Personal Taxes

The personal tax kicker in Oregon is forecast at 571 million US {dollars} regardless of the recession

Oregon taxpayers are expected to receive $ 571 million for a personal tax kicker after state revenues surpass economists’ projections despite the coronavirus pandemic-sparked recession.

The state’s unique kicker rebate takes effect when actual income tax receipts are 2% above original projections by the end of a two-year fiscal cycle.

Legislators are also expected to have $ 800 million more to spend this legislature as they draw up the budget for the next biennium, state economists told a House committee on Wednesday.

Personal income – and thus also the state’s source of income – developed much better during the recession than experts originally feared. They largely attribute this to state aid in the form of direct payments, loans and increased unemployment insurance.

“Overall, Oregon income has not come down. It has increased and it has risen sharply,” said state economist Mark McMullen.

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McMullen said the state was in a strong position to recover from the sudden recession caused by nationwide shutdowns to preserve public health during the emergence of COVID-19 last March.

Revenues for the biennium 2019-2021 and 2021-2023 are likely to remain largely unchanged – not good news for those hoping for a hike in government spending, but far better than last year’s $ 2 billion hole economists forecast.

Economists also predict the state will return to pre-recession employment levels by early 2023, six to nineMonths faster than previously projected.

They also expect pent-up demand to boost Oregon’s economy after public health restrictions are lifted.

However, McMullen warned that the biggest factor that could affect the economic outlook is still COVID-19. If infection rates rise, or a worse variant occurs, or vaccinations stall, recovery may be slower. The projection also assumes that schools will resume face-to-face teaching in the fall.

“It is important to move cautiously as the road ahead remains unpredictable,” said Governor Kate Brown in a statement. “We also know that many Oregonians are still struggling with job losses, underemployment and survival.”

Your projection also assumes that a massive aid package will be passed that is still on its way through Congress. The increased unemployment benefits included in the plan and the $ 1,400 direct payments will be instrumental in predicting personal income growth this year.

Republicans said the positive economic and revenue outlook should give lawmakers a break before considering additional taxes this term.

“The state was saved by the federal government,” said Republican Senate Chairman Fred Girod, R-Stayton The Oregonians are back to work. “

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Democrats, meanwhile, said the pandemic and recession only exposed and exacerbated the existing inequalities that need to be addressed at this session.

“This crisis calls for bolder action in housing, forest fire recovery and financial assistance to the hardest hit households,” said House spokeswoman Tina Kotek, D-Portland. “I look forward to working with my colleagues to reinvest some available dollars.” in the coming weeks to help the Oregonians who need us to help them. “

State economist Josh Lehner said that while incomes are strong and savings have increased significantly over the past year, accumulation occurs only in middle- and higher-income households.

Lawmakers on both sides of the aisle noted that there was a difference between the strong position that the state’s revenues were in despite the pandemic and the pain felt by thousands of Oregonians who were still unemployed.

People on lower incomes continue to face problems as they faced inconsistent federal aid and poorer employment prospects over the past year.

The number of people who have been out of the job for more than six months is increasing, according to the Oregon Employment Department. And although the number of unemployed has fallen dramatically in less than six months, it appears to be decreasing.

The Portland metropolitan area has the worst sustained unemployment, as employment has only rebounded 3 percentage points from pre-recession levels since the recession began.

In comparison, rural areas have regained more than half of their employment.

Reporter Connor Radnovich covers Oregon legislation and the state government. Contact him at or 503-399-6864 or follow him on Twitter at @CDRadnovich.

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