State corporate kicker possible
True or false: Oregon’s tax system is designed so corporations can get $42 million in tax rebates because their profits were surprisingly large — even as the state faces a $3 billion deficit?
Answer: It’s true. And it’s a scenario that will play out next year if the latest state revenue forecast holds.
The forecast calls for companies to get some of their taxes back through Oregon’s one-of-a-kind kicker program. That was nearly lost last week in the forecast’s bigger news: that state revenue is off by an additional $378 million for the current budget cycle and $3 billion for the next biennium.
In State Economist Tom Potiowsky’s latest quarterly forecast, issued last Thursday, personal income tax revenue will fall $1.2 billion short of the forecast used by the 2009 Legislature to craft the 2009-11 budget. The latest forecast also shows corporate income taxes on track to reach $874 million instead of the $832 million projected at the end of last year’s legislative session.
With 10 months remaining in the current budget cycle, it is far from guaranteed that this latest forecast of a corporate kicker will turn out to be accurate. Even so, Legislative Revenue Officer Paul Warner said he expects the projection to hold up.
“I think it’s more than likely that there will be a kicker,” said Warner, who previously was the state economist. “I think that’s the way the pattern plays out.”
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Posted on Sept. 01, 2010
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