Understanding the “Kicker”

Think of the state budget like the cost to paint your bedroom. Last year the painter wanted $75 but this year, inflation you know, he says the price is $80. So you approve the price and the painter paints away. When it is time to pay you do not have four $20 bills so you give him a $100 bill and expect $20 in change.

Those who do not like the kicker would say: “Whoa, you have $100 so I will just keep the extra $20 for the new compressor I need.” Well, the kicker says “no” and since $80 was all that was planned to be spent the $20 must be “kicked back.”

The people put it in the Oregon Constitution that we get the “change” whenever tax collections etc. are greater than 2% higher than planned spending.

It is not just the $20 that is important but, the future spending that would result. In the next biennium the legislature would tend to look for an inflationary increase above the $100 instead of $80. So as the years pass the budget would grow at a rate much higher than inflation which it did in the pre-kicker days.

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Posted by at 06:51 | Posted in Measure 37 | 25 Comments |Email This Post Email This Post |Print This Post Print This Post
  • PanchoPdx

    The kicker is the only spending brake in the constitution. What we really need a constitutional spending limit, until then, the kicker is better than nothing.

  • Jason Williams

    Taking the business kicker is like saying to businesses…”We will continue to penalize you if you continue to outperform economic expectations and increase productivity.”. In terms of spending limit, it would help government be disciplined like these successful businesses.

    • Steve

      Perfectly said! Both the personal and corp. kicker should be left alone. I’d hate to see Oregon drive more people and business’ out of this state.

  • Ditto … Ditto … and Ditto. Spending limits in the future … kicker until then.

  • Ken

    The kicker returns funds if income exceeds the budget by 2 percent. Does that mean that the state keeps that 2 percent and refunds whatever is more than that? If so, the state would have another quarter-billion dollars in this biennium to stick in a rainy day fund. DHS budget holes aside, am I missing something?

    • Richard Leonetti

      The whole amount is returned. From 0 up to 2% the state can keep whatever that is. When it reaches 2%, then the whole amount including the 2% must be sent back.

      Thanks to Sen. Gordon Smith, when he was in the Oregon Legislature, these checks come out a little before Christmass.

  • Jesse O

    That’s right. Figuring out what it will cost, and what your income will be, to provide billions of dollars of health care, education, transportation, and other services to millions of Oregonians is like spending $100 to paint a room.

    And, the war in Iraq is like a tug of war between two people.

    Simple minds, simple solutions.

  • Marvin McConoughey

    If I were attempting to end the kicker all together, I would first seek to end the corporate kicker. Hinting to corporations that giving up the kicker would be better than a large legislatively imposed income tax increase would be a powerful motivation. Then, having stung the corporations, a move to eliminate the kicker for private citiizens would not encounter corporate opposition, and the argument could be made that what is fair for corporations is also fair for others. Of course, our government could not be that cynical, could it?

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