This week, the Oregon Office of Economic Analysis released the latest quarterly economic and revenue forecast. The news is good. Employment is up and wages are up. The current expansion is now the longest on record. Money flowing into the state's general and lottery funds came in $2.6 billion above what officials expected in 2017. That created a situation where Oregon reserve funds are at an all-time high — at more than $3.7 billion — even as economists warn of a possible economic slowdown on the horizon.
Oregon's unique refund policy also means the state can't use all of the unexpected money. Under state law, a "kicker" is triggered whenever actual personal income tax receipts come in at least 2% higher than initial projections. In such cases, any money collected above initial forecasts flows back to taxpayers in the form of tax credits.
Oregon taxpayers will see the largest-ever state income tax rebate next year. The top 1% of taxpayers can expect credits of $15,214, while the median rebate will be $346. The average payout to all taxpayers is expected to be $739. Legislation was proposed this year to limit kicker rebates to $1000 and send the excess to the PERS fund. That measure failed to advance. A total of more than $1.57 billion is expected to flow back to personal income taxpayers after they file their 2019 returns.
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