Yesterday morning, State Economist Mark McMullen delivered the newest Oregon revenue forecast. This is the latest – and last – report before Oregon legislators must make final budget decisions. As it turns out, the forecast was a mixed message.
The state is now expecting more tax dollars than originally anticipated. This is good news for the state – legislators can use this money to limit cuts to senior services and help alleviate overcrowded classrooms.
But much of this increased revenue comes from corporate profit gains, and McMullen warned legislators that things are so good for corporations that the corporate kicker tax refund is likely to kick, as corporate earnings surged beyond our economists’ predictions.
“Everywhere I go around the state, business owners are talking about their renewed optimism,” McMullen said. And why shouldn’t they? Corporate profits are at an all-time high.
But these gains appear to have bypassed most middle-class families, whose earnings are down from the last forecast.
Legislators will now decide how to move forward. The increased revenue should help fund our schools, senior care, and other critical state services. But that revenue could be seriously diminished if the corporate kicker tax break kicks — and if Oregon’s business taxes remain the lowest in the nation.
Just last November, Oregonians expressed that they were sick of giving away tax breaks to corporations instead of funding our schools and overwhelmingly voted voted YES on Measure 85, which sends any future corporate kicker tax break funds back into K-12 schools.
If the corporate kicker “kicks” this year, legislators should uphold the will of the voters and make sure that money goes to K-12 schools now.
Email your legislators and tell them to put the corporate kicker into K-12 schools and close tax loopholes for the biggest, most profitable corporations – so they can put that money where it matters most.
NERD ALERT: How much more revenue? It’s complicated. The state is now expecting a total of $272 million in additional revenue. But that figure is split across two biennia — our current budget cycle (2011-13) and our upcoming budget cycle (2013-2015.)
We spoke directly to State Economist Mark McMullen to make sure we got it right, and here’s what he told us:
$115 million of that amount is currently attributed to the 2011-13 cycle; $157 million to our future cycle. However, while it is unlikely legislators will spend the $115 million before the cycle ends, they might spend some part of it. That means we’re looking at anywhere between $157 – $272 million in additional revenue for the next cycle, depending on how and where the $115 million is allocated this cycle.