By Rep. E. Werner Reschke
As a legislative member of the House Interim Committee on Revenue, I heard firsthand the most recent report of glowing economic news from Oregon’s state economists. Consumer spending, roughly two-thirds of the economy, remains strong, job prospects are still good and overall wages continue to climb. Because Oregon’s economy closely follows the U.S. economy, we can be thankful to Republicans at the federal level for the Tax Cuts and Jobs Act passed at the end of 2017. While it is debatable whether the Tax Cut and Jobs Act created a one–time bump in the economy or not, what is certain is that consumer confidence and employment numbers, especially for minorities, are very good.
One of the results from this great economy is a boom in to state tax revenue — once again at record levels. An outcome from this surge in state revenue is that the kicker (a constitutionally mandated rebate to Oregon taxpayers) will be the third largest highest in state history.
Oregon is the only state in the Uunion with such a taxpayer rebate. It is one of those things that makes Oregon a unique and special place, just like the Oregon’s landmark Bottle Bill, Oregon’s public beaches law and Oregon’s reforestation act.
The kicker’s main purpose is to ensure state government doesn’t grow too fast. After serving my second term in Salem, I have quickly learned that the temptation politicians face the temptation is to spend the money — all the money — as fast as possible, sometimes with little concern about the future. Therefore, the kicker ensures in years where revenue exceeds the state’s estimate by 2% that the excess is returned to the people who,in essence, overpaid. For corporations, the additional revenue is redirected to K-12 public education.
This year’s kicker will yield the average Oregon taxpayer a rebate of nearly $350 on their future tax returns. In my view, the best way to keep our economy growing is to return this money to the people who earned it — it’s one of the best and most effective economic development plans ever created. I believe that working families, not politicians and government bureaucrats, are the ones who are better equipped to wisely spend, invest and save this excess revenue. The now defunct Soviet Union learned that lesson the hard way. Even Communist China has moved towards a market focused-economy in order to provide the jobs and economic certainty that its people require.
As most of us know, growing our personal budgets to match our income — especially when that income is boosted by a potential one-time circumstance — is a certain recipe for disaster when income eventually drops. State government should heed this sound financial advice when playing around with the idea of keeping the kicker, in order to expand the current government project in vogue that day. Oregon’s constitutional kicker law makes sure the scope and spending of state government stays within certain limits. Moreover, the kicker also helps keep Oregon’s economy moving forward by returning the excess to the engine that drives Oregon’s economy — you.
As we move closer to the legislative short session in 2020, remember as a taxpayer that the kicker is your money. It is returned to you after all government budget obligations have been fulfilled. The kicker is a constraint on the political temptation to grow government beyond its means, and it’s a reward to you for helping to create a strong Oregon economy. Take pride in Oregon’s kicker law as it celebrates the real heroes in Oregon, the hard-working people of Oregon.
E. Werner Reschke is the State Representative for Southern Klamath & Lake Counties. He grew up Oregon and worked for three Fortune 500 companies, before running his own business for nearly two decades. He is currently serving his second term in the Oregon House of Representatives.