by Rep. Matt Wand (R-Troutdale)
Former state Rep. Brent Barton has been calling for the elimination of tax “kicker” refunds to Oregonians. Eliminate the kicker refund, Barton writes, and the state’s finances will stabilize and we’ll earn a much-coveted “AAA” from bond rating agencies.
Repealing the kicker may impress some Wall Street bankers, but it’ll do little to stabilize state finances and absolutely nothing to improve our economy and put people back to work.
Oregon voters placed the kicker in the Oregon Constitution as a reaction to Salem’s spending habits. Their suspicions are well-founded. Every time the Legislature “suspended” the kicker, most recently the corporate kicker in 2007, Salem spent every penny and failed to stabilize the state’s revenues.
We have no reason to believe this time it will be any different. During Barton’s single term in the Oregon House, the 2009 Legislature raised taxes by $1.6 billion while increasing overall state spending by 18 percent, all during a historic recession. This kind of spending, with or without the kicker, is not a good recipe for fiscal stability.
Rather than eliminating the kicker, a better solution is to require the Legislature to set aside 1 percent of general fund revenue for a rainy day fund every biennium. The plan is simple because it forces state government to save money before it spends it all.
Rather than waiting years for the kicker to kick in, this proposal would provide consistent savings to protect vital services during an emergency. To earn an AAA rating, Oregon needs an AAA economy.
Rather than extracting more revenue, government should create an environment in which businesses can succeed and hire. We should also provide tax relief to families and low-income Oregonians. Last session, I supported legislation that would have provided a $500 child tax credit and would have adjusted the personal income tax brackets to reduce the burden on those who are suffering during this economic downturn. When Oregonians have more money in their pockets, they will spend it at local businesses, help create jobs and generate more tax revenues for state and local governments.
With more money in the economy, nonpartisan analysts in Salem have estimated this legislation would have created over 19,000 jobs. Unfortunately, it has been challenging to pass measures to encourage businesses to hire unemployed workers, to reduce excessive regulations on businesses seeking to locate and expand in Oregon, and to provide tax relief to families and low-income Oregonians.
The Legislature should reconsider these solutions when it reconvenes in February. Barton’s argument for eliminating the kicker ignores the fact that Oregon is still mired in a deep economic downturn. Raising taxes will not create more jobs, and over the long term will not bring long-term stability that Barton and others are promising.
As long as Oregon’s economy continues to struggle, an AAA rating alone won’t solve our problems. We need an AAA economy, with a consistent savings plan and a healthy business environment to secure Oregon’s long-term stability and prosperity.