Oregon lawmakers looking for a new source of money to fight wildfires this year have come up with few slam-dunk answers.

Now one option that is often considered politically impossible appears to be gaining traction.

Gov. Tina Kotek on Monday became the latest official to signal support for withholding part of next year’s expected personal income “kicker” tax refund in order to cover wildfire costs.

“We need to find some resources to do that,” Kotek told reporters in a press briefing. “I do think this conversation – on a one-time basis – of supporting rural Oregon by potentially using a portion of the kicker tax break would be a beneficial approach.”

Specifically, Kotek mentioned withholding $1 billion of next year’s expected $1.64 billion tax refund in order to fund wildfire suppression and prevention.

“That would be very helpful for the state,” Kotek said, arguing that the money would represent a transfer of wealth from urban to rural Oregon – a potential selling point for Republicans. “Most of the folks who are going to be paying that are folks who do not live in fire-prone areas.”

The comments appear to be the first time Kotek has publicly supported clawing back a portion of the kicker during her tenure as governor. In 2023, as taxpayers were getting ready to receive a massive $5.6 billion refund, she declined to entertain the idea of withholding all or part of the money to help fund her budget priorities, saying the tax relief was “really important to Oregonians.”

The kicker is triggered when personal income taxes in a two-year budget cycle come in at least 2% higher than lawmakers expected when setting the budget. In such cases, all the excess money is given back to taxpayers in the form of tax credits. The rebate is codified in Oregon’s Constitution.

But lawmakers have an option if they can agree on a better use for the kicker money. With a two-thirds supermajority vote in each chamber, they can opt to suspend the refund. That’s happened once since the policy was enacted in the late 70s.

Finding such strong majorities is difficult in today’s Legislature, where the kicker can be a political third rail. Even if Democrats agree on such a move, a vote to suspend the kicker would require two Republican votes in the 30-member Senate and four in the 60-member House.

The GOP has stridently opposed past calls to suspend the rebate, and has repeatedly accused Democrats this year of seeking to gouge Oregonians with a transportation proposal that could raise taxes by $1 billion a year.

The Legislature has made it a priority this session to find money for increasingly expensive wildfire seasons. The need became clear last year, when the Legislature held a December special session to pay its wildfire bills.

But no ideal options have emerged. Lawmakers have considered slapping 5 cents onto the state’s 10-cent bottle deposit, pulling money from lottery revenues, or redirecting an obscure tax on insurance companies. In her own recommended budget, Kotek urged lawmakers to withhold payments into the state’s reserve fund in order to pay for wildfires.

Then there’s the kicker idea, pushed most energetically by Sen. Jeff Golden, D-Ashland.

For years, Golden has argued the state could solve much of its fire funding problem by suspending the entire kicker and putting it in an interest-bearing fund. If that fund earned 5% interest every year, Golden says the $1.64 billion kicker would earn the state $164 million each budget cycle for wildfire spending – a little more than half of the projected need.

“We can jump on this one-time opportunity and then find an additional $150 million dollars every biennium to fully fund wildfire,” Golden said on the Senate floor last week. “Or we do nothing and have to find $300 million, twice as much, from who knows where.”

Golden, who represents a district in Southern Oregon that is no stranger to wildfire, conceded last week that the chance of his proposal was uncertain. On Monday, he said the state would be far better off suspending the entire kicker, rather than just a portion as Kotek suggested.

But he added: “We should do what we have to do to get to 20 [votes] on this side and 40 in the House.”

News Source : https://www.opb.org/article/2025/05/19/gov-tina-kotek-1-one-billion-oregon-kicker-wildfire-costs/