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All articles by David Blatt

Frequently asked questions about Oklahoma’s special session

by | October 10th, 2017 | Posted in Budget, Capitol Matters | Comments (7)

See this advocacy alert for more info on what you can do to influence lawmakers during special session.

Although the Oklahoma Legislature has convened numerous special sessions in recent decades, none has dealt with issues as sweeping and consequential as the current one. This set of Frequently Asked Questions is intended to help Oklahomans understand the rules guiding the process and the issues being addressed. It will be updated regularly as the session continues.

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Repeal the capital gains tax break

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

A tax break that benefits a small number of wealthy taxpayers and costs the state of Oklahoma around $100 million per year cannot “be credibly shown to have significant economic impact or a positive return on investment for the State,” according to a study presented to Oklahoma’s Incentive Evaluation Commission by a national consulting firm. Lawmakers should heed the advice of the experts and act quickly to repeal this expensive and inefficient tax break.

The study found that over the past five years, Oklahoma’s capital gains deduction has reduced state tax revenues by $474 million while creating just $9 million in additional tax revenue. “This results in a net cost to the State of $465 million,” writes PFM Group Consulting, a firm with extensive experience in evaluating tax incentives that is working under contract with the state’s Incentive Evaluation Commission. The study also found that “over the life of the program, an average of 85.5 percent of the total deduction amount was made by individuals with income equal to or more than $200,000.” By comparison, just 3 percent of all Oklahoma taxpayers make over $200,000, according to 2015 IRS data.

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It matters who we ask to pay more

by | October 4th, 2017 | Posted in Taxes | Comments (1)

As lawmakers continue to work to develop a plan to address the state’s budget crisis, the top priority has rightly been generating enough new revenue to avoid even more cuts to critical services and to fund longstanding needs like a teacher pay raise. At the same time, with tax increases on the table, we can’t lose sight of who is being asked to pay more.  A good revenue plan must also ensure that everyone is contributing their fair share.

One of the most frequently overlooked features of our state’s current tax system is that it is regressive, which means that low- and middle-income families pay substantially more of their income in state and local taxes than do wealthier families.  The median Oklahoma household with annual income between $33,000 and $53,000 pays 9.4 percent of their income in combined state and local taxes, while the wealthiest households with annual income over $176,000 pay under 6 percent, according to a 2015 analysis by the Institute on Taxation and Economic Policy (ITEP).

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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.

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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.

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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.

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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.

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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

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