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All articles by David Blatt

Supreme Court strikes a balance on State Question 640

by | September 12th, 2017 | Posted in Taxes | Comments (0)

“The purpose and intent of State Question 640 is now eviscerated…” So declared Oklahoma Chief Justice Douglas Combs in a dissent to last month’s 5-4 Supreme Court decision upholding a new state law that partially removed a tax exemption on motor vehicle sales. For former House Speaker Steve Lewis, the Court’s ruling is “no less sweeping than the original passage of SQ 640 in 1992.”

Yet this ruling came just weeks after the Court unanimously struck down a law establishing a $1.50-per-package smoking cessation fee as a violation of State Question 640. In both cases, the Legislature had passed tax-related bills without heed to the constitutional requirement, set by passage of State Question 640, that revenue bills be approved by three-quarters votes in the Legislature or by a vote of the people.

Is there a contradiction between the Court’s rulings in the two cases? And has State Question 640 now been eviscerated?  I contend that the answer to both questions is no.  The two rulings — both authored by Justice Patrick Wyrick, the Court’s newest member and the sole appointee of Governor Fallin — together strike the balance that increases in tax rates are subject to the supermajority requirements of SQ 640 while measures that remove a tax exemption are not.

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Loss of federal prevention funds will lead to more unintended teen pregnancies

by | September 11th, 2017 | Posted in Healthcare | Comments (1)

If we want to make sure every Oklahoman has the chance to become a productive, healthy adult, then preventing teen pregnancies is one of the most important things we can do. While some teen mothers and their children manage to beat the odds, giving birth before completing one’s education and being prepared to parent greatly increases the likelihood of being trapped in a cycle of misfortune.

Research finds that only about 50 percent of women who become teenage mothers earn a high school diploma by age 22 and only around 10 percent will graduate from college. Two in five mothers who give birth before age 20 are living in poverty within the first year of their child’s birth. The children of teen parents have a higher risk for low birth weight and infant mortality, have lower school achievement and more behavioral problems, and are more likely  to be incarcerated at some time during adolescence.

continue reading Loss of federal prevention funds will lead to more unintended teen pregnancies

Higher education funding cuts continue to drive up tuition and threaten college access

by | August 24th, 2017 | Posted in Education | Comments (0)

Another national report is calling attention to Oklahoma’s drastic cuts to funding for colleges and universities in recent years. At a time when a college education has never been more critical for individual prosperity and state economic development, funding decisions by Oklahoma lawmakers continue to make college less affordable and accessible.

In the decade since the Great Recession, Oklahoma has cut per pupil higher education funding by over one-third (34.0 percent) once adjusted for inflation, according to a national survey released this week by the Center for Budget and Policy Priorities, a DC-based think tank. These are the sixth deepest cuts in the nation over this period. On a per pupil basis, state funding declined by $3,294 between 2008 and 2017 in real dollars.

continue reading Higher education funding cuts continue to drive up tuition and threaten college access

With the doomsday clock ticking, how might the state’s budget emergency be solved?

by | August 14th, 2017 | Posted in Budget | Comments (3)

Last week’s Supreme Court’s ruling that struck down a $1.50 per-package smoking cessation fee passed by lawmakers in May has created a genuine state emergency. Without quick and decisive action, Oklahoma faces unimaginable cuts to health care and other protections for our state’s most vulnerable citizens. However, if they can overcome partisan differences and ideological rigidity, our leaders have an opportunity to not only resolve this crisis, but to come out of it with even stronger investments in Oklahoma families and communities.

Where We Are and How We Got Here

To recall, the Legislature approved the smoking cessation fee in the final hours of the 2017 session as part of a last-ditch effort to pass a budget that filled most of the state’s nearly $1 billion budget shortfall.  After negotiations to produce a bipartisan agreement broke down, Republican leaders gambled that the smoking cessation fee, along with the partial removal of a sales tax exemption on motor vehicles, were not subject to the Constitution’s supermajority requirements for “revenue bills” and could be passed with a simple majority using only Republican votes.

continue reading With the doomsday clock ticking, how might the state’s budget emergency be solved?

Back to work for lawmakers? It depends on the Supreme Court’s definition of a revenue bill

by | August 10th, 2017 | Posted in Budget, Taxes | Comments (0)

NOTE: This post was written prior to the Supreme Court’s decision striking down the smoking cessation fee included in SB 845. Click here for the Court’s decision. Here is the statement from the Save Our State coalition, of which OK Policy is a member.

The fate of this year’s state budget is in the hands of Oklahoma’s nine Supreme Court justices. This week, the Court heard oral arguments in challenges to four bills enacted by the Legislature earlier this year. The bills, which were intended to generate a combined $329 million needed to balance the FY 2018 budget, were passed by simple majorities in the final days of the legislative session after efforts to garner bipartisan, supermajority support for tax increases broke down. If the Court strikes down one or both of the two largest revenue measures, it would create a huge hole in a state budget that is already massively underfunded and almost certainly force Governor Fallin to call legislators back into special session.

continue reading Back to work for lawmakers? It depends on the Supreme Court’s definition of a revenue bill

Summer Rerun: Sales tax holiday is poor policy

by | August 3rd, 2017 | Posted in Blog, Taxes | Comments (0)

Photo by Paresh Gajria / CC BY-NC-SA 2.0

Note: This post originally ran in August 2016.

This weekend, many Oklahomans will flock to the stores to take advantage of the state’s annual three-day sales tax holiday weekend. Since 2007, shoppers are allowed to buy clothing items under $100 free of state and local sales tax during the first weekend in August. Many retailers report a major boost in business over the weekend that can rival Black Friday. “It will take all of our available staff to handle those three days,” said the President of Drysdale’s Western Wear in a news article last year.

Sales tax holidays are good for consumers, good for businesses, good for the economy, and good for Oklahoma, right?

Actually, no.

continue reading Summer Rerun: Sales tax holiday is poor policy

Next year’s budget starts over $400 million in the hole

by | June 6th, 2017 | Posted in Budget | Comments (0)

“hole” by Jon Rawlinson is licensed under CC BY 2.0

When Governor Mary Fallin delivered her State of the State address in February, she made a strong call for lawmakers to end the practice of balancing the state budget through the use of one-time revenues, saying:

Oklahoma will continue to struggle if we don’t fix the structural deficits of our budget… So, as our state’s top leaders, let’s focus on the REALITY of our state budget deficit. To start, for decades we have attempted to balance our budget for too long with the use of one-time resources. We cannot afford to pass another budget using a large amount of non-recurring revenue.

Governor Fallin proposed a budget that filled the hole and provided targeted funding increases without one-time revenues, but the bulk of her new recurring revenue relied on the expansion of the sales tax to nearly 150 additional services, which proved to be a total non-starter in the Legislature.

continue reading Next year’s budget starts over $400 million in the hole

Proposed budget leaves Oklahoma services massively underfunded

by | May 25th, 2017 | Posted in Budget | Comments (3)

Note: This post was updated May 28th to reflect current information. The General Appropriation bill passed the Legislature and is awaiting action from Gov. Fallin.

After months of wrangling and stalled negotiations, legislative leaders finally introduced budget bills late Tuesday evening, just three days before the deadline to adjourn legislative session. Separate House and Senate versions of the General Appropriations (GA) bill were rolled out; however, the Senate refused to consider the House version of the budget, leaving the Senate’s bill, SB 860, as the only budget moving forward.

This budget appropriates $6.863 billion for FY 2018 — almost the same amount as FY 2017 after mid-year cuts and supplemental appropriations. Compared to the FY 2009 budget of eight years ago, this budget is 3.3 percent less in nominal terms and more than 15 percent less when adjusted for inflation. After inflation, the appropriations budget has shrunk by about $1.25 billion compared to FY 2009.

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How much new revenue will ending oil and gas tax breaks bring in?

by | May 15th, 2017 | Posted in Taxes | Comments (4)

As the budget debate has intensified in recent weeks, legislators and advocates have heard dramatically different estimates of how much additional revenue could be raised by ending or reducing the special tax rate for oil and gas production. Some have claimed that ending the gross production tax break would only bring in an additional $20 million next year, while others have suggested the impact could be as high as $350 million.

A new memo prepared for OK Policy by two leading tax experts, Jerry Johnson and Michael Clingman, provides clarity to this issue. The memo explains why honest revenue estimates vary so greatly and presents solid numbers on how much additional revenue would be generated if GPT is increased to 5 percent or 7 percent on new wells. It finds that if the Legislature is willing to apply the higher rate to wells drilled prior to the law being passed, which is well within its legal authority, the state would generate from $150 million to $313 million more for next year’s budget.

Here’s a summary:

continue reading How much new revenue will ending oil and gas tax breaks bring in?

On revenue options, the right choice is “All of the Above”

by | May 10th, 2017 | Posted in Budget, Taxes | Comments (1)

With less than three weeks left in the legislative session, there is still no overall budget agreement. Facing a budget hole of close to $1 billion, a bipartisan consensus has emerged at the Capitol on the need for substantial new revenue to avert budget cuts that could have a catastrophic affect on Oklahoma communities and families. There is not yet, however, a firm consensus on which revenues to raise.

Republicans are promoting a $1.50-per-pack increase in the tobacco tax and a six-cent per gallon hike in the fuel tax. Democrats are holding out on both these measures, which require a three-fourths majority in both chambers to pass under the terms of State Question 640. Democrats are instead calling for an end to Oklahoma’s large tax break for oil and gas drilling, a change which Republicans are resisting. To attract Democratic votes, Republicans have introduced, but have not yet advanced, several revenue bills that contain aspects of the Democrats’ Restore Oklahoma budget plan. These include partly restoring the state Earned Income Tax Credit, narrowing the capital gains income tax exemption, and adopting combined corporate reporting. 

Which of these revenue measures should be approved? The right answer is “all of the above.”

continue reading On revenue options, the right choice is “All of the Above”

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