Oregon Senate Democrats block federal stimulus tax breaks
(The Center Square) – Senate Democrats have shot down a bill to give $300 million in tax breaks for Oregonians who netted individual federal stimulus payments during the pandemic.
Under Oregon’s tax code, some 870,000 Oregonians are expected to pay more in state taxes on their federal stimulus money passed by Congress.
Senate Bill 842 was introduced in March by state Sen. Dick Anderson, R-Lincoln City. It would have created an income tax credit for Oregonians to apply to their 2022 tax returns exempting their federal stimulus money. It’s remained in political limbo since it was referred to the Senate Finance and Revenue Committee in March.
On Thursday, Anderson made a motion in the Senate to debate and vote on SB 842. The motion failed largely along party lines. The Lincoln City Republican said he was outraged his colleagues were unwilling to debate the matter.
“I am used to passing common-sense, bipartisan ideas that fix unintended consequences,” Anderson said. “There is no defensible reason to be taking part of Oregonians’ stimulus checks, especially given Oregon’s current financial position.”
In May, state economic forecasts have pegged Oregon tax revenue at $1.2 billion more than initially projected. The picture is brighter still with taxpayers owed a historic $1.4 billion tax rebate or “kicker” under state law if Oregon lawmakers sign off on it. That all come as the state’s cash reserves stand at more than a billion dollars which Gov. Kate Brown has insisted the state leave untouched.
Tax-free federal stimulus is an idea that holds water with Oregon’s Congressional delegation. In February, U.S. Rep Peter DeFazio, D-Oregon, sent Brown, House Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, a letter expressing support for exempting stimulus payments from taxes.
Oregon Republicans have feuded with Democratic colleagues throughout the 2021 session on paying it forward to Oregonians. Democrats have vied to go big on education, addiction centers, and wildland firefighting resources this session. Republicans have argued direct payments would be better spent by Oregon taxpayers than tied up in government programs.
“Democrats blocking this legislation shows Oregonians exactly where their priorities are,” said Senate Minority Leader Fred Giro, R-Lyons. “This money belongs in the pockets of Oregonians. It is only right to return it to them.”
A similar bill, HB 3411, has received no public hearings since its introduction on Monday. As of Thursday, the bill remained on the House Speaker’s desk awaiting referral.
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