Like a casino that changes the Blackjack odds by shifting from one hand-held deck to multiple decks, critics of Oregon’s kicker law are preparing for a stealth raid on your wallet.
State economist, Carl Riccadonna, hired in August by Gov. Tina Kotek, “has taken it upon himself to get the forecast more in line with reality” KGW reported in November. In other words, to try to minimize (or eliminate) it.
“I think that the truing up of the calculation under the new chief economist is really going to be helpful to provide stability when we are trying to do budgeting every two years, ” Kotek said in November.
The Oregon Legislature passed the “Two percent kicker” law in 1979. It requires the state to refund surplus revenues to taxpayers when actual General Fund revenues exceed the forecast amount by more than two percent. The personal income tax kicker money comes from all state General Fund revenue sources, except for corporate tax revenues. Personal income tax is the largest contributor. In 2000, voters acting on a legislative referral put a large portion of the 2% surplus kicker statute into the state constitution (Article IX, Section 14).
In October 2023, the Oregon Office of Economic Analysis (OEA) confirmed a $5.61 billion revenue surplus in the 2021-2023 biennium, triggering a tax surplus credit, or kicker, for the 2023 tax year. The surplus—the largest in state history[1]—was returned to taxpayers through a credit on their 2023 state personal income tax returns filed in 2024.
Democrats, never at a loss for ideas on how to spend more government money, in league with unions and liberal special interest groups, are eager to see the kicker refunds throttled.
Because the kicker is in the Oregon Constitution, a ballot measure would need to be referred to the people to get them to surrender their Kicker refund, but don’t put it past the Democrat-dominated legislature to get creative to facilitate higher government spending.
“Oregon’s inaccurate revenue forecasting costs billions needed for critical public services,” said a memo Service Employees International Union Local 503, Oregon’s largest public-sector union, sent recently to Gov. Kotek.
SEIU research director, Daniel Morris, has complained that poor economic forecasting has resulted in too much money going out the door as kicker refunds. “Over the last five forecasts it’s been embarrassingly bad,” he told OPB. “There are real consequences for the families of Oregon.”
Joe Baessler, interim executive director of American Federation of State, County and Municipal Employees Council 75, has lambasted the kicker as well. “They’re deciding to under-inflate our revenue,” said Baessler. “It forces budgeting that is not in line with how much revenue is coming into the state and rolls back the amount of money we have for services that Oregonians want.”
The Oregon Center for Public Policy regularly rails against the kicker too. “Oregon’s kicker is a policy that worsens income inequality, racial inequality and geographic inequality,” says the Center.
With a new state economist committed to forecast reform, Democrats holding a supermajority in the Oregon House and Senate, Tina Kotek serving as governor, and special interest groups salivating over a bigger state budget, the generous kickers of the past are in jeopardy. Count on it.
[1] Personal Income Kicker History
| Two Percent Kicker, Biennia 1979-81 to 2021-23 | ||||
| Biennium | Tax Year | Surplus/Shortfall ($ millions) | Percent | Mean ($) |
| 1979-81 | 1981 | -$141 | None | – |
| 1981-83 | 1983 | -$115 | None | – |
| 1983-85 | 1985 | $89 | 7.70% | $80 |
| 1985-87 | 1987 | $221 | 16.60% | $190 |
| 1987-89 | 1989 | $175 | 9.80% | $130 |
| 1989-91 | 1991 | $186 | Suspended | – |
| 1991-93 | 1993 | $60 | None | – |
| 1993-95 | 1994/5 | $163 | 6.27% | $110 |
| 1995-97 | 1996/7 | $432 | 14.37% | $290 |
| 1997-99 | 1998/9 | $167 | 4.57% | $100 |
| 1999-01 | 2000/1 | $254 | 6.02% | $160 |
| 2001-03 | 2002/3 | -$1,249 | None | – |
| 2003-05 | 2004/5 | -$401 | None | – |
| 2005-07 | 2006/7 | $1,071 | 18.60% | $610 |
| 2007-09 | 2008 | -$1,113 | None | – |
| 2009-11 | 2010 | -$1,050 | None | – |
| 2011-13 | 2012 | $124 | None | – |
| 2013-15 | 2014 | $402 | 5.60% | $210 |
| 2015-17 | 2016 | $464 | 5.60% | $250 |
| 2017-19 | 2018 | $1,688 | 17.17% | $910 |
| 2019-21 | 2020 | $1,898 | 17.34% | $990 |
| 2021-23 | 2022 | $5,619 | 44.28% | |
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