Corporate Kicker Initiative Could Be Low-Key Fight

Jul 17, 2012

This fall, Oregon voters will debate the future of one of the state’s most unusual tax policies. Oregon elections officials will soon announce whether an initiative to repeal the state's one-of-a-kind corporate kicker rebate has made the ballot. Backers submitted well over the number of signatures needed. But unlike one recent corporate tax measure, this initiative isn't generating much opposition yet.

In early 2010, Oregon's airwaves were full of doom and gloom messages about a proposed tax hike on corporations. This ad depicted workers getting laid off as a result of Measure 67.

Ad: "The state raised business taxes over 40 percent instead of tightening their belt like the rest of us. Now, we're out of work. Thanks a lot, Salem."

The measure did pass. Few layoffs were ever pinned directly on the tax hike. But the bruising showdown created a rift between the business community and labor groups. It’s only recently showed signs of healing.

Now, there’s another corporate tax measure headed for the ballot. But this one isn’t sparking another all-out fight. The initiative would repeal the corporate side of Oregon’s kicker rebate law. Those are refunds that happen when the state tax collections exceed revenue projections by more than 2 percent. Business groups themselves have wanted to reform that policy. So Scott Moore of the union-funded group Our Oregon doesn’t expect those groups to campaign against this measure.

Moore: “This has been a priority of those organizations for many, many years. And so I think for them to come out publicly opposed to corporate kicker reform just simply wouldn’t square.”

But the union-backed measure isn’t exactly what the business community had in mind. The Oregon Business Association’s Ryan Deckert says he does support modifying or even repealing the corporate kicker rebate. But he says the current proposal is flawed because he thinks the excess money should go into a reserve fund instead of being spent immediately on schools. But does Deckert think that’s enough of a concern to generate widespread opposition?

Deckert: "Yeah, I mean we’ll see what happens in the fall. You can tell the shrug of the shoulders when we saw this one.”

Neither the Oregon Business Association nor the state's other major corporate lobbying group, Associated Oregon Industries, has taken a position on the initiative. In general, businesses don't rely on corporate kicker money because it's so unpredictable. The last time the state distributed a corporate kicker was in 2005, and there are none anticipated in the near future. In fact, there's been just over $500 million  of corporate kicker money distributed in the past 15 years. That's a relative drop in the bucket in terms of total state spending during that time. But:

Chuck Sheketoff: "In any one year, it can be a significant amount."

That's long-time kicker critic Chuck Sheketoff of the left-leaning Oregon Center for Public Policy. He says in any given budget cycle, the corporate kicker could generate enough money to save a struggling program or two. But Sheketoff says more significantly, the ballot measure could serve as a sort of appetizer for a bigger target.

Sheketoff: "I think it opens the door for people to realize boy, you get rid of a kicker and the world doesn't end, and the world actually may be even better. Let's now go after the personal kicker which is equally stupid and usually accounts for more money."

But Oregon’s personal income tax kicker is of course much more personal to individual taxpayers. So a debate over eliminating that would likely be much more intense.

Copyright 2012 Northwest News Network

On the Web:

Initiative Petition 35:

Oregon Kicker History: