Some Oregon Democrats want to change your kicker payout

State economists during the May revenue forecast predicted the 2024 kicker rebate would grow to a record $5.5 billion. But some lawmakers want to ask voters to end the annual taxpayer payout.

The kicker, passed by voters in 1980, returns money to Oregonians when the state's revenue is 2% higher than forecasted.

A public hearing was held Wednesday for three bills that propose to reform the kicker: Senate Bills 502 and 774, and Senate Joint Resolution 26.

Oregon kicker:5 things to know

What would the bills do?

SB 502, sponsored by Sen. Jeff Golden, D-Ashland, would require the Oregon Department of Revenue to distribute equal $1,000 payments to Oregon taxpayers instead of the current formula that bases payments on the amount of taxes paid. The bill would then transfer the remaining kicker funds to a new Oregon Wildfire Mitigation and Adaptation Fund.

The bill was originally assigned to the Senate Committee on Natural Resources but was moved to the Senate Committee on Finance and Revenue. During the work session in March to do so, Golden said the bill came from concern that the Legislature had not found a long-term funding source for wildfire programs.

During the public hearing, Golden pointed to "stark facts," noting that Oregon is increasingly at risk of destruction from large and intense wildfires.

"The list of partially and completely destroyed communities grows longer every year. Those that have escaped the flames are increasingly engulfed by toxic smoke for days or weeks at a time," he said. "Beyond the suffering of Oregon families — which I could describe for the rest of our meeting — the damage to infrastructure and community life is beyond imagination."

He said the cost to the state each wildfire season now runs in the billions of dollars and suggested the state needs a funding source for a comprehensive wildfire program.

Senate Bill 762 was passed to establish a wildfire program and directed $220 million to wildfire preparedness. But that money came from the general fund, a source that cannot continue to "shoulder this burden," Golden added.

Golden said the proposed measure would provide a one-time investment using a third of the kicker toward the wildfire program. The other two-thirds of the $5.5 billion would go to eligible taxpayers.

Golden also said he would be open to maintaining the current formula for payments instead of providing taxpayers with the same amount regardless of their tax payments.

His motivation, he stressed, is to protect Oregon communities from catastrophic wildfires.

SB 774 and SJR 26 are tied together. The bills would repeal the personal kicker.

Both are sponsored by Sen. Lew Frederick, D-Portland, and Sen. Kayse Jama, D-Portland. SB 774 would go into effect only if Oregon voters pass SJR 26. The resolution proposes amending the state constitution and ending the Oregon kicker. The bill would repeal the kicker law beginning with the 2023-25 biennium.

The corporate kicker would remain. It is predicted to reach $1.8 billion and under a 2012 measure will be directed to the state's general fund for K-12 education.

"The kicker is a uniquely Oregon creature and it is a unique burden on our state and the people of our state," Frederick said Wednesday.

Oregon is experiencing unprecedented growth coming out of the COVID-19 emergency but as Oregon's "most vulnerable" need more assistance, the state is unable to use the resources it has, he said. An improved revenue forecast does not mean more revenue to use in programs but instead goes "right back out the door," Frederick said.

"I get asked every day to fund a number of incredible programs," he added. "There are dozens if not hundreds of bipartisan bills sitting in the Ways and Means [committee] that are going to die because we don't have the money to fund."

Lawmakers disagree on proposals

Republicans have warned Democrats against introducing legislation pulling back on the kicker, releasing statements after the March and May forecasts in celebration of the historic predictions.

"We expect the kicker to be rightfully returned into the hands of hardworking Oregonians," House Republican Leader Vikki Breese-Iverson, R-Prineville, said in a statement following the forecast.

Sen. Lynn Findley, R-The Vale, echoed the disagreement with kicker reform during the public hearing.

He is a member of the Senate Committee on Finance and Revenue. The kicker fund is not the state's money to do with what they see fit or a wealth redistribution program, Findley said. He suggested, instead, figuring out how state economists "can do a better job in their tools."

"The kicker is fiercely protected and fiercely guarded in my district," Findley said. "People pay a lot of attention to it because it is their kicker. It's always been their money."

He said he and other lawmakers had received hundreds of emails about the proposed measure. Dozens of people were registered to testify remotely but only a couple appeared. Both Oregonians who testified spoke in opposition.

Hundreds submitted testimony online.

Rep. Khanh Pham, D- Portland, also supports policy that would change the kicker.

Pham is in support of a different resolution that is currently not scheduled for any hearings: House Joint Resolution 21 would ask Oregon voters to approve an amendment that would equally divide surplus revenue funds among taxpayers instead of proportionately by tax liability.

According to one estimate from the Oregon Center for Public Policy, lowest-income Oregonians' kicker refund would rise from an average of $60 to $1,740 under the policy.

“Changing Oregon’s kicker would make a big difference for the typical Oregonian household," Pham said in an email to the Statesman. "I support the idea of The Working Families Kicker, which would send out equal kicker amounts to all tax filers. This way, a significant majority of Oregon households would get a bigger kicker than they would under the current system.”

Dianne Lugo covers the Oregon Legislature and equity issues. Reach her atdlugo@statesmanjournal.com or on Twitter @DianneLugo