PROJECTED OREGON KICKER PAYOUT

When tax season arrives next spring, Oregonians can look forward to receiving bigger income tax refunds from the state government than they might have expected. Oregon’s state economists are predicting a whopping $5.6 billion in tax refunds for the 2023 tax year, which under the “kicker” law are divvied out to individual taxpayers (and businesses) when tax revenues far exceed official projections.

These refunds depend on a person’s income and will vary widely. On average, each taxpayer might expect around $980 as a tax refund. For those at the lower end of the income scale, such like college students and minimum wage workers, the average refund will be a more modest $60, however.

In contrast, the top 1% of income earners in Oregon will receive a substantial $44,600 per taxpayer, tax officials estimate.

The main reason for this large tax refund is unexpected high consumer spending and wage growth since the COVID-19 pandemic hit. With an increase in the state minimum wage and more companies raising salaries, Oregon has collected much more in income taxes than originally anticipated during the current two-year budget cycle. This has led to a surplus of cash for the state government.

While these estimates offer an idea for what taxpayers can expect in the spring of 2024, the exact total amount is to be confirmed by state economists this October.

The Oregon kicker has been around since 1980, when lawmakers decided to offer these refunds (resulting from surplus collections) to both individual and corporate taxpayers. Although many Oregon residents are excited about them, there continues to be debate about how the excess money should be distributed.

Because it is proportional and based on income, higher earners receive much higher refunds, while some observers argue the money should be distributed more equitably among all taxpayers. Adding to uncertainty over the kicker’s future is lawmakers’ option to use the surplus cash for other projects. Often, elected Democrats want to use the extra funds to support underfunded parts of the budget – perhaps social services and infrastructure – while state Republicans usually oppose this idea.