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SALEM — The state could return $400 million in personal income taxes to individuals if Oregon's unique kicker rebate is triggered later this year, state economists told lawmakers during a revenue forecast at the Capitol on Tuesday.

Even with that rebate, however, increased state revenues could help the Legislature chip away at a $1.6 billion shortfall in the next two year budget, bringing it closer to $1.4 billion. The forecast on Tuesday was the last state revenue estimate before lawmakers must finish writing the next two-year budget. The next forecast will be Aug. 23.

Economists predicted the state will bring in nearly $187 million more general fund and lottery revenue in 2017-19, compared with the last forecast in February.

Oregon's kicker takes effect when the state collects 2 percent more revenue than expected. If this happens, the state returns all of the extra money – even if it's more than 2 percent – to taxpayers in the form of a credit on their upcoming income taxes in 2018.

The kicker rule applies to corporate income taxes differently: If those collections total 2 percent more than projected, the extra money is not returned to companies, but put in the general fund for K-12 education.

State economist Mark McMullen said the kicker is not a done deal: based on the accuracy of previous forecasts, he said there's a two-thirds chance they are correct this time.

"One in three is a pretty good chance that this thing would be turned off," McMullen said. But if economists are wrong and there's no kicker, "it makes it highly likely we'll have a kicker in the (2017-2019 budget), given that we have lowered that forecast by $400 million as this one goes out."

Tuesday's revenue forecast is a crucial one because it gets at the kicker and budget shortfall in the upcoming biennium

The last kicker cost the state $402 million in 2015.

Gerry O'Brien is the editor for The Herald and News. Email him at or follow him in Twitter at  @gerry_obrien1