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Economic Analyst: OR Tax 'Kicker' Will Kick Underfunded Schools

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Oregon has, on average, the third largest class sizes in the nation. (Oregon Department of Transportation/Flickr)
Oregon has, on average, the third largest class sizes in the nation. (Oregon Department of Transportation/Flickr)
August 24, 2017

SALEM, Ore. – Oregon state economists have announced the "kicker" tax rebate will go into effect next year, but economic analysts worry it is punting concerns over schools' financial woes down the road.

Many Oregonians see a reason to celebrate the $464 million rebate, which will send money their way in next year's tax returns.

But Juan Carlos Ordoñez, communications director of the Oregon Center for Public Policy, says the majority of refund money will go to the wealthiest Oregonians, while the average resident will receive about $89. Meanwhile, public schools will find themselves in a deeper hole.

"We're in a situation where schools continue in this long-term, chronic underfunding, and yet here we have a situation where the state is going to be creating an automatic tax cut worth $464 million, and that's money that would have been definitely better spent investing in our schools," he explains.

The kicker is triggered when state revenue is two-percent or higher than state economists' predictions two years earlier. Ordoñez says it would have been more prudent to set the money aside in Oregon's rainy day fund, which would be useful in the event of a future economic downturn.

State lawmakers had a chance to suspend the kicker during this year's session but did not.

To understand the scale of the kicker, the Oregon Center for Public Policy found the state could have added more than 2,600 teachers to its ranks.

The state is sorely in need. It has the third largest class sizes on average in the nation. But Ordoñez says these issues aren't considered when calculating the kicker.

"It has nothing to do with what Oregonians need or want from their public services, to the quality of services that they want, of how big our class sizes are in our schools, of things like that," he adds. "It's divorced from that reality."

Even before the kicker was initiated, schools and educators were looking for other ways to keep schools afloat. The Oregon Education Association is backing a 2018 ballot initiative to increase corporate taxes in order to fund schools and another initiative that would make it easier for legislators to do this.

Eric Tegethoff, Public News Service - OR