Millions of people could receive $1,600 direct payments in 2026

Oregon's $1,600 rebate just gained a new set of supporters ahead of the November election, who will put the measure before voters as a final decision. Newsweek spoke to experts about what this means for families – and for the state.

Measure 118 will be on the ballot for Oregonians this election. The bill would provide a direct payment of $1,600 to all Oregon residents.

The Community Alliance of Tenants and Portland Tenants United, both tenant rights organizations that advocate for affordable housing, both endorsed the discount this week.

More from Newsweek Vault: Checking Account vs. Savings Account: Which is Best for Your Finances?

“Measure 118 is a lifeline for Oregon renters facing skyrocketing costs,” Kim McCarty, executive director of the Community Alliance of Tenants, said in a statement. “This discount provides immediate relief in a volatile and often predatory real estate market. For too many, a $1,600 check is the difference between a stable home and homelessness.”

The rebate, which would allow all residents to pay unconditionally, could help alleviate some of the affordable housing issues facing the state.

According to a recent report from the Oregon Office of Economic Analysis, nearly half of all renters in the state paid more than 30 percent of their income on housing, and more than half reported not having enough money to afford essentials after paying rent like food and childcare.

More from Newsweek Vault: Interest rates on these high-yield savings accounts are still high

“This affordability crisis has been exacerbated by a lack of affordable housing units and rising rents,” McCarty said. “Therefore, there is a growing need for relief programs and policies like Measure 118 that can help Oregonians control rental prices and avoid housing instability.”

For those living in the Portland metro area, the refund would cover about a month's rent, but for many the cost has increased.

More from Newsweek Vault: Online Banks vs. Traditional Banks: Learn the Differences

“When rents rise so much, tenants report cutting back on food and medicine to compensate,” Leeor Schweitzer, an organizer with Portland Tenants United, said in a statement. “The Oregon rebate will not replace needed tenant rights, but it will negate this rent increase and provide much-needed support to low-income renters.”

If passed, any resident who has lived in Oregon for more than 200 days will receive the payment. This also includes minors.

But to get the $1,600 payments into the hands of Oregonians, the state would have to increase its minimum corporate tax rate by 3 percent after $25 million in state revenue.

Drew Powers, the founder of Illinois-based Powers Financial Group, said if the state adopted the rebate it would be a stepping stone to a universal basic income.

Still, the taxes needed to pass the payments could prevent the measure from passing.

“New taxes are rarely welcomed, whether they are at the corporate or personal level,” Powers said Newsweek. “Businesses fear the tax will target sales rather than profits, meaning industries with slim profit margins will be forced to pass the costs on to consumers.”

For individual voters, these higher costs could pose a problem that discourages them from approving the measure on Election Day. At the same time, some people will be concerned about how the state would then calculate low-income benefits like SNAP and Medicaid.

“Oregon Measure 118 is certainly imperfect, but it promotes the extremely popular and perhaps inevitable idea of ​​a universal basic income,” Powers said. “It will be interesting to see how it develops, what ultimately gets passed and what adjustments other states will make.”

Michael Ryan, a financial expert and founder and CEO of 9i Capital Group, called the discount “significant” but warned that large employers like Intel and Nike are not enthusiastic about the importance of the taxes.

“We’re seeing more and more states experimenting with different rebate structures,” Ryan said Newsweek. “But Oregon’s proposal is one of the most aggressive. It’s part of a broader trend of states trying to address income inequality through direct payments.”

Because of Oregon's progressive tendencies and its reliance on large employers, it would be a “sham” if the proposal actually passes in November, Ryan said.

Alex Beene, a financial literacy lecturer at the University of Tennessee at Martin, said one of the biggest drawbacks is the potentially higher prices that companies will impose on residents.

“However, the discount could end up doing more harm than good,” Beene said Newsweek.

“A 3 percent tax on state-owned companies could result in those same companies passing those costs on to the consumer. A discount would certainly be nice, but if you have to pay significantly more for items you buy from them.” These same companies could essentially wipe out any financial gain that a refund would bring.

If passed, the rebate would go into effect on taxes in 2025 and would first be paid out in 2026.

While the refunds would not be $1,600 immediately based on tax revenue, a state analysis estimated the refund would be up to $1,605 by 2027.

Democratic Gov. Tina Kotek has spoken out against the measure in recent months, telling voters it could have serious consequences for the state.

“It may look good on paper, but its flawed approach would blow a huge hole in the state budget and jeopardize essential services for low-wage and working families,” Kotek said previously, as reported by the Capital Oregon Chronicle.