Bill Watch: Ways to help Oklahoma families build wealth this legislative session

This post is the first in a series highlighting key bills in several issues areas that we’re following. 

Last session, working families saw little in the way of help from the Legislature.  As the budget crisis continued, core services suffered further cuts and teachers and state employees did not see the raises that many legislators promised would be a priority. Too many Oklahomans are still struggling with financial instability, but there are opportunities for the legislature to make some strides this session.

We identified several goals related to economic opportunity and security in OK Policy’s 2018 legislative policy priorities. Here are some key bills related to those goals:

Strengthen tax credits to boost working families

Our tax code provides many breaks for high-income individuals and businesses, but just three tax credits are designed to help low- and moderate-income families. Yet in recent years, these credits have been frequently targeted for cuts or elimination. In 2016 lawmakers slashed the Earned Income Tax Credit (EITC) for over 200,000 working Oklahoma families by making the credit “non-refundable,” which means it no longer helps families who work and pay sales, property, and payroll taxes but don’t earn enough to pay state income taxes. Making the EITC refundable again has been added to the Step Up plan,as HB 1037XX, and we expect it to be heard on the House floor early this week.  This welcome change to the plan would allow working families to again receive the full benefit of the credit.

In addition to this progress on the EITC, HB 2949 by Rep. Carol Bush (R-Tulsa) would increase the Sales Tax Relief Credit and expand its eligibility. Currently, households making less than $20,000 – or $50,000 for seniors, the disabled, and families with dependent children – may claim a tax credit of $40 per person to offset the cost of sales tax paid on necessary items like groceries and basic household needs. Rep. Bush’s bill would increase the credit to $60 per person and allow additional households to claim a partial credit.  Households with income between $20,000 and $30,000 – or $50,000 and $60,000 for seniors, the disabled, and families with dependent children – would be able to claim half the credit. This small expansion would go a long way for families struggling with basic expenses.

Require paid leave benefits

Access to paid time off is a crucial benefit for working families, but it’s one that too many Oklahomans don’t enjoy. Last session, two bills (HB 1310 and HB 1536) that would require paid sick leave for Oklahoma workers were introduced but never considered. Those bills are still active and eligible for consideration this year. Paid family leave is also on the table this session. HB 3213 would create a paid family leave program for benefits-eligible state workers that would cover time off to care for a new child or a seriously ill parent or spouse. All of these bills are smart, proven ways to protect workers, families, and public health.

Remove barriers to work

Occupational licensing received quite a bit of attention last year as the Governor’s task force gathered information and made recommendations. Given the task force’s work, it’s surprising that few of their recommendations are making an appearance in legislation this year. The exception is HB 2894, which would require licensing boards and agencies to adopt targeted criminal background restrictions for licensing rather than continue the current trend of prohibiting anyone with a criminal background from obtaining a license.  This would greatly improve the ability of those with a felony in their past to re-enter the workforce and avoid recidivism.

Less promising are two bills that aim to improve occupational licensing but end up doing some other counterproductive things as well.  SB 1174 and SB 1475 — identical bills both called the Freedom to Work Act — do have some positive proposals.  They waive initial licensing fees for low-income applicants, military families, and young workers. Like HB 2894, they also require targeted criminal background restrictions rather than broad prohibitions. But in with these positive steps is a not-so-healthy dose of preemption: both bills prohibit local governments from making any new licensing laws or exceeding state standards in licensing, charging more than $25 per year in fees, or adopting a minimum wage that is higher than the state minimum (something they are already prohibited from doing by existing law). Limiting the ability of local governments to effectively govern within their jurisdictions will not fix an occupational licensing system that over-burdens low- and moderate-income Oklahomans. These bills do very little to reduce the real cost of getting an occupational license in Oklahoma.

Protect the financial future of Oklahomans

Making sure business is done in a fair and reasonable manner is also an important protection for Oklahomans, and there are a handful of bills with that aim this session. HB 2538 would prohibit auto insurance companies from raising rates simply because a customer has become divorced or widowed. Insurance companies are currently allowed to use marital status as a factor when determining what you will pay, meaning single drivers are often charged more than their married counterparts.

The predatory loan industry is also under scrutiny this session. They were treated quite favorably last session with the passage of HB 1913, a bill that would have expanded the industry in Oklahoma. Luckily, that bill was vetoed by Gov. Fallin, and now legislators have opportunities this session to reevaluate their support for this harmful industry. SB 1572 would allow us to better understand how the payday loan industry operates in Oklahoma by making quarterly reports on usage rates and fees available to the public. These reports do not contain any individually identifying information and are an important tool for understanding a controversial industry that has been allowed to operate legally in our state — to the financial harm of many working Oklahomans — since 2004.

Another positive measure, HB 2915, would prohibit payday lenders from keeping a borrower in debt for more than 90 days per year and require a 24 hour cooling off period between loans. This bill would limit the ability of predatory lenders to trap borrowers in an endless cycle of debt and would make a great difference in lives of many Oklahomans currently struggling to escape the grasp of the predatory loan industry.

Opportunities are there if legislators will seize them

Low-income families have gotten the short end of the stick in recent legislative sessions, seeing their tax credits shrink and little effort made to protect their financial interests. Legislators will have several chances this session to correct those mistakes and improve the lives and financial futures of Oklahoma families – all they have to do is step up and take those chances.