Half of 2020 Tax Kicker May Go To Transportation

On Wednesday, May 15, Oregon budget officials announced the state will take in over $22 billion to be spent over the next two-year budget cycle, $870 million more than estimates in March projected. This could mean a $1.4 billion tax rebate for Oregonians, but legislators may want to use half of the money for new spending.

Oregon’s “kicker” law requires the state government to refund any taxes collected beyond expected revenue levels, in this case $1.4 billion, which works out to be a $330 tax credit for the median taxpayer (and up to $14,000 for the top 1% of earners). However, House Speaker Tina Kotek has introduced a bill which would use half of that $1.4 billion kicker toward funding transportation projects.

Kotek’s bill would split up the money in three parts: $260 million for “seismic upgrades” to the Abernathy Bridge on I-205 in Oregon City, $220 million to upgrade freight vehicles to relatively cleaner diesel engines, and $220 million into a new “Zero Emission Fund” to finance transitioning to zero-emissions technologies, like electric cars.

Kotek contends that the size of the 2020 rebate would be comparable to previous years’ rebates, even after putting half the funds toward the bill. The state has issued a “kicker” for the past three budget cycles.

The Speaker does not appear to have a coalition ready to support this bill, as Gov. Brown was not briefed on it and Senate Majority Leader Peter Courtney (D-Salem) only heard about it “in passing.”

In March, the Joint Committee on Ways & Means warned that extra revenue this year would be temporary. Their budget called for 5 percent cuts to most state programs (with the exception of health care and education), and saving additional funds in case of an economic downturn. Governor Kate Brown responded similarly to news of the windfall, saying the money should be saved or put toward the state’s pressing needs, like housing, foster care, and the public pension (PERS) debt.

By Ian MacRonald