Bill would keep kicker for budget reserves, education



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SALEM, Ore. (AP) — An Oregon Democrat introduced a bill Thursday that would cancel anticipated "kicker" tax rebates and use the money instead for education and the state's reserve fund.

The move by Rep. Tobias Read of Beaverton comes a week after economists projected that more than $470 million will be returned to Oregonians when they file their taxes next year.

Read's bill faces long odds. It would require a bipartisan vote of two-thirds of the House and Senate. Republicans oppose taking money promised to taxpayers, and senior Democrats have acknowledged it's unlikely to happen.

Still, Read says the bill would help stabilize Oregon's volatile budget and provide badly needed money for education.

"Putting it in reserve funds and investing it in education are the things that are going to do the most good for the most people," Read said.

Republicans object, saying voters have approved the kicker law and can better spend their own money.

"My prediction is, for this one party in charge of Oregon, it will never be enough," said Rep. Mike McLane of Powell Butte, the House Republican leader. "They want your money, they want your kicker, and they're prepared to blame you for their bad priorities."

Oregon's kicker law applies when tax collections during a two-year budget cycle exceed expectations by at least 2 percent. When that happens, unanticipated money is kicked back to taxpayers as a credit on the following year's tax return.

Oregon's improving economy combined with tax increases imposed after the current budget was approved helped raise revenue prospects.

Read's bill would retain half of the kicker for the state's rainy day fund, to be spent in the next economic downturn. The other half would be divided evenly between K-12 schools and higher education.

Education interests are fighting hard for more money. K-12 schools say their approved funding will require some schools to increase class sizes or cut programs. Universities and community colleges say more state funding would keep tuition increases in check.

The kicker was last triggered in 2007, when more than $1 billion was returned to taxpayers. That year, the Legislature mustered the two-thirds majorities to retain the corporate kicker, which is calculated separately based on corporate tax collections. In 2012, it was essentially eliminated, with unanticipated corporate revenue being earmarked for education instead of returning to businesses.

Lawmakers last retained the personal kicker in 1991.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Jonathan J. Cooper

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