If you are one of the 100 richest people in the state, you’ll receive an average of $800,000 from the Oregon surplus credit, known as the “kicker.”
If you are one of the poorest people who earns no income, or whose only income is social security, you will receive nothing.
The kicker is a strange concoction the state legislature nailed into the constitution in 1979.
There’s no noble goal behind returning the money, just an odd idea that if the state economist is off by more than two percent of its income prediction, the state has to return that money.
That’s an extremely regressive intervention on an otherwise progressive state income tax.
This year is a doozy. Because the budget was off by 44.28%, $5.6 billion is being sent back to taxpayers through a proportional refund. If you had 1 million dollars of taxable income, you receive $43,000 back. If you had 10,000 of taxable income, you receive $430 back — or at least credited against your tax liability.
This approach is so regressive that 70% of the kicker will go to the richest 20% of Oregonians.
And, while the state economist has a particularly erroneous track record — there has been a kicker for the past decade — it’s a structural problem. Anyone who has made a budget realizes that over-projecting income is an unstable approach. Should an economist do that and the state falls short on that income, programs and positions might need to be cut midway. The kicker is a hindrance to state budget management.
If not outright repealing the kicker, reforms could at least transform it into a more progressive structure.
The Oregon Center for Public Policy has proposed a “Working Family Kicker '' in which each Oregonian would receive the same amount, akin to the way federal stimulus checks worked as pandemic relief. Based on this year's $5.6 billion, each Oregonian would receive $2,100, rather than wildly scaled-up amounts for the highest-income Oregonians.
The Working Family Kicker is structured so people with no income, or with tax-exempt income such as social security, would be able to access funds. The kicker would function more like a basic income — although a wildly unpredictable one. Street Roots witnessed how these one-time payments could change lives during the early pandemic when we connected people on the streets to nearly $750,000 in stimulus checks. We saw people gain small increments of stability and with it, potential.
This spring, though, the kicker is coming. You’ll see it on your taxes as a credit. There are ways to donate it to a handful of nonprofits as well as a school fund.
I suggest that if you have your basic needs met and don’t need it, you decide where you think it will make the most impact, improving the lives of those who are most certainly not reaping its benefits.
There are many extraordinary causes, organizations and mutual aid efforts. I’ll make a pitch for Street Roots. We are attempting a large feat: renovating a building to expand support of unhoused people to earn income and stabilize lives. We are building a wellness center with showers and laundry, expanding income opportunities and job training, and supporting the mental health and belonging of people struggling to survive.
These last couple of years have been challenging for a renovation project like the Street Roots building because of disrupted supply chains and steep inflation. We've also prioritized renovating an old building on a prominent corner, while repurposing materials where we can, and we received a historic renovation honor for this work from the city. That, too, has included unexpected costs, including most recently a collapsed electrical conduit.
We need to raise the final funds for this project this spring. It’s a barn raising of sorts, where we are asking everyone to kick in what they can. We'd be honored if you considered reinvesting your kicker in Street Roots. Kick it forward!
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