Skip to main contentAssuming Oregon’s recent $1.3 billion Powerball winner takes the lump sum of $621 million, will the roughly $62 million they’ll pay in Oregon income tax increase our chances of getting a kicker payment next year, or is it just a drop in the bucket? Either way, can we get rid of the kicker and build a meaningful rainy day fund? —Jonathan S.
As I’ve said before, Jonathan, getting rid of the kicker involves convincing Oregonians that getting free money is bad, which is a tough sell. (Indeed, the existence of Powerball itself shows the degree to which they believe the exact opposite.) As prudent as it might be for the state to put its surpluses aside rather than squandering them on rebates—which are basically the tax-policy equivalent of lap dances and cocaine—we’re stuck with this system for the foreseeable future.
You weren’t the only wonk to connect the kicker to Powerball. Josh Lehner, senior economist at the Oregon Office of Economic Analysis, recently joked on Twitter* that the winner’s Oregon income tax would get us “13% of the way to the next kicker.”
Is that really true? At first blush it seems unlikely. The current kicker total is $5.6 billion; had the as-yet-unidentified winner hit the jackpot last year, the resulting $62 million tax bill would have added just over 1% to the rebate Oregon taxpayers are getting in 2024. The winner’s taxes are indeed a drop in the bucket compared to this year’s monster payout.
However, whether we get a kicker at all is determined by the size of the general fund surplus. Revenues need to exceed projections by only 2% to trigger a kicker rebate (though at that level it’ll be nothing to write home about).
Say projected revenues for the next cycle hold steady at $26 billion. We’ll get a kicker if we beat that by $520 million. The $62 million we’ve been talking about does get us around 13% (I got 12%, but whatever) of the way to that total. That’s the good news; the bad news is that the kicker on a $520 million surplus would come to only about $90 per taxpayer. Of that, the amount that would actually be coming from the lucky winner is maybe 10 bucks. Better than nothing, I guess, but at that point you might as well just have them give it to you in Powerball tickets.
*I refuse to call it “X.” Also, if I ever meet the child Elon Musk named “X Æ A-12,” I’m calling him Todd.
Questions? Send them to dr.know@wweek.com.