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All articles by David Blatt

Should Oklahoma broaden the sales tax to more services?

by | February 11th, 2016 | Posted in Blog, Budget, Taxes | Comments (1)

Certified ServiceAs part of her effort to close the state’s budget shortfall and avoid devastating cuts, Gov. Mary Fallin has proposed $910.5 million in additional revenues in her FY 2017 Executive Budget. The largest revenue item involves changes to the sales tax, which she labels “sales tax modernization.” In her State of the State speech, the Governor explained that, “Modernizing the sales tax code means keeping the same low rates and applying them in ways that better reflect today’s commerce and consumer behaviors.”

Her sales tax proposals involve four components: applying the sales tax to selected services; eliminating some sales tax exemptions; applying the sales tax to items delivered electronically; and improving sales tax auditing with enhanced technology. Collectively, these changes are estimated to generate $200 million in additional recurring revenues. However, the Governor’s budget offers no details as to which services should be taxed or which exemptions should be removed. She does suggest that “if structured properly,” the revenue from broadening the sales tax base could increase overall sales tax collections and allow for a lowering of the state’s sales tax rate.

This post looks more closely at issues surrounding taxing services; a follow-up post will look at the other sales tax proposals, as well as options for enhancing collections from online sales, an idea that was not explicitly part of the Governor’s proposal. (This article borrows from a 2011 OK Policy report, “Fixing the Sales Tax: Options for Reform”, which explored the ideas now being proposed by Governor Fallin. Our brief was in turn indebted to work by Michael Mazerov of the Center on Budget and Policy Priorities.)

continue reading Should Oklahoma broaden the sales tax to more services?

Here are our top priorities for Oklahoma’s 2016 legislative session

Over 1,700 bills and resolutions have been introduced for the 2016 legislative session, along with an equal number of measures from last session that remain alive and could still be considered this year. Despite the  plethora of legislation, there is little doubt that this session will be dominated by debates over how to address the state’s massive budget shortfall, which is at $901 million and is likely to grow even larger when the Board of Equalization certifies new projections in mid-February.

For OK Policy too, budget and tax issues will be of highest concern over the coming months. But we will also pay close attention to many other issue areas where there may be opportunities for policy gains or threats of serious setbacks. Last fall, our staff went through a multi-step process to identify our top priorities for 2016, identifying those issues that were of the greatest importance to Oklahomans while also fitting within our organization’s mission, expertise, and ability to make a difference. We came up with  some two dozen issues in six areas: budget and taxes, education, criminal justice, health care, voting and elections, and economic opportunity. In December, many of you took the time to complete a survey and offer feedback on our issues, which has helped us further hone our plan for the session.

Here is a brief summary of our 2016 policy priorities. We will be writing more about many of these issues in the coming weeks.

continue reading Here are our top priorities for Oklahoma’s 2016 legislative session

Balanced solutions to Oklahoma’s budget emergency

Download our 1-page Budget Options Fact Sheetrevenue_on_the_table

Oklahoma is facing a full-fledged budget emergency. This year’s budget is nearly $900 million, or 11.4 percent, below that of fiscal year 2009 when adjusted for inflation. A mid-year revenue failure was declared in December due to revenue collections coming in below projections, forcing most agencies to implement deeper cuts, and a second round of mid-year cuts could be necessary. Legislators are currently expected to have $901 million less for next year’s budget than this year – and the shortfall could grow even greater when new revenue estimates are released in February.

In recent years, policymakers have relied on budget cuts and one-time revenue fixes to cobble together the annual budget. Critical state services have already been cut deeply and repeatedly, leading to severe teacher shortages, larger class sizes, higher tuition charges and user fees, understaffed facilities, reduced payments for health care and social service providers, long waiting lists for services, and other harmful effects. The dependence on one-time revenues has created a chronic budget hole that we can’t fill even when tax collections improve.

If we try to solve our budget crisis only by doubling down on budget cuts and one-time revenues, we will only inflict greater damage to our economy and to the well-being of Oklahomans. Instead, we can and must solve this crisis through a more balanced approach that includes new recurring revenues.

continue reading Balanced solutions to Oklahoma’s budget emergency

Ryan Gentzler joins OK Policy as criminal justice policy analyst

Ryan Gentzler

Ryan Gentzler

Oklahoma Policy Institute is pleased to announce that Ryan Gentzler has joined the organization in a new policy analyst position that will focus on criminal justice issues. The position is funded through a grant from the Center on Budget and Policy Priorities that is intended to support state policy groups in work that can have a significant impact on critical policy issues.

“We are very excited to be adding a dedicated staff person to examine Oklahoma’s criminal justice policies,” said David Blatt, OK Policy’s Executive Director. “Many organizations have laid the groundwork for criminal justice reform, and with an increasing number of political and civic leaders getting on board, the time is ripe for significant and urgently-needed progress.”

With the addition of an analyst focused on criminal justice issues, OK Policy will be able to expand its research on how to reduce incarceration while protecting public safety, expand proven community-based alternatives to jail and prison, and make it easier for Oklahomans with felony records to rebuild their lives after incarceration.

continue reading Ryan Gentzler joins OK Policy as criminal justice policy analyst

Tax cuts now reducing state revenues by over $1 billion per year

by | January 12th, 2016 | Posted in Blog, Budget, Taxes | Comments (3)

Financial crisisA new report by OK Policy finds that the cost of state income tax cuts since the mid-2000s has grown to over $1 billion annually. Repeated tax cuts and shrinking state budgets have left state services severely weakened, even before next year’s expected massive budget shortfall that could reach or exceed a billion dollars.

These billion-dollar tax cuts have come at the direct expense of funding for core public services that are important for the prosperity and well-being of Oklahomans. At the same time, the report finds that tax cuts have not brought the boost to the state’s economy that supporters predicted, and they have given the biggest cash benefits by far to the wealthiest Oklahomans while doing little for low- and middle-income families.

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Leadership failure

by | January 1st, 2016 | Posted in Blog, Budget, Taxes | Comments (3)

An earlier version of this post appeared in the Journal Record

Today, as Oklahomans gather together to enjoy the first day of  the new year by watching Bowl Games, feasting on black-eyed peas, and nursing hangovers, two significant and seemingly irreconcilable events are occurring simultaneously in the world of state budget and taxes.avg-tax-cut

The first is that the budget cuts occasioned by the state’s mid-year revenue failure take effect. As a result of tax collections coming in below projections, the Office of Management and Enterprise Services last week announced that every agency funded by the General Revenue Fund (GRF) would take a 3 percent cut beginning in January. Since the cut is happening half-way through the year, agency’s monthly allocations from the GRF will actually be cut 6 percent (see this spreadsheet for details).  These cuts, totaling $179 million, come on top of the cuts many agencies took going into the current budget year and repeated years of cutbacks and flat funding that have hammered state services.

Today also marks the day when Oklahoma’s top income tax rate falls from 5.25 to 5.0 percent. This tax cut will allow the median Oklahoma household, with an income of $45,700, to pay an average of $29 less over the course of the year, or about $2.50 less per month. Four-fifths of families, those with incomes under $97,000, will receive less than $100 per year. Two out of five households will get no benefit at all from the tax cut because they make too little to have any of their income taxed at the top rate. Meanwhile, a full 24 percent of the total cut will go to the wealthiest 1 percent of households, with an average income well over $1 million; these families, on average, will see their state taxes reduced by over $2,000.

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Five reasons NOT to make a year-end donation to OK Policy

by | December 30th, 2015 | Posted in Blog, OK Policy | Comments (0)

scrooge1As the end of the year approaches, you’re no doubt besieged by dozens of organizations that do good and important work pleading for a donation. While we too spend a lot of time telling our supporters why they should donate to OK Policy, it’s become a year-end tradition for us to remind you that there are plenty of great reasons not to contribute to OK Policy as well. Here are five of them:

1. Facts don’t matter

Facts, schmacts – who needs ’em?? If you believe public policy debates and decisions should be guided by party affiliation, ideological beliefs, and ill-informed opinion, please do NOT click here to donate to OK Policy. Because our role is to provide independent, data-driven information, analysis, and ideas on the major policy issues facing Oklahoma. Our legislative primer, county facts, poverty profile, and budget highlights all provide the facts you’ll want to avoid.

2. There’s only one side to every debate

When one party controls the legislature and executive branch, it can be easy to get everyone on board on issues like cutting the income tax or opposing the expansion of health care coverage. Who needs a think-tank complicating matters by presenting the other side of the argument in a way that claims the attention of policymakers, editorial boards, and engaged citizens? OK Policy is that irksome voice ensuring that competing points of view are heard in Oklahoma. But if you believe there’s only one side to every debate, then you should most definitely not donate to OK Policy

continue reading Five reasons NOT to make a year-end donation to OK Policy

15 for ’15: Our most popular blog posts of the year

by | December 28th, 2015 | Posted in Blog, OK Policy | Comments (1)

2015It’s been another busy and productive year for OK Policy. We organized a series of major events, including our 3rd Summer Policy Institute, 2nd State Budget Summit, and 1st Fall Pol workshop; added two new staffers, Tyler Parette and DeVon Douglas; hosted seven interns and mentored two sets of Research Fellows; updated our CountyStats, Legislative Primer and Poverty Profile; wrote some 60 columns and op-eds, gave over 80 public presentations, compiled over 225 issues of In the Know, and traveled through every county in Oklahoma on a unicycle (not really – that was Todd Lamb).

We also posted on our blog almost every weekday throughout the year. Here we look back at some of the highlights with a countdown of our most popular blog posts in 2015. 

#15

Please don’t feed the stereotypes: In July, the Oklahoma Republican Party ignited a firestorm with a Facebook post pointing out a so-called irony of signs in national parks warning that feeding animals can create dependence on handouts at a time when a growing number of Americans are receiving federal food stamp benefits. We took the time to explain who’s served by the food safety net and to argue that we’d be better off creating more opportunities for workers to earn a decent living.

continue reading 15 for ’15: Our most popular blog posts of the year

Making sense of the mid-year “revenue failure”

by | December 23rd, 2015 | Posted in Blog, Budget | Comments (0)

budget cutsToday Finance Secretary Preston Doerflinger officially declared a revenue failure, triggering $176.9 million in cuts in agency allocations for the current budget year, FY 2016.

The revenue failure is the result of revenue collections coming in well below the official estimate upon which this year’s appropriations were based. Through the first five months of Fiscal Year 2016, revenues to the General Revenue Fund (GRF) are $101.9 million, or 4.6 percent, below the official estimate. However, the Board of Equalization this week certified revised projections for FY 2016 showing GR falling 7.7 percent, or $444.3 million, below the initial estimate the Board approved in June for the full year.

The state Constitution specifies that the Legislature may not appropriate more than 95 percent of certified funds for the upcoming year. This builds a 5 percent cushion into the budget when revenues come in below projections. When revenues fall below 95 percent of the certified estimate,  the Director of the Office of Management and Enterprise Services (in this case, Secretary Doerflinger) is required to declare a revenue failure and reduce agency allocations by an amount sufficient to bring them into balance with actual revenue collections. This marks the fifth revenue failure since 2000. Previous mid-year budget cuts occurred in FY 2002, FY 2003, FY 2009 (although those cuts were later restored) and FY 2010.

Although today’s official projections are for a 2.7 percent GR shortfall over the course of the year, Doerflinger opted to impose 3 percent cuts in order to “give an extra cushion” should actual revenue collections continue to perform below projections.

continue reading Making sense of the mid-year “revenue failure”

In the Know is on break!

by | December 21st, 2015 | Posted in Blog | Comments (0)

In-The-KnowOur hard-working elves who stay up late and get up early to compile In the Know for you each day are taking a couple of weeks off to rest up and help spread holiday cheer. ITK will be back, refreshed and rarin’ to go, on Monday, January 4th. We’ll be posting to the blog periodically over the holidays.

You can let us know you miss us by making a year-end, tax-deductible contribution to OK Policy through our secure website.

We wish all who celebrate a very merry Christmas and happy New Year.

 

 

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