A Merrier Christmas in Oregon

December 25, 2007

I hope Santa Claus brought you exactly what you wanted this morning. Oregon residents might have us beat, though, in that the state refunded part of their income tax payments just before the holiday:

Checks have arrived in mailboxes all over the state, thanks to an only-in-Oregon law that requires rebates to taxpayers when income tax collections top projections by more than 2 percent.

All told, the state has doled out $1.1 billion in rebates.[…]

“It is pretty well spent,” said Portland resident Linda Stockton, who got a check for about $600. “And I bought $100 worth of canned goods, and gave it to the food bank. I bought about 20 pairs of mittens for foster kids.”

The rest, she said, was spent on “clothes for me.”[…]

“I don’t trust (government) to spend our money wisely,” said Paul Hansen of Portland, whose family got a check for $1,161. “The private sector is smart enough to spend the money more wisely and more efficiently.”

Hansen said about 20 percent of his check will go to charity, and the rest is earmarked for his daughter’s private school tuition.

Charities could be particular beneficiaries of the kicker, since many families are accustomed to making their donations at Christmas time. Greg Chaille, president of the Oregon Community Foundation, which tracks charitable giving in the state, said the rebate checks could increase donations by $100 million or so this year.

Oregon’s tax refund rebate system has been around since 1979, and is similar to Alaska’s Permanent Fund dividends and Colorado’s TABOR refunds (which was suspended in 2005):

The Oregon rebate, known locally as the “kicker,” also is written into the state constitution.

In the national consciousness, Oregon is firmly classified as a liberal state, whose residents were among the first in the nation to approve medical marijuana, and support strict environmental policies.

But when it comes to taxes, the state’s residents are decidedly libertarian. Voters have shot down just about every proposal for a new tax in the last decade, from sales to gas to cigarettes.

That predisposition has made the “kicker” an untouchable sacred cow, especially because its backers timed the rebate to appear in mailboxes at Christmas, when bills are pilling up.

The refunds have their opponents, of course, in this case interestingly from the same person who sent her overcollected income taxes to charity and clothes for herself::

“As a former teacher, I don’t get why the money isn’t just reallocated to an area that has a tremendous need,” Stockton said. “There are cheerleaders out in front of the supermarket begging for money to keep their sports program alive.”

Oregon residents have that option, too. According to the AP, 12,000 residents sent $6.7 million in rebate checks to the state schools fund. It’s a choice left to each taxpayer to decide the best use of their refund check.

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