Oregon families should get average of $284 in tax rebates next year thanks to strong economy

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SALEM, Oregon — Oregon families should get an average of $284 in tax rebates next year, state economists said Thursday, citing a strong economy and a bump in job growth.

Economists say the rebates will totally nearly $473 million, or $123 million more than was predicted in February, when economists said taxpayers would receive nearly $350 million in tax rebates.

The steady economic improvements have led the state to collect slightly more than projected in both corporate and personal income taxes.

Unlike previous rebates, which used to be distributed as a check in the mail around Christmas, Oregonians will instead receive a tax credit and pay less when they file their returns in April 2016, said Josh Lehner, senior economist at the Oregon Office of Economic Analysis

"It's a credit on the tax return so you don't get the check in the mail, you just get lower taxes to pay in April," he said.

Oregon's one-of-a-kind "kicker" law is triggered when tax collections exceed projections by at least 2 percent. When that occurs, the unanticipated revenue gets kicked back to taxpayers as income tax credits. The last time Oregonians got a kicker was in 2007, when they got back a total of more than $1 billion after a booming economy brought in revenue more than 19 percent higher than expected.

Once the tax rebates are out, state economists said lawmakers will have an additional $463 million in resources to spend.

The report of a strengthening economy drew optimism from lawmakers who have said they'd invest some of that money in public education.

Gov. Kate Brown said in a statement the robust economic growth translates into an extra $100 million for public schools. Senate Majority Leader Diane Rosenbaum said that means about 40 percent of the increased revenues will be dedicated to the K-12 budget.

House Republican Leader Mike McLane, of Powell Butte, said while the revenue forecast was a sign the state's economy was on the upswing, Democrats in the Legislature have been underfunding schools despite the additional revenue. In March, Democrats and Republicans butted heads over the education budget, with Republicans saying the state had plenty of money but that Democrats weren't making education a high enough priority.

"The Legislature doesn't have a revenue problem, it has a leadership and priorities problem," McLane said. "Oregon taxpayers know how to spend their money better than we do," he added.

Despite the rosy outlook, news of the tax rebate drew chants and protests from students sitting in the committee hearing who wanted the money to be siphoned back into higher education. Shouting "the kicker has got to go," a handful of protesters were escorted from the room, but kept up their chants outside the doors while economists continued with their report.

A spokesman for the Oregon State Police said they arrested 10 people and charged them with interfering with legislative operations.

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