Didn't Oregon just return $1 billion to the taxpayers via the kicker?

SALEM - Alarmed by the deepening recession, state leaders are warning that agencies may need to list possible spending cuts of as much as 20 percent for the two years beginning in mid-2009.

What officials can say at this point is that the state's tax revenues are forecast to fall $500 million or more short of what's needed to continue the current level of services. That's about 3 percent of $17 billion in projected spending of state taxes and lottery money.

But those estimates were made before the last month of bad news in banking, housing, employment and the stock market. In other words, the revenue news is only expected to get worse.

The projections also don't include any of the Nov. 4 ballot measures, which could cost as much as $2 billion if they are approved by voters.

http://www.oregonlive.com/news/index.ssf/2008/10/oregon_officials_are_talking_b. html

I think the last legislature started a rainy day fund although it was small at the outset so probably not nearly enough to help out with this.

Then again, we seem to be in better shape than California...

Andrew

Vitalogy- This is exactly what I thought when I picked up the paper today. What the hell are we doing here? It's a constant ping-pong of too much $$, not enough $$, etc.

Yet people still shriek when you suggest that maybe the state should just keep the surplus. They want thier "kicker". Another example of short-sighted stupidity.

If Oregon can't ditch the income tax and go for a sales tax like our neighbors up north do, then maybe Oregon should consider an "anti-kicker", where when the state is low on money, they charge us all an extra amount. This is only fair, as when the state has too much money, they return it to us. Oregon taxpayers want the kicker when times are good but aren't willing to pay up when times are bad. That's called wanting your cake and eating it too.

Vitalogy: If Oregon can't ditch the income tax and go for a sales tax like our neighbors up north do, then maybe Oregon should consider an "anti-kicker", where when the state is low on money, they charge us all an extra amount.

Bad idea. When state tax revenues are low, that means the economy is weak. Insisting people pay an extra tax when they are already struggling will only make it harder for the economy to rebound.

I like the "rainy day" fund better (where at least some of a kicker refund is saved by the state). Too bad we haven't gotten a better jump on such a fund. I think the current "rainy day" fund only keeps corporate kicker refunds, not personal income tax refunds.

Andrew

The State must estimate the tax revenues and prepare a balanced budget. Regardless of the kicker, if the actual revenues (taxes out of our paychecks)falls short of the projected revenues then cuts must be made. The legislators in Salem prepare a budget using ALL of the anticipated revenues. If the "Surplus" was kept (elimination of the kicker) the situation would be worse because the amount of the kicker would be built in or added to the budget. Have the State Legislature or US Congress EVER spent less than what was coming in?

Andrew, I was joking on the reverse kicker idea. I bring it up to show the ridiculousness of the logic that says in good times we get money back, but in bad times we expect cuts. A business would never operate that way and neither should the government.

If a rainy day account was established it certainly would HELP the situation, not hurt it, if implemented properly. The budget would still have to be estimated so to not rely on the rainy day fund. Meanwhile, interest can be earned on that money while it's sitting there and before you know it, our taxes could go down because we'd have a pot of money earing income that could help go towards that budget. It would also eliminate major cuts or major tax increases to keep up with the wild swings in the economy.

Just imagine if the $1 billion tax kicker was invested in Treasuries earging a yeild of 4%. That would be $40,000,000 to go towards the budget without touching the rainy day account.

Or the stock market.

Nah, the stock market would be too risky. Treasuries are guaranteed return should we need the money within a few years...