Bend, OR – Oregon’s unique surplus refund system, known as the “kicker,” is once again under scrutiny as state lawmakers explore proposals that could dramatically alter or eliminate the mechanism. Established in 1979 and approved by voters the following year, the kicker returns excess revenue to Oregonians when the state collects more than 2% above its forecasted income.
The debate over the kicker’s future has intensified as the state faces growing challenges, particularly in addressing housing and homelessness crises, as well as improving student outcomes. Supporters of reform argue that redirecting surplus funds could better support these critical areas, while opponents remain steadfast in protecting the refund, calling it a vital benefit for taxpayers.
Proposals for Change
Several proposals have emerged this legislative session, each seeking to modify or do away with the kicker in different ways.
Senate Bill 399, sponsored by Sen. Fred Girod (R-Stayton), aims to reinstate the refund checks that were used before 2011. This bill would require the Department of Revenue to issue kicker refunds as checks instead of the current tax credits. Girod’s proposal echoes a similar bill from 2023, which stalled in the Senate Committee on Finance and Revenue after a failed attempt to push it to the floor. The bill is currently under review in the same committee but has not yet been scheduled for a hearing.
In contrast, Senate Bill 573, introduced by Sen. Lew Frederick (D-Portland), seeks to eliminate the personal kicker entirely. The bill proposes ending the refund starting in 2027, though it would only take effect if voters approve the change in the November 2026 election. Frederick argues that the kicker, while unique to Oregon, represents a drain on state resources, as surplus funds are returned to taxpayers instead of being allocated to vital public services. A similar proposal from 2023 met strong opposition and ultimately died in committee.
Meanwhile, House Bill 3360 focuses on redirecting the corporate kicker, rather than the personal refund. Sponsored by a bipartisan group of legislators, including Rep. Courtney Neron (D-Wilsonville) and Rep. Zach Hudson (D-Troutdale), the bill would direct corporate kicker funds to the School Facility Improvement Fund. This would provide much-needed support for school infrastructure projects, such as repairing aging buildings and upgrading essential systems like HVAC. Currently, corporate kicker funds go into the general fund, where they may not be directly allocated to education. Hudson and other supporters argue that redirecting these funds for school maintenance could help address the significant infrastructure challenges many districts face.
The Push for Change
Proponents of reforming the kicker system point to the growing need for funding in key areas like housing and education. As Oregon’s homelessness crisis worsens and public schools grapple with poor facilities, lawmakers argue that surplus tax revenue could be better spent addressing these urgent issues. The corporate kicker, in particular, is seen as an opportunity to help districts improve school buildings without relying on costly bond measures that often fail to pass.
For instance, Hudson noted that many school districts are struggling to maintain their facilities, and without dedicated funding, these districts are left to rely on bonds, which are often rejected by voters. By redirecting corporate kicker funds, lawmakers hope to provide a more predictable and sustainable solution to these challenges.
“There’s a lot of good evidence that school physical environments affect learning,” Hudson said. “Students don’t learn as well when they’re too hot, when they don’t have good quality air, or when their classroom ceiling is falling apart.”
Opposition to Reform
Despite the growing calls for reform, opposition to changes in the kicker system remains strong. The personal kicker, in particular, has been defended by many who see it as a crucial refund for taxpayers. Critics of proposals to eliminate or alter the system argue that Oregonians should not be deprived of their share of surplus revenue, especially in a state where taxes are high and many residents are already facing financial challenges.
The debate over the kicker highlights the broader issue of balancing fiscal responsibility with the need to fund essential public services. While the surplus refund has long been a point of pride for Oregonians, some lawmakers now question whether it remains the most effective way to distribute excess revenue.
Looking Ahead
As the legislative session continues, the future of the kicker remains uncertain. While some proposals are gaining traction, particularly those that seek to redirect corporate kicker funds to school infrastructure, others face an uphill battle. With public hearings still to come, the conversation around the kicker will likely continue to evolve as lawmakers weigh the competing demands of taxpayers, education advocates, and those working to address the state’s most pressing social issues.
For now, Oregonians will have to wait and see if this long-standing element of the state’s tax policy will undergo a significant overhaul—or if the kicker will continue to provide refunds to residents for years to come.
