SALEM — State economists say if their revenue estimates hold, Oregon taxpayers will get a $686 million “kicker” rebate in 2020.
On Wednesday, state economists released their latest revenue forecast, which showed Oregon General and Lottery Fund resources in the current two-year budget to be about $20.44 billion, $166.8 million higher than projected several months ago.
“Oregon’s economic expansion has largely played out as expected in recent months, yet state revenue collections continue to outpace the forecast,” state economists wrote in their quarterly revenue forecast Wednesday. “Much of the strong revenue growth can be traced to temporary factors, including the response of Oregonians to federal tax law changes and a spike in estate tax collections.”
While state economists expect to the state collect more revenues than previously expected in the current biennium, which concludes in mid-2019, they now expect to see less revenue in the 2019-21 budget period.
Oregon taxpayers receive the “kicker” when actual revenues in the two-year budget cycle are 2 percent above the original budget.
Economists now predict taxpayers will receive about $686 million in 2020. The median taxpayer, earning between $35,000 to $36,000, can expect to get about $164 “kicked” back. Higher income earners can generally expect larger kicker rebates.
State economists also predict a corporate tax kicker of about $207.8 million, which will be dedicated to K-12 education in the next biennium.
Generally, Oregon’s economy continues to do well. While wage growth and household income is still growing, the rate of growth has slowed over the past few years. Much of Oregon’s General Fund revenue comes from income taxes.
However, state economists identified some downside risks that could pose a threat to the state’s economy in the medium- and long-term, including, but not limited to, “worrisome trends at the U.S. level,” housing affordability, climate and natural disasters and federal fiscal policy.