Shell Game: How HB 4125 steals your kicker refund

Salem’s Shell Game: How HB 4125 Redefines the Kicker Out of Existence

By Taxpayers Association of Oregon
OregonWatchdog.com

Oregon taxpayers look forward to the “Kicker” as a reward for a growing economy and a check on government overspending. Most of us know that if the state brings in too much money, we get a credit back on our taxes. But what many don’t realize is that the Kicker is based on a delicate mathematical formula—and House Bill 4125 is designed to rig that math so the state never has to pay you back again.

Moving the Goalposts

The Kicker triggers only if actual state revenue is more than 2% above the state’s original forecast at the end of the legislative session. HB 4125 changes how that forecast is calculated, virtually guaranteeing a “miss.”

The bill mandates that state economists use data projections toward the lower end of the accepted range. Additionally, it forces the “Close-of-Session” forecast to include the greatest positive deviation between past predictions and actual collections from the last ten years.

In plain English, the state’s economists are being told to artificially inflate their “expected” revenue number. If the official estimate is hiked up by these accounting rules, it becomes nearly impossible for the actual revenue to beat that number by 2%.

The Diversion Tactic

Even if the economy is so strong that it beats these rigged estimates, HB 4125 has a backup plan to keep your money in Salem. The bill creates the One-Time Emergencies and Finance Fund.

The Department of Revenue would be required to calculate the difference between the “old” Kicker rules and these new “low-ball” rules. That specific amount of money—your money—is then transferred into this new fund to pay for government debt, state pension liabilities (PERS), and capital projects.

The Bottom Line

By manipulating the methodology behind the forecast, HB 4125 attempts to bypass the constitutional intent of the Kicker. Instead of the surplus being returned to the taxpayers who earned it, the money is diverted into a permanent government slush fund before it ever reaches your pocket. At the Taxpayers Association of Oregon, we call this what it is: a sophisticated raid on your Kicker.