Although Oregon’s tax collections have stabilized after several quarters of unexpectedly rapid growth, the state expects to pay out a record-breaking $5.6 billion through its “kicker” rebate, according to state economists, while lawmakers expect to have more to spend on infrastructure and social programs.
The previous record kicker was $1.9 billion in 2022.
Taxpayers will receive a median $980 credit when they file their 2023 taxes from the rebate, which is activated when revenues collected exceed official projections, according to the state’s economists.
The encouraging news in the quarterly forecast presents an opportunity “to invest in housing production and other urgent needs to support Oregon families and the state’s long-term economic growth,” Oregon Gov. Tina Kotek said in a statement.
“Our office will certify the kicker in coming weeks, but currently $5.6 billion will be returned to Oregon taxpayers next filing season,” economists wrote in the quarterly forecast.
Economists predict the top 1% of earners, with adjusted gross incomes higher than $466,700, will receive $44,600, while the median taxpayer, who earns between $35,000 and $40,000, could net $980.
The forecast represents the state’s third rosy outlook this year, and indicates the state is in an “inflationary boom,” with growth outpacing expectations, though economists added robust growth is stabilizing.
It wasn’t just Kotek, who took the forecast as a signal to champion pet projects.
Both Republicans and Democrats are asking for investments in services and infrastructure, including housing, roads and water.
“Having a strong economy is essential to continuing to deliver on the issues Oregonians care about most: homelessness, access to behavioral health and health care, community safety and education,” said Oregon House Speaker Dan Rayfield, D-Corvallis.
“This stable forecast reaffirms that we can continue to find creative solutions in our ongoing efforts and provide oversight that leads to tangible outcomes like securing family wage jobs and connecting people with addiction and mental health services,” Rayfield said.
Lawmakers approved a $31.9 billion state budget for the next two years, but the windfall could mean they can add extra funding during the upcoming short legislative session that begins in February.
“We must capitalize on this moment with real assets — not empty policies — to leave our state better off for the next generation,” Sen. Republican Leader Tim Knopp, R-Bend, said in a statement. “This is the time to boldly invest in infrastructure like roads, sewer systems, and water for all Oregonians who want to build or buy a home affordably.”