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All articles by David Blatt

The down low on taxing downloads

by | April 28th, 2016 | Posted in Taxes | Comments (0)

Online shopping concept.One of the recurring revenue options that Gov. Mary Fallin laid out in her FY 2017 Executive Budget involved “modernizing the sales tax.” This was presented as something of a catch-all category described as “keeping the same low rates and applying them in ways that better reflect today’s commerce and consumer behaviors.” For the Governor, the biggest components of sales tax modernization are broadening the sales tax to include more services, which we discussed here,  expanding collections on Internet sales, and eliminating sales tax exemptions. Another component of the Governor’s plan, which has received little attention, is “applying the sales tax to items delivered electronically.”

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Governor’s Budget 2.0: Cuts are not inevitable

by | April 18th, 2016 | Posted in Blog, Budget | Comments (5)

Last week, Governor Mary Fallin took the unusual step of delivering a second budget proposal for the upcoming fiscal year. Her new proposal, dubbed Executive Budget 2.0, adjusts for the changed circumstances since her first budget was announced in early February. Soon after her original budget was released, revised estimates increased the budget shortfall from $900 million to $1.3 billion.

By announcing a revised budget, Gov. Fallin was reminding legislators and the public that she intends to play an active role in the ongoing budget negotiations over the coming weeks and calling attention both to ideas she’d originally laid out in February and to new ones she’s now put on the table. Most importantly, Gov. Fallin was sending a strong signal that despite the enormity of the budget shortfall, deeper spending cuts to core public services are not inevitable.

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New fact sheet outlines Oklahoma’s options for solving the budget emergency

by | April 11th, 2016 | Posted in Blog, Budget, Taxes | Comments (2)

Notebook with text inside Revenue on table with coffee, laptop pOklahoma is grappling with a $1.3 billion shortfall for next year’s budget. Following two mid-year revenue failures on top of years of shrinking budgets, every state agency has been forced to dig deep and cut anything that could be seen as “extra” — the easy savings are already squeezed out. Without new revenue to close the shortfall, state agencies and school districts face massive budget cuts that will inflict long-lasting harm on Oklahoma families, businesses, and communities.

We can and must do something to solve the budget emergency. OK Policy has compiled a long list of options [PDF]to boost state revenues that should be considered as part of a fair and sustainable budget. The 16 options mostly fall into four broad categories:

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High-income surcharge would help solve budget emergency

by | April 7th, 2016 | Posted in Budget, Taxes | Comments (3)

Businessman Placing Coin Over Stack Of CoinsThe evidence is now undeniable that Oklahoma is facing a full-fledged emergency. With each passing day, the toll of budget cuts on Oklahoma families, schools, businesses, and communities becomes more alarming. Given the enormity of the budget shortfall, it’s widely understood that the budget can’t be balanced primarily through deeper spending cuts. The income tax needs to be part of a fair and sustainable solution to the budget emergency, and out of many hard choices about the budget, adding a high-income surcharge would do the least damage to our economy and to Oklahoma families’ quality of life.

Overall, Oklahoma’s state and local taxes are regressive, with low and moderate-income Oklahomans contributing a greater share of their income in taxes than wealthier households. The income tax is the one progressive component of our state and local tax system, serving  to partly offset the regressivity of sales and excise taxes. But state income tax cuts over the past dozen years have made our tax system more regressive and contributed to current and ongoing  budget strains.

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Quick Take: What’s the state of the Rainy Day Fund?

by | March 31st, 2016 | Posted in Budget | Comments (0)

In the wake of this year’s second mid-year revenue failure, Governor Fallin and legislative leaders reached an agreement to tap the Rainy Day Fund to help public schools and the Department of Corrections make it through the year. The Legislature promptly passed SB 1572, which provided $51 million to the State Department of Education, and SB 1571, which provided $27.6 million for the Department of Corrections. With the supplemental, DOC has had its funding fully restored to its initial FY 2016 levels, while common education remains $58.2 million below its initial appropriations amount. Other state agencies are left with 7 percent cuts to their state appropriations from the General Revenue Fund; total appropriations are now $334.2 million below the initial FY 2016 budget.

These latest withdrawals leave the Rainy Day Fund with a balance of $309 million. The Fund hit a post-Great Recession peak of $580 million at the end of FY 2013. Since then, $45 million was withdrawn to help cover emergency expenses associated with the Moore tornadoes in 2013 and $150 million was appropriated in 2015 for this year’s budget.

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Is this the year Oklahoma takes action to stop losing millions in unpaid online sales taxes?

by | March 14th, 2016 | Posted in Blog, Taxes | Comments (1)

online commerceAmong her proposals to address the state’s enormous budget hole in last month’s State of the State address, Governor Mary Fallin called for “sales tax modernization.” Modernization could have several components, including broadening the sales tax to cover more services (which we discussed here), eliminating sales tax exemptions, applying the sales tax to items delivered electronically, and improving sales tax auditing. All these could be valuable reforms, though their political likelihood varies greatly. One reform that may have the best chance for legislative action on the sales tax this session is a renewed effort to collect sales tax on online sales.

Oklahomans already legally owe state and local taxes for their online purchases, regardless of whether the seller charges the tax. However, the US Supreme Court ruled in the 1992 Quill decision that retailers lacking a physical presence in a state, or “nexus,” cannot be required to collect and remit taxes. This means that an online retailer like Target.com, that has brick-and-mortar stores in Oklahoma, collects sales tax on online purchases from Oklahomans, while other online retailers, like Amazon.com, do not. Oklahoma encourages taxpayers to pay the tax they owe on their online purchases when they file their annual taxes, but less than 4 percent of filers actually do so.

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Norman Superintendent, Cherokee Nation business leader join OK Policy Board

Oklahoma Policy Institute is pleased to announce that Dr. Joseph (Joe) Siano, Superintendent of Norman Public Schools, and Charles (Chuck) Garrett, executive vice president at Cherokee Nation Businesses, have joined our Board of Directors.

“We are delighted to add two widely-admired and respected individuals who have made outstanding contributions to our state through their professional careers and community service,” said Ann-Clore Duncan, OK Policy’s Board Chair. “Joe and Chuck will add to our tradition of building a strong, nonpartisan board that is thoughtful, far-sighted, policy-focused, and comprised of individuals who bring a wide range of personal and professional experiences to the table.”

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Oklahoma should tap the Rainy Day Fund now to ease mid-year cuts

by | March 3rd, 2016 | Posted in Blog, Budget | Comments (2)

As Oklahoma grapples with a rapid decline in state revenue collections, agency budgets have already been cut once this year, and a second round of even greater cuts has just been announced. Oklahoma’s Rainy Day Fund was designed specifically to be used, in part, to address mid-year revenue shortfalls. The Legislature can and should tap the Rainy Day Fund to minimize the mid-year cuts and avoid the most severe damage to education, health care, human services, and public safety.

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Bad Bet: Fantasy sports bills could put state gaming revenues at risk

by | March 3rd, 2016 | Posted in Taxes | Comments (3)

NFL football on field with a pile of moneyIn 2004, Oklahoma voters approved State Question 712, which established legal compacts between the state of Oklahoma and Native American tribes to regulate tribal gaming. Under the gaming compacts, tribes contribute over $125 million to the state, which goes almost exclusively to public education. However, the compacts and the millions in education funds may be in jeopardy if the Oklahoma Legislature passes a bill aimed at authorizing daily fantasy sports contests.

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Oklahoma thinks the unthinkable with health care cuts

by | February 23rd, 2016 | Posted in Blog, Budget, Healthcare | Comments (3)

Men with chest pain - heart attackShould Oklahoma strip Medicaid health care coverage from people least able to afford insurance on their own? In a state that trails most of the nation in uninsured rates and health outcomes, who could defend this?

Should the Department of Mental Health and Substance Abuse Services no longer cover mental health services provided to children with mental illness by therapists in individual practice?  When less than 40 percent of children with a major depressive episode received treatment in the past year, how could such a move even be on the table?

Yet these are two of the many bad ideas now being considered by legislators and agency heads. After years of damaging budget cuts and huge shortfalls that are forcing state agencies to reduce vital services even more, the once-unthinkable is being thought.

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