PERSPECTIVE FROM THE 19^TH HOLE:  This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus to use an image from my favorite sport, golf.  Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as press secretary in Washington, D.C. for a Democrat Congressman from Oregon (Les AuCoin), as an Oregon state government manager in Salem and Portland, as press secretary for Oregon’s last Republican governor (Vic Atiyeh), and as a private sector lobbyist.  This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.  I could have called this blog “Middle Ground,” for that is what I long for in both politics and golf.  The middle ground is often where the best public policy decisions lie.  And it is where you want to be on a golf course.

It used to be that, when a new quarterly state government revenue forecast was in the offing, the State Capitol would be filled with interested observers to hear the results.

As a state lobbyist, I was one of them on many occasions.

Earlier this week, a new revenue forecast was unveiled and it appeared to gain only scant attention from the media or the public.  And, of course in retirement, I was not there, though I did recent a few of the media stories.

One reason for the lack of attention was the pandemic, which has made the Legislature a “virtual one” and has prompted various public policy issues – like a revenue forecast — to recede into the background.

Another reason for the murky status is that state budget officials are waiting to see if President Joe Biden and Congress will produce another virus relief bill, which is likely to include at some additional state revenue.

Therefore, what has lost in the shuffle over the last few days is an issue that has been the source of aggressive political pushing and pulling over the years.  It’s called “the kicker.”

This law is controversial, especially to many Democrats who want more money for state programs.

The “kicker” law has been in place since 1979 when it was passed by the Oregon Legislature.

This limitation is applied separately to corporate income tax revenue, the sum of personal income tax revenue, and all other General Fund revenue.   Specifically, if revenues from the corporate income tax exceed their forecast by more than 2 per cent, then all revenue in excess of the forecast is refunded to corporations.  

Similarly, if revenues from all other General Fund sources exceed their forecast, the total excess is refunded to individual taxpayers.

The rationale – back in 1979 and even today — is that the money, though perhaps in state government coffers, still “belongs to taxpayers,” the people or corporations that paid taxes.  So, it should be returned to those payers..

Advocates for larger government do have points in their favor.  Rather than sending money back to payers, they want to invest it in such programs as education, health care and public safety, all of which have strong advocates.

The Oregon newspaper reported this additional information earlier this week:

“Oregon taxpayers are on track to get a ‘kicker’ tax rebate worth a combined $570.5 million next year, state economists told lawmakers in the latest quarterly forecast on Wednesday.

“That is the upshot of aggregate incomes in the state exceeding economists’ expectations well before the pandemic, as lawmakers assembled the current state budget.

“State economist Mark McMullen told lawmakers ‘this massive helicopter drop of a massive amount of federal aid’ also played a key role in raising incomes, through stimulus payments to individuals and enhanced unemployment benefits.  Absent that federal aid, Oregonians’ aggregate income would essentially be flat.

 “We haven’t seen this in decades, this level of income support coming from the federal government.”

If the kicker “kicks,” taxpayers would receive the personal income tax rebate as a credit on their 2021 taxes when they file next year.

The Oregonian coverage emphasized the traditional mixed response among state officials.

Governor Kate Brown, for her part, urged caution on the state spending until lawmakers know how much money Oregon will receive from a likely third federal virus relief package.  Plus, another quarterly revenue forecast is due in May, so there will be one more estimated on tax revenue before policymakers in Salem have to approve the 2021-23 state budget.

House Speaker Tina Kotek, D-Portland, said the Legislature should increase spending to help Oregonians still experiencing “economic pain on the ground” from COVID-related job losses and the historic 2020 wildfires.

House Republican Leader Christine Drazan, R-Canby, advocated a different point.  She said lawmakers should take a fiscally conservative approach to the budget and avoid increasing taxes on businesses.

“Given the state’s fragile economy, we must exercise fiscal discipline, not increase taxes or grow government programs and bureaucracy,” Drazan said. “We must focus our attention on getting the 150,000 Oregonians who have lost their jobs back to work and struggling small businesses back on their feet.”

So, as huge public policy issues confront state government – the virus, wildfire relief, health care policy, forest management practices and others – lawmakers also will face a typical battle over the kicker.

I understand both sides of the debate and, in fact, lobbied over my years in the business for increased spending on health care, education, maritime policy and technology, as well as restraint on overall state spending.

On the latter point, the kicker law is one protection against continued growth in state spending.

For me, the good news now is that I can watch the debate this time around from the cheap seats in Salem.

And, if I was to be involve ed in the debate, I would try to find middle ground, as I often like to do.  I would suggest that policymakers reach this agreement:  Direct the kicker money to reserve funds where it can grow so the state is able to turn to the reserves to cushion the blow the next time a recession looms.

Is this idea original with me?  No.  But, it is a good idea that represents solid middle ground.