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What happened with the tax increase on cigarettes? (Capitol Updates)

by | May 23rd, 2016 | Posted in Capitol Updates, Healthcare, Taxes | Comments (0)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

What happened with the tax increase on cigarettes? It turned out to be a non-starter.

Talk of a cigarette tax increase began early in the session with a bill by Rep. Doug Cox (R-Grove) to nearly double it with an increase of $1 per pack from the current rate of $1.03. Our cigarette tax ranks 34th among the states. Rep. Cox’s bill dedicated the increased revenue to elementary and secondary schools which reflected what looked like the main budget priority when the legislative session began. Governor Fallin had recommended a $3,000 pay increase for teachers costing $178 million that would roughly match the $180 million to be raised by a cigarette tax increase. Cox’s bill was assigned to the House Appropriations and Budget Committee, but it never received a hearing.

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In The Know: House Speaker says Oklahoma budget proposal will cut $300 million

by | May 23rd, 2016 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

House Speaker: Oklahoma budget proposal likely next week: A budget proposal that’ll cut about $300 million from state agencies but protect health care services is expected next week, the speaker of the Oklahoma House said Friday. Rep. Jeff Hickman, R-Fairview, did not offer details, but said the budget will be offered in time for the Legislature to adjourn by May 27 as constitutionally required. Oklahoma faces a $1.3 billion budget hole, which will be filled with money from tax code changes, the elimination of some tax credits and expected bond packages, according to Rep. Earl Sears, R-Bartlesville, chairman of the House Joint Committee on Appropriations and Budget [KOCO].

Budget Crisis Clips Credit For Working Poor: In their final rush to contend with Oklahoma’s budget crisis, state lawmakers have voted to curtail a tax credit described by advocates as one of the best programs ever devised to help the working poor. The measure to eliminate the “refundable” portion of Oklahoma’s Earned Income Credit would reduce the income of about 200,000 low-income households by $147 a year on average, according to a recent data study [Oklahoma Watch]. OK Policy said in a statement that lawmakers who voted to curtail the credit “have made a deplorable decision” [OK Policy].

‘A train wreck’: Bizarre legislative session drawing to a close with much left to do: While legislative leaders tout the accomplishments of the current session, some longtime observers view it as “a train wreck.” Lawmakers must adjourn by 5 p.m. Friday or call a special session. Meanwhile, legislative leaders have yet to announce a budget agreement to fill a $1.3 billion hole for fiscal year 2017. Last week, lawmakers spent time on bills dealing with transgender students and bathrooms and voted to make abortion a felony, despite a U.S. Supreme Court case legalizing it [Tulsa World]. Gov. Mary Fallin vetoed the bill that would impose felony charges on doctors who perform abortions, calling the measure vague and unconstitutional [New York Times].

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The Weekly Wonk: Revenue options; rules out the window; dangerous corrections cuts; & more…

by | May 22nd, 2016 | Posted in Weekly Wonk | Comments (0)

the_weekly_wonk_logoWhat’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.

This Week from OK Policy

This week, OK Policy issued a statement on the legislature’s votes to end the “double deduction” and slash the Earned Income Tax Credit, and suggested a reasonable solution to the tobacco tax standoff. Executive Director David Blatt outlined revenue options that could avert a budget catastrophe. If the Legislature goes into special session, needed revenue-raising options can still be considered. David’s Journal Record column warned that the state Legislature’s habit of throwing its rules out the window in the last weeks of session is dangerous. If you missed Friday afternoon’s budget update webinar with David, Gene, and Kara Joy, slides are available here, audio is available here, and video is available here.

Policy Analyst Ryan Gentzler explained that the effects of budget cuts on state prisons are hidden but still dangerous. In a guest post, Dr. Mitch Randall of NorthHaven Church in Norman argued that budget cuts put an unbalanced burden on places of worship. Policy Analyst Carly Putnam wrote that proposed federal legislation could yank free school meals from more than 50,000 Oklahoma students.

OK Policy in the News

A Reuters exposé on the connection between low taxes on oil and gas production and education cuts and an American Prospect article on the battle over wind tax credits both used OK Policy data. We’ve previously written that even in the energy bust, Oklahoma’s oil and gas tax breaks exceed $400 million per year. Salon cited OK Policy while discussing the possibility that the state would accept federal funds to extend health coverage to the low-income uninsured. Blatt spoke to KFOR about tax breaks for the oil and gas industry. Woodward Public Schools Superintendent Kyle Reynolds quoted OK Policy data while explaining education funding issues in an event covered by the Woodword News. 

#DoSomethingOK

The legislature has less than a week to build and pass a sustainable state budget. It’s time to tell your legislators what is and isn’t on the table. Here’s how:  Insist they a) stabilize Oklahoma’s health care system by raising the cigarette tax and expanding Insure Oklahoma, and b) roll back tax cuts! Contact the two legislators who represent you, and have your friends do so too. We have to #DoSomethingOK! Find out more and join the fight at dosomethingok.org

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Statement on votes to end “double deduction” and slash Earned Income Tax Credit

by | May 20th, 2016 | Posted in Press Releases & Statements, Taxes | Comments (2)

Oklahoma Policy Institute issued the following statement in response to the House of Representatives giving final passage to SB 1604, which makes the state Earned Income Tax Credit non-refundable, and SB 1606, which ends the “double deduction”:

The legislators who voted to slash Oklahoma’s Earned Income Tax Cut (EITC) have made a deplorable decision. They decided that more than 200,000 working families, most with children, will lose up to $300 per year. These legislators voted to worsen the daily struggles of families to make ends meet and increase the burden on private charities. The same low-income working families who will lose this credit already pay a much greater share of their income in state and local taxes than wealthier Oklahomans. By cutting the EITC, we are asking the working poor to shoulder even more of the load.

Legislative leaders say this move was needed as part of their plan to help fill the state’s massive budget shortfall. We must not forget that this shortfall was caused in significant part by Republican leaders’ obstinate insistence on moving ahead with a $150 million tax cut that primarily benefits high-income households, on top of a decade of tax cuts that have grown to more than $1 billion per year. In fact, this year’s tax cut for just the wealthiest 1 percent of households will cost the state more than what is saved from cutting the EITC.

At the same time, we are grateful that the Legislature has also voted to finally end the “double deduction”, a nonsensical tax break that served no public purpose and primarily benefited the wealthiest taxpayers who itemize deductions. Oklahoma Policy Institute has championed this reform for many years, and ending this tax break is a rare positive step towards a fairer tax system.

Even after these cuts to tax breaks, Oklahoma leaders have a monumental task to close a billion dollar budget shortfall without decimating critical services. Preventing this year’s income tax cut is still the most common sense option that continues to be ignored by legislative leaders. Lawmakers will not be able to adequately pay teachers or meet other serious needs of our economy and communities until they set aside the reckless tax policy that created Oklahoma’s chronic deficits.

In The Know: Oklahoma lawmakers OK bill criminalizing performing abortion

by | May 20th, 2016 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

Oklahoma lawmakers OK bill criminalizing performing abortion: Oklahoma lawmakers have moved to effectively ban abortion in their state by making it a felony for doctors to perform the procedure, an effort the bill’s sponsor said Thursday is aimed at ultimately overturning the U.S. Supreme Court’s 1973 decision that legalized abortion nationwide. The bill , which abortion rights group Center for Reproductive Rights says is the first of its kind in the nation, also would restrict any physician who performs an abortion from obtaining or renewing a license to practice medicine in Oklahoma [Associated Press]. The Oklahoma House also passed legislation that requires the state Department of Health to develop informational material “for the purpose of achieving an abortion-free society,” but lawmakers didn’t approve any funding for it [Tulsa World].

Oklahoma House OKs earned income tax credit change: In a late-night legislative session that went past midnight, state House members voted early Friday morning to eliminate the refundable aspect of Oklahoma’s earned income tax credit. Senate Bill 1604 is expected to generate $28.9 million for the state budget. …Several House members argued against the bill, saying it would target Oklahoma’s working poor. The measure passed 51-45. The bill now goes to Gov. Mary Fallin [NewsOK]. If the measure goes into effect, a key tax credit for working families will be devastated [OK Policy].

Oklahoma lawmakers call for president’s impeachment, file religious-accommodation bill over transgender bathroom directive: Oklahoma Republican lawmakers are calling for the impeachment of the president and other federal officials and for students to be able to claim that their religious beliefs allow them to be exempted from using restrooms where transgender individuals are allowed. They filed two measures late Thursday in response to last week’s federal directive that schools must allow transgender students to use the restrooms that correspond with their gender identity [Tulsa World].

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Statement: Oklahoma has a responsible solution to tobacco tax standoff

Oklahoma Policy Institute released the following statement in response to the standoff in the Legislature over a tobacco tax increase:

Accepting available federal dollars for health care and rolling back an income tax cut that should not be happening in the midst of a massive budget shortfall are both reasonable and popular measures. A grand bargain is in reach if Oklahoma lawmakers are willing to show leadership: accept federal funds or suspend the tax cut as part of a deal to ensure supermajority support to increase the tobacco tax. This is the responsible path forward to prevent the closure of nursing homes and rural hospitals and other devastating cuts to critical services.

 

The effects of budget cuts on Oklahoma prisons are hidden but dangerous

by | May 19th, 2016 | Posted in Budget, Criminal Justice | Comments (4)

hands in prisonNo state agency has escaped budget cuts unscathed. For many Oklahomans, the effects are most visible in their schools and communities, as their children lose teachers and their friends and neighbors lose needed health care services.

Less visible is the toll that budget cuts have taken on Oklahoma’s prison system. Appropriations to the Department of Corrections have fallen from $527 million in 2005 (in 2015 dollars) to $485 million this year. That’s just enough to keep decaying facilities operating at minimal staffing levels as all “extras” — the services to treat and rehabilitate offenders — are cut to the bare minimum. The result is a dangerous situation inside prison walls, with inadequate supervision, no treatment for substance abuse and mental illness, and little hope for rehabilitation for the state’s inmates.

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In The Know: The world turned upside down: Oklahoma Republicans urge Democrats to vote for tax increase

by | May 19th, 2016 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

The world turned upside down: Oklahoma Republicans urge Democrats to vote for tax increase: Things have turned so upside down under the Capitol dome that Republicans were begging Democrats to vote for a tax increase on Wednesday. And the Democrats said no. House Democrats have generally opposed all Republican revenue-raising measures this session, saying they won’t vote for anything that doesn’t include a general income tax increase. But Wednesday was a tougher call. The Republican majority’s House leadership — and Gov. Mary Fallin — were counting on Democrat votes to pass House Bill 3210, a $1.50 per pack cigarette tax increase they say is needed to keep the state’s Medicaid program solvent [Tulsa World].

Oklahoma lawmakers ponder response to transgender bathroom directive: With the clock ticking on the legislative session and no budget agreement in sight, lawmakers are considering their options in response to a federal directive regarding which restrooms transgender individuals can use. “Senators are hearing from constituents who are registering their complete frustration and disappointment in the federal government,” Aaron Cooper, a spokesman for Senate President Pro Tem Brian Bingman, said Wednesday [Tulsa World].

Revenue options still on the table could avert budget catastrophe: With less than two weeks until the end of the Legislative session, there’s still no agreement on the state budget. The stakes are exceptionally high: unless legislators agree on ways to close the budget gap, deep cuts are certain to have a devastating impact on health care, education, public safety, and other critical services. As Finance Secretary Preston Doerflinger recently said, “Cuts to core services will be untenable and take years to recover from if recurring revenues are not enacted this year.” [OK Policy]

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Revenue options still on the table could avert budget catastrophe

by | May 18th, 2016 | Posted in Budget, Taxes | Comments (1)

revenueWith less than two weeks until the end of the Legislative session, there’s still no agreement on the state budget. The stakes are exceptionally high: unless legislators agree on ways to close the budget gap, deep cuts are certain to have a devastating impact on health care, education, public safety, and other critical services. As Finance Secretary Preston Doerflinger recently said, “Cuts to core services will be untenable and take years to recover from if recurring revenues are not enacted this year.”

The good news is that, even with $1.3 billion less certified revenue for the upcoming fiscal year than what was initially appropriated for this year, deeper cuts are not inevitable. Last month, Governor Fallin released a revised FY 2017 budget that included some $1.285 billion in additional revenue from a variety of sources. This new revenue led to total appropriations for FY 2017 of $6.990 billion, which is just 2 percent smaller than this year’s initial budget and 2.7 percent greater than this year’s revised budget after mid-year cuts and supplementals.

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In The Know: Mistakenly posted legislation sends shock waves through Capitol

by | May 18th, 2016 | Posted in In The Know | Comments (1)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

Mistakenly posted legislation sends shock waves through Capitol: What is being described as an “honest mistake” ratcheted up the tension in a state Capitol already on edge Tuesday. Speaker Jeff Hickman, R-Fairview, said two bills released Tuesday morning that call for boosting teacher pay by up to $10,000 a year while cutting benefits and raising the state sales tax, were early drafts of legislation that has been worked on this session, and he said final versions may or may not be heard in the coming days [Tulsa World]. The Oklahoma Education Association came out strongly against the legislation [KFOR].

As oil boom goes bust, Oklahoma protects drillers and squeezes schools: After intense lobbying, Oklahoma’s oilmen scored a victory two years ago. State lawmakers voted to keep in place some of the lowest taxes on oil and gas production in the United States – a break worth $470 million in fiscal year 2015 alone. The state’s schools haven’t been so fortunate. In Newcastle, 23 miles from the capital of Oklahoma City, John Cerny recently learned that the school attended by his five-year-old granddaughter, Adelynn, will open just four days a week next year [Reuters]. Oklahoma leads the nation in per student general state funding cuts since 2008 [Center on Budget and Policy Priorities]. Tax breaks for oil and gas production in Oklahoma continue to exceed $400 million a year [OK Policy]

Oklahoma governor signs online Internet tax proposal: Gov. Mary Fallin has signed legislation that supporters say will help the state collect more revenue from online purchases. Fallin signed legislation Tuesday that requires retailers to notify their Oklahoma customers they may owe taxes on their online purchases when filing state tax returns. Tdhe bill would also require retailers to provide Oklahomans with an annual report of how much they spent on online purchases [Associated Press].

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