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Report: Oregon Not Putting Enough Away for a Rainy Day

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October 31, 2007

Silverton, OR – Oregon lawmakers may not be doing enough to protect the state from future economic downturns. A new analysis from the Oregon Center for Public Policy shows the state's first all-purpose "rainy day fund" is an important step, but state reserve amounts are too small to avoid future budget cuts in a recession like the one Oregon saw in 2001. It also comes at the same time the state is preparing to send out kicker tax rebates. Report author Michael Leachman says that's shortsighted.

"When the next recession comes around, Oregonians are going to be kicking themselves for not saving the kicker."

Leachman says while some taxpayers like to get the money back, the kicker will cost both the state and taxpayers in other ways. Individual Oregonians can count on giving about 20 percent of their kickers to the federal government as income taxes. The state will fork over $1 million just to print the checks, and another $45 million in interest payments to cover the cost of the kicker.

Leachman believes the state needs to save more -- and the kickers, both personal and corporate, are an obvious source of revenue.

"It's more money than we expected to have a couple years ago. We ought to be setting it aside for the inevitable recession that's going to come, and we're not doing that. We don't have enough in our reserves."

To view the full OCPP report, visit www.ocpp.org.

Dondrea Warner/Chris Thomas, Public News Service - OR