In tax year 2013, the latest year available, 62,920 Clark County residents paid $156.1 million in Oregon state income taxes, according to the Oregon Department of Revenue.
SALEM, Ore. — Oregon will send $402 million back to taxpayers next year after the state collected more than expected in personal-income taxes over the last two years, state economists said Wednesday.
The estimated median rebate under Oregon’s “kicker” law will be $124, though the value varies significantly based on income.
Oregon’s kicker law was created in 1979 as a check on government growth. It’s triggered when the state collects at least 2 percent more than anticipated during a two-year budget cycle. When that happens, the additional money is kicked back to taxpayers.
Tax increases from 2013 and the economic recovery helped Oregon generate about 3 percent more than anticipated in personal income taxes during the 2013-2015 budget period.
In the past, kicker rebates have arrived as a check shortly before the holidays, making them a beloved feature of state tax laws. Because of a change made in 2011, however, the money will now come as a credit when Oregonians file their taxes next year. The kicker money will increase the size of a refund or decrease the final tax bill.
Taxpayers will get a kicker credit worth 6.3 percent of their 2014 state tax bill, said Josh Lehner, a senior economist with the Office of Economic Analysis.
People with no tax liability that year are not eligible for a kicker. To claim the credit, individuals will need to file a 2015 tax return by April 15 next year, even if they have no income in Oregon that year.
The value of an individual’s kicker is based on their 2014 state tax bill. The top 1 percent of taxpayers — who earn at least $336,000 a year — will get an estimated $4,614 and the bottom 20 percent will get $10, according to economists.
Oregonians last received kicker rebates in 2007, when $1.1 billion was returned to taxpayers. This will be the ninth time the kicker has been triggered since the law was enacted in 1979.
As a percentage of individuals’ tax liability, this year’s kicker will be among the smallest. The 2007 rebate was worth three times as much, 18.6 percent.
“This one won’t feel as bad in terms of the budgetary impact, nor will it feel as good for the folks getting the money back,” said Mark McMullen, the state’s chief economist.
Supporters of the kicker law say unexpected money belongs with taxpayers.
“When the economy does well, Oregonians should reap the benefits, not state government,” said Rep. Mike McLane, the top Republican in the House.
Critics say it prevents the state from saving during good times to avoid budget cuts during lean times, contributing to a volatile state budget.
Kicker critics have talked for years about eliminating it and using the money to feed a rainy-day fund, but they’ve struggled to find support. Because the kicker is part of the state constitution, any changes must be approved by voters.
If lawmakers were to design a tax policy from a blank slate, “we would not end up with the tax code that we have now,” said Sen. Mark Hass, a Beaverton Democrat who’s long advocated an overhaul.
