Give kicker a 'timeout'.

Byline: The Register-Guard

Gov. Ted Kulongoski has been criticized, often justifiably, for failing to provide the bold, visionary leadership needed to rescue Oregon from its slow-motion free-fall into mediocrity.

On Thursday, Kulongoski answered those critics with an unexpected call for the state Legislature to suspend corporate and personal "kicker" income tax refunds for the next six years. The governor proposed that the millions of dollars in unanticipated tax revenues be used to bolster the state's economy, starting with rebuilding the state's decimated education and health care systems.

Don't think that's a bold, risk-taking move? Think again. Kulongoski faces a fierce re-election battle against Republican Ron Saxton and independent Ben Westlund in the fall. While Oregon voters may be willing to see the mostly-out-of-state corporations surrender their rebates, they may have quite a different reaction to the governor's proposal that they surrender kicker checks that are expected to average $230 per household.

Don't think it's visionary? No one would have been surprised if Kulongoski had called, as he has in the past, for the corporate kicker to be deposited in a "rainy day" fund to cushion the budget from future recessions. He might have raised a few eyebrows by calling for the personal kicker to be partially suspended for a year. Instead, the governor dropped back from the political line of scrimmage and threw the bomb - a six-year full "time-out" for both the personal and corporate kickers.

It's uncertain how Kulongoski's move will affect his political future. But there is no doubt that the state's long-term economic future will be bleak without a substantial and prolonged reinvestment in critical public services, in particular health care and education. State Sen. Ryan Deckert, D-Beaverton, rightly observed that the Legislature faces a stark and very real choice when he asked: "Do we want to be Washington or do we want to be Alabama?"

Nor is there any doubt that Oregon's tax system is one of the most dysfunctional in the nation and threatens to undermine the economic expansion that has prompted the largest combined kicker in history for corporate and individual taxpayers.

If Oregon's tax policy were charged with felony foolishness, the kicker law would be exhibit A. It punishes Oregon for unanticipated economic upturns, needlessly sacrifices opportunities to improve public services and denies the state the ability to save for economic downturns.

Current projections show the kicker law will trigger personal income tax refunds totaling $883 million next year. Corporate income taxpayers, most them headquartered out of state, will receive an estimated $200 million. At a time when schools, health care, public safety and other state services remain desperate for funding, the prospect of the state giving away more than a billion dollars in tax rebates is like a critically injured accident victim being forced to donate at the local blood bank.

While Kulongoski wants to use the personal kicker money to reinvest in education, health care and other core services, he wants to divert the corporate kicker into a rainy day fund. He's served long enough in state government to remember how badly recessions have hurt Oregon, forcing deep budget cuts that undermined the very services that held the key for economic recovery. If Kulongoski's proposal succeeds, the state could draw on a rainy day fund during future downturns, using money from good times to ease the pain of the bad ones that invariably follow.

Kulongoski's proposal faces an uncertain future. Saxton and Republican leaders in the Legislature swiftly criticized his proposal to suspend the personal kicker, accusing the governor of trying to raise Oregonians' taxes.

That's inaccurate pandering. The unexpectedly high state revenues that trigger kicker rebates do not result from tax increases but from increases in economic activity.

Meanwhile, Saxton says he agrees that Oregon needs a rainy day fund but insists he can find the money to create one by improving state management. It's a strategy that's reminiscent of comedian Steve Martin's famous advice on "how to be a millionaire and not pay taxes." The answer: Get a million dollars and then don't pay taxes.

Kulongoski's opponents and state lawmakers should resist the tiresome tradition of playing politics with the kicker. They should support the governor's call to suspend a kicker law that has kicked this state senseless for too many years.