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Taxing services shouldn’t be all or nothing

by | February 27th, 2017 | Posted in Taxes | Comments (0)

A centerpiece of Gov. Mary Fallin’s FY 2018 Executive Budget is her proposal to expand the sales tax base on services. As she explained in her State of the State address:

“As the economy in the United States has shifted from a manufacturing-based economy to a services-based economy, the way we impose taxes and collect revenue no longer reflects the current economy, but an outdated system that has not changed much since its inception.”

The Governor’s proposal, which is set out in detail in this spreadsheet, would expand the sales tax to all 164 services that are currently untaxed in Oklahoma. Based on current taxable sales, the sales tax expansion is projected to generate $940 million in new revenue in FY 2018, of which $840 million would be available for appropriation. Under the Governor’s budget plan, this additional revenue, along with increases in the cigarette tax and motor fuel taxes, would be enough to make up the state’s budget shortfall and allow for the elimination of the sales tax on groceries and the corporate income tax.  The tax would raise an additional $648 million for cities and $121 million for counties.

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In The Know: Tulsa jailers blocked nurse from giving dying inmate water

by | February 27th, 2017 | 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.

Check out OK Policy’s resources for the Legislative session, including the Legislative Primer and Online Budget Guide.

Today In The News

Tulsa jailers blocked nurse from giving dying inmate water: Ten hours after Williams entered holding cell No. 10, an inmate wheeled a gurney across the deserted booking area, past the doors Williams traveled through earlier that day. Minutes later, jail staff emerged from the cell pushing Williams on the gurney, paralyzed from a broken neck. Williams died from complications of a broken neck and showed signs of dehydration, a medical examiner’s report states. A 12-minute video recorded during his last days alive depicts him lying on the floor of a cell while detention staff tossed trays of food at his feet and placed a cup of water out of reach. One juror wiped tears from her eyes as the jury watched Williams attempt to dip his fingers into the cup of water. [The Frontier]

Seven things to know about SQ 780, 781: For more than a decade, Oklahoma has seen some of the highest rates of residents going to prison, many of whom are incarcerated for nonviolent crimes. Since 1991, Oklahoma has had the highest female incarceration rate per capita in the United States. Oklahoma also has the second highest imprisonment rate in the country, 78 percent higher than the national average in 2015. Additionally, Oklahoma incarcerates more black people per capita than any other state in the country. And more than half of the offenders in the Oklahoma Department of Corrections population have either a history of mental illness or current symptoms. [NewsOK]

Major Oklahoma school funding source in danger of being exhausted: Years ago, lawmakers set up a dedicated school funding source that was meant to operate outside of the politically motivated appropriations process. But as Oklahoma’s economy continues to flounder, the usually consistent source of school money has shown it’s at risk, too. The 1017 Fund automatically receives money directly from sales and income taxes. Other money comes from specialty license plate fees, some gaming revenue and tobacco sales. There’s also a cash reserve for when times get tough, but this year’s drop in overall state revenue will wipe that out, budget officials said last week. [NewsOK]

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The Weekly Wonk: Key takeaways from the Board of Equalization; the solution we need on criminal justice; and more

by | February 26th, 2017 | 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, Executive Director David Blatt shared takeaways from the February Board of Equalization meeting on the blog and in a Facebook Live video. In his Journal Record column, Blatt argued that Legislative promises to curb tax breaks for wind production to balance the budget are unwilling to confront the tax break that’s most responsible for our budget troubles. Blatt also explained why a bill before the Legislature could clarify how various taxes affect different parts of the population. Steve Lewis’s Capitol Update discussed the politics of raising revenues, and Policy Analyst Ryan Gentzler wrote that criminal justice reforms presented by the Justice Reform Tax Force could be the solution the state needs.

In a guest post, Sabine Brown described how her husband, a doctor, was virtually uninsurable prior to the Affordable Care Act because he’d had cancer as a child. On the Together OK blog, Kara Joy McKee explained how you can get involved. We shared our Oklahoma Advocacy Toolkit, including our Advocacy Alerts page, our Bill Tracker, Policy Priorities, and more. 

OK Policy in the News

This week, Rep. Perryman (D-Chickasha) cited OK Policy data in an op-ed arguing for rolling back income tax cuts. The Editorial Board of the Pryor Daily Times used OK Policy data writing in favor of criminal justice reform legislation. NewsOK used OK Policy data in a piece on oil and gas production taxation and regulation. NonDoc quoted Blatt in a roundup of predatory lending legislation. KTUL used OK Policy data discussing the effect of lottery funds on education funding. Our blog post about why the lottery didn’t fix education funding before is available here. The Enid News & Eagle cited OK Policy data when sharing the effect budget cuts on local schools

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The politics of revenue raising matters for health care and teachers (Capitol Update)

by | February 24th, 2017 | Posted in Budget, Capitol Updates, Education, Healthcare | Comments (1)

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.

There are couple of big issues starting their trek through the legislative process, and the way they ultimately get handled will affect the state’s long-range structural challenges. The first challenge concerns raising the cigarette tax and dedicating the proceeds to health care agencies. In the last several years, legislative and executive leaders have blamed the general revenue shortfall on too many revenue sources being taken “off the top” for some specific purpose, thus never reaching the general revenue fund.

The current cigarette tax proposal increases the tax by $1.50 per pack and specifically directs where the money must be spent. This is the same as taking it off the top. The only difference is the revenue goes to the general revenue fund, but it is required by law to be spent for a specific purpose. This limits the flexibility of future legislatures to appropriate the money where it may be more urgently needed without changing the law.

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In The Know: Department of Education facing over $50 million in budget cuts

by | February 24th, 2017 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-r elated 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.

Check out OK Policy’s resources for the Legislative session, including our Legislative Primer and Online Budget Guide.

Today In The News

Department of Education facing over $50 million in budget cuts: Funding for education in Oklahoma took another hit as the State Board of Education revealed several shortfalls in their projected budget. During its regularly scheduled meeting Feb. 23, the board revealed that the Education Reform Revolving Fund was $39 million short. Added to $11.1 million in cuts the State Board of Equalization announced on Tuesday, the education department must now cut over $50 million from its budget [FOX25]. Where should I start? How about by telling you what these cuts mean to one district with 14,300 students [okeducationtruths]. However you count it, Oklahoma’s per pupil education funding is way down [OK Policy].

Department of Corrections announces hiring freeze after state revenue failure: While the state is facing another revenue failure, an Oklahoma agency says it is implementing a hiring freeze to deal with the potential cuts to funding. Earlier this week, the Oklahoma Board of Equalization confirmed a revenue failure in the state after learning about an $878 million shortfall. On Thursday, the Oklahoma Department of Corrections announced a hiring freeze that is effective immediately for the majority of the agency [KFOR]. Even with positive and important criminal justice reforms passing in the Legislature and in the ballot box last year, the Oklahoma prison population is on track to grow by 25 percent – about 7,200 inmates – in the next ten years [OK Policy].

Dishonest politicians attack voter decisions to ease prison costs and overcrowding: In November, voters overwhelmingly approved State Questions 780 and 781 because they know Oklahoma incarcerates too many nonviolent, low-level offenders. …Voters in November loudly and clearly approved these significant reforms for our criminal justice system. The changes take effect in July but, unfortunately, this legislative session has already seen misguided efforts by legislators to gut the voter’s wishes before they even take effect [Kris Steele / Tulsa World].  HB 1482 would ignore the evidence and the will of the voters by reinstating felony charges for drug possession across virtually all of Oklahoma City and Tulsa and large parts of the rest of the state [OK Policy]. 

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Budget Update: Key takeaways from the February Board of Equalization meeting

by | February 23rd, 2017 | Posted in Budget, Taxes | Comments (0)

The State Board of Equalization met on February 21st to approve revised revenue estimates for FY 2017 and FY 2018. This estimate will be binding on the Legislature as it develops the FY 2018 budget over the coming months.

Here are our main takeaways from the new certification:

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In The Know: Oklahoma Senate panel OKs repeal of income tax cut trigger

by | February 23rd, 2017 | 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.

Check out OK Policy’s resources for the Legislative session, including our Legislative Primer and Online Budget Guide.

Today In The News

Oklahoma Senate panel OKs repeal of income tax cut trigger: An Oklahoma Senate committee has approved legislation to repeal the trigger for a cut in the state’s individual income tax rate. The Senate Appropriations Committee on Wednesday voted 32-4 for the bill [SB 170] and sent it to the full Senate for a vote. Legislation passed in 2014 provided a mechanism to reduce Oklahoma’s top tax rate from 5 percent to 4.85 percent when tax collections increase by about $100 million annually, enough to cover the cost of the tax cut [Associated Press]. Halting the next tax cut is one of our 2017 Legislative priorities [OK Policy].

Ongoing budget collapse is destroying the foundations of state government: For the second consecutive year, the state budget has failed. Tax receipts clearly won’t be enough to fully fund the spending plan approved by the Legislature last year, the state Equalization Board learned Tuesday. That triggered $34.6 million in across-the-board state budget cuts to put the budget back in balance [Editorial Board / Tulsa World].

Don’t Reverse Voters’ Will on Criminal Justice Reform: Oppose HB 1482: Last year Oklahomans voted by a large margin to approve SQ 780, which changed drug possession charges from felonies to misdemeanors punishable by no more than 1 year in jail. Voters also approved SQ 781 to direct the savings from reduced incarceration into county mental health and addiction treatment. Oklahoma voters’ choice aligns with plentiful research and experience showing felony charges and incarceration are costly and ineffective… HB 1482 would ignore the evidence and the will of the voters by reinstating felony charges for drug possession across virtually all of Oklahoma City and Tulsa and large parts of the rest of the state [OK Policy]. We formally endorsed the State Question HB 1482 would undo [OK Policy].

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Justice Reform Task Force recommendations could be the solution Oklahoma desperately needs

by | February 22nd, 2017 | Posted in Criminal Justice | Comments (1)

Photo used under a Creative Commons license.

Just before the start of the legislative session, the Justice Reform Task Force released a report that details the crisis in our state’s corrections system and recommends policy changes to deal with the crisis in a safe and effective manner. If passed and implemented, their proposals could be the solution that Oklahoma’s criminal justice system desperately needs to support the rehabilitation of people convicted of crimes and relieve a prison system that’s bursting at the seams. Positive reforms made it through the Legislature and through the ballot box last year, and the Task Force recommendations show us how to build on that success.

In previewing the Task Force, we pointed at the budgetary constraints facing the committee and speculated that they might look at reforms that were passed in 2012 but implemented poorly; modify or eliminate sentencing enhancements; expand geriatric and medical parole; and establish incentives for agencies to divert offenders away from prison. Their 27 recommendations, many of which are legislative proposals for 2017, incorporate some of these ideas but go much further, addressing the front door, the back door, and the trap door of incarceration.

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In The Know: Oklahoma Faces Another Revenue Failure, Agencies To See Mid-Year Budget Cuts

by | February 22nd, 2017 | 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 Faces Another Revenue Failure, Agencies To See Mid-Year Budget Cuts: The Oklahoma Board of Equalization declared a revenue failure for the current fiscal year, which will result in mid-year appropriations cuts to state agencies. State agencies will receive across board cuts of 0.7 percent between March and June of this year. In total, agencies will be cut by $34.6 million. Preston Doerflinger, the Director and Secretary of Finance, Administration and Information Technology, said the situation is dire and more revenue is needed. “I need you, members, I beg you to have an appreciation for the seriousness of the situation we have before us,” Doerflinger told the board members [KOSU]. Public schools are bracing for additional cuts [NewsOn6].

Will Oklahoma pass the cigarette tax bill? Maybe, leaders say: The level of support for a bill that would raise Oklahoma’s cigarette tax by $1.50 per pack changes every day, leading to concerns about the future of funding for state health services, leaders say. House Bill 1841, authored by Rep. Leslie Osborn, R-Mustang, would provide more than $200 million in cigarette tax money for several health-related state agencies. The bill passed 17-10 out of the House appropriations and budget committee Feb. 13 and awaits a vote in the full House [NewsOK]. Legislators are divided on the issue [Woodward News].

Economic calamity awaits if we fail to act: In this young legislative session, we have witnessed a polarization in the executive branch. Gov. Mary Fallin’s call to recast our archaic 20th-century tax code for the 21st century was bold. The $1 billion in proposed new taxes went too far, and frightened our citizens and business community. In a theatrical move to signal his political opposition, Lt. Gov. Todd Lamb quit the cabinet offering no alternative plan for tackling the real budget mess we face. Do we cut or invest? I’m a pragmatist. I believe the answer is in the middle [Rep. Leslie Osborn / NewsOK].

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Even doctors depend on the Affordable Care Act (Guest post: Sabine Brown)

by | February 21st, 2017 | Posted in Healthcare | Comments (1)

Sabine Brown is a political activist, physician assistant, and mother of two.

One in three Oklahomans have a pre-existing condition that could have been used to deny them health insurance coverage prior to the passage of the Affordable Care Act (ACA). My husband, Eric, is one of those Oklahomans.

When my husband was a small child, he was diagnosed with Burkitt’s lymphoma. He was treated at St. Jude’s hospital in Memphis. Although his treatments and back and forth trips from Oklahoma City were rough, he has good memories of the staff that took care of him. One memory that stuck with him is a doctor who wrote an order for him to have pizza every day when that was the only food he would tolerate during chemotherapy treatments. The experience ultimately inspired him to become a doctor himself.

Eric started medical school in 2003, which coincided with the time he could no longer be on his parent’s insurance plan. He started filling our applications for private insurance. The rejections letters rolled in. No one would accept him because of his previous cancer diagnosis.

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