85 Billion Reasons to Appreciate the Kicker
The kicker isn't a tax break for the rich. It's a mechanism to curb out-of-control spending.
New residents to Oregon quickly discover the strangeness of our public policies. We don’t pump our own gas, we don’t have a sales tax, and the state is in the liquor business. Those differences aside, nothing seems to confuse people as much as the kicker.
It’s easy to rush to judgement on the kicker because the dominant political class characterizes it as an absurd giveaway—something we cannot afford when the demands of state government are so great.
As a third-generation Oregonian who just watched the State Legislature’s biennial effort to revoke this odd but necessary budget mechanism, I want to make the case for why the kicker remains so important.
Oregon is the most income-tax dependent state in the nation. As a result, the money available to dedicate to schools, roads, and other services fluctuates from year-to-year. The Legislature has an office that tracks and projects what the likely revenue will be so that when they establish their budget, they don’t plan to spend more than we collect. But when the actual revenue beats this forecast by two percent, the kicker is triggered to return a portion back to taxpayers.
Why would voters in 1980 dream up such a strange device? It really is simple. Prior to 1980, the Oregon Legislature’s appetite for spending surplus revenue created programs and services that needed to be maintained in future years – years that ended up being quite financially lean.
In 1981, Oregon’s struggling timber industry dragged down the entire economy, forcing state spending to drop below the previous biennium for the first time in living memory. Republican Governor Vic Atiyeh led a Democratic Legislature through the most painful cuts the state had ever seen.
The budget was around $9 billion that year. Today, it’s $85 billion. The increases of the last 40 years have been aggressively steady, even with the kicker in place.
The kicker isn’t a tax break for the rich – which is a broken record we hear many elected Democrats spin every time it’s mentioned. The kicker is a mechanism to curb out-of-control spending by a small amount. Over time, it matters that we have stopped the state from expanding its budget beyond our means. If our state budget has grown by nearly tenfold with the kicker, imagine the growth if the kicker had been sidelined.
The bottom line is that the kicker exists because Oregonians don’t trust politicians to be practical with their tax dollars. I think most would continue to agree with that sentiment.
When you hear outraged politicians mischaracterize the kicker as a tax rebate for the wealthy, please remember the history of why it was created and how it’s helped control a bit of the massive expansion of state spending over the last 40 years. And at a time when the cost of living in Oregon is skyrocketing, giving Oregonians some of their tax money back makes good policy sense.
Stan Pulliam is the two-term, nonpartisan Mayor of Sandy. He is running for governor in the 2022 election. Learn more at www.stanpulliam.org.
Related Reading:
Reagan Knopp in the Oregon Way.