SALEM, Oregon (AP) – Oregon could pay out a massive $ 1.9 billion tax refund next year due to rising income tax revenues.
Oregon Public Broadcasting reports that if the projections are correct, the refund – which comes in the form of credits for 2021 tax returns filed next year – would be Oregon’s biggest kicker of all time. The state’s unique kicker tax law sends money back to taxpayers when income tax receipts are at least 2% above original projections over a two-year budget cycle.
The new projection was presented to a joint meeting of senators and state officials on Wednesday. In May, economic forecasters had expected the state to see a $ 1.4 billion kicker.
Under the expected kicker, the median income taxpayer would get a $ 420 credit on this year’s state taxes. The average taxpayer with an adjusted gross income of about $ 67,500 would receive $ 850. Since the kicker is awarded as a percentage of income taxes paid, the top 20% of earners get far more: between $ 1,600 and $ 16,880.
The state last hit a record kicker amount in 2019 when the refund was last triggered when more than $ 1.5 billion was returned to taxpayers.
Regardless of the personal kicker, economists also expect the state to receive $ 847 million more in corporate taxes than originally expected. This “corporate kicker” will flow to K-12 schools.
“We have more money to invest in pandemic relief, childcare and housing,” Senate President Peter Courtney, D-Salem, said in a statement. “We are still in a crisis”
House spokeswoman Tina Kotek, D-Portland, called the forecast “welcome messages” that could help lawmakers remain focused on managing multiple crises.
Republican leaders meanwhile issued cautionary statements.
“Despite a budget that has doubled in 10 years, the state today is worse off about our students’ education, property prices and the security of our communities,” said Christine Drazan, Chair of the House Minority Chair, R-Canby. “While it’s great for the state that we have an increase in tax revenue, it’s not real progress for the Oregonians.”