News of a new kicker and kicker threat

By Taxpayers Association of Oregon
OregonWatchdog.com

The latest economic forecast shows that the economy is improving better than expected and has resulted in $1.8 billion in over-collected tax surplus.  That money is projected to translate into a $1.8 billion kicker for 2025 and be paid out to people in 2026.

News of a possible kicker threat emerges by the fact that the State of Oregon is trying to use a different economic forecast model to better predict the economy so that surplus do not happen as much.   A better forecast to base the budget upon is good — but if the model ends up over-shooting upcoming revenue (as compared to safer under-forecasting), then you have a brand new problem.   When this happens, the State lawmakers have budgeted their two-year budget and under-performing forecasts means the revenue they were expecting (and partially spent) is not coming in.  Then lawmakers are cornered into making cuts or raising taxes.

They say the current system is not working because $5 billion in over-collected funds were returned to taxpayers this year.  Average kicker refund was over $900.

Yet, despite the kicker the state government two-year budget grew by 20%!

Oregon State government is bigger than the average state government per-capita and it still grew 20%.

And it still had enough surplus to return to taxpayers.

If there was no kicker, then that $5 billion surplus would have been spent by politicians and would have grown the budget by that big making it difficult to fund it next time without the surplus.

We wish the media would report that every-time the surplus kicker kicks back to people that they would also mention Oregon government grew 20%.

Lawmakers should should acknowledge their big spending ways under the current system while also recognizing the big problems if they change the economic forecast too much that it causes over-forecasting and big budget crunches.

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