PORTLAND, Ore. — Just in time for Christmas, Oregon taxpayers have gotten some extra spending money from an unlikely Santa Claus: their state government.
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.
Most people got about $600, but checks sent to the wealthiest residents, including Nike co-founder Phil Knight, averaged nearly $800,000.
“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.”
After struggling through a bitter recession in the early part of the decade, Oregon’s economy roared back, starting in 2005 and outpacing most of the rest of the country. The boom was fueled by a run on real estate, and growth in the state’s “Silicon Forest” technology sector.
The rampant growth pushed state income tax collections about 20 percent beyond the most optimistic predictions from budget officials and set the stage for this month’s rebate, easily the largest since voters approved the refund system in 1979.
The last time the state was flush enough to hand out a December rebate it was 2001. That year’s checks only totaled $250 million; before this year, the largest refund was $432 million in 1997.
The closest parallels to Oregon’s system are in Alaska, which distributes dividends from oil and gas revenues to residents, and in Colorado, where a constitutional amendment, the Taxpayer’s Bill of Rights, or TABOR, caps state spending and provides that excess revenue be returned to taxpayers. However, Colorado voters in 2005 suspended the rebate section for five years.
The Oregon rebate, known locally as the “kicker,” also is written into the state constitution.
Still, the rebate is not without controversy, particularly since memories are still fresh of the 2003-04 recession, when schools around the state shut down in early May because there wasn’t enough money to keep them open.
Most of the Democrats who control state government are openly dismissive of the system and say that they’d prefer to see the money saved for the proverbial rainy day.
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