FILE — Oregon capitol building flag

A view of the Pioneer Man statue atop the Oregon state capitol building in Salem, Oregon on December 21, 2020.

(The Center Square) – Come tax season, Oregonians will have to part ways with a chunk of their federal stimulus payments, but not if one Oregon lawmaker has anything to say about it.

Although the federal government is not taxing either of the one-time stimulus payments paid out to individuals and families in 2020, Oregon and a handful of other states will be this tax cycle.

According to a report from the Legislative Revenue Office, an average family of four would see roughly $300 of their 2020 stimulus money sucked up by state income taxes, placing about $110 million in state coffers.

A bill being drafted by Oregon Sen. Dick Anderson, R-Lincoln City, would ensure Oregonians would keep every penny of that stimulus money.

"Struggling working families need our help, not for us to be taking more money from them during these challenging times," Sen. Anderson continued. "It’s an issue of fairness. Should the state be taking money that was intended to help people? I don’t think so, and most my constituents from the coast don’t think so either."

Raising state tax revenue is going to be critical as state economists estimate Oregon's next two-year budget cycle could still see a budget gap of $1.6 billion between 2022 and 2023. 

Gov. Kate Brown cautioned late last year that a big budget gap could place many projects on hold, including the addiction centers promised in the voter-approved Measure 110 which passed overwhelmingly last fall.

Boosting household income may be even more critical for Oregonians in the retail, leisure, and hospitality industries that have yet to recover from an 18% jobs decline or almost double the national average.

The earliest Anderson's bill could go into effect under state law is 91 days after the end of the 2021 legislative session. Oregonian tax filers could choose to amend their 2020 tax filing or apply for a tax credit on their 2021 tax forms.

The bill would also exempt all future federal stimulus checks from state taxes.

Staff Reporter

Tim Gruver is a politics and public policy reporter. He is a University of Washington alum and the recipient of the 2017 Pioneer News Award for Reporting. His work has appeared in Politico, the Kitsap Daily News, and the Northwest Asian Weekly.