Oregon’s tax kicker law is important

by Richard Leonetti

The Oregonian recently had an editorial about eliminating the Kicker (“Waiting for the income tax kicker to kick” Sarasohn 2/12/14) – I think they mis-characterize the entire purpose of the law.

To gloss over the Kicker as mere revenue forecasting error is to hide its real purpose and importance.

The legislature decides what is needed to fund the state and schools, and sometimes raises taxes if it decides to increase spending levels.  Any unexpected revenues, as occurs when the stock market has a big rise, in pre-Kicker times resulted in a frenzy over what new things to spend the windfall on. The Kicker, in simple terms, says the excess revenue will be returned to the taxpayer instead of new programs (which tend to stick around and raise spending in following years.)

There has been little hesitation to raise fees and taxes when revenue does not cover planned spending and the Kicker just insures that, when the reverse occurs, the unexpected funds are returned to the taxpayers.

In the absence of a State spending limitation, that other states use, taxpayers only protection is a lesser remedy called the Kicker. It is important to keep.