converting all rebates to a “rainy day fund”. Due to a 2000 amendment to the state's Constitution, the legislature needs a supermajority to actually take the tax rebates back outright, so the 2011 session may end without that bill moving forward.
As for the chance that HB 3543 will become law, the Governor's office has declined to comment on Kitzhaber's plans.