Skip to Content

What we know – and don’t know – about the revenue bill veto challenge

In late March, on the eve of an anticipated teacher walk-out, Oklahoma lawmakers approved a series of bills intended to provide pay raises for teachers, school support staff, and state employees. To pay for the raises, lawmakers approved a number of revenue measures, including HB 1010xx, which managed to overcome the three-quarter supermajority requirement for tax increases established under State Question 640.

In May, a group called Oklahoma Taxpayers Unite launched a veto referendum petition drive that, if successful, would submit HB 1010xx to a vote of the people to approve or reject the new law. This effort has been designated Repeal Petition 25 (R.P. 25); if it gets on the ballot, it will be State Question 799. On June 22nd, the Oklahoma Supreme Court struck down the referendum petition, ruling that it was misleading and fatally flawed. The organizers subsequently announced that they were abandoning the petition effort, ensuring that both the tax increases and the pay raises would take effect on schedule.

This post addresses key questions related to the veto referendum effort. Language in bold reflects the Supreme Court’s June 22nd ruling, which renders moot much of the discussion on this page.  (Last Updated: July 9th)

Continue Reading »

Unheralded law puts increased funding in doubt

by | April 18th, 2018 | Posted in Budget, Taxes | Comments (3)

Image by photosteve101/Creative Commons via flickr

Lawmakers this year have approved over half a billion in new taxes to pay for a package of spending measures, including increased pay for teachers, support staff, and state workers, and increased operating support for schools. While the new obligations are almost fully funded for the first year, in future years legislators are counting on growth revenue from an expanding economy to meet the spending commitments they’ve already made and to do more for education and other critical priorities.

But leaving economic uncertainties aside, there’s a hitch. Under a law passed quietly in 2016, several hundred million dollars could be directed automatically to a new budget reserve fund in FY 2020, rather than being available to meet funding commitments. Unless lawmakers revisit the law this session, they may find themselves facing major unexpected budget problems a year from now.

Continue Reading »

Will the teacher raise be delayed by a veto petition?

by | April 12th, 2018 | Posted in Education, Taxes | Comments (19)

Tom Coburn speaking at OK Taxpayers Unite press conference

[Note: The post has been edited to correct the information regarding HB 1024xx]

On March 28th, just hours before Oklahoma Senators were to vote on pay raises for teachers and other employees funded by new taxes, a group calling themselves “Oklahoma Taxpayers Unite” held a press conference at the State Capitol. Led by former-U.S. Senator Tom Coburn, the group warned lawmakers that they would lead a citizen initiative to overturn any tax increase. Senators disregarded the warning by approving HB 1010xx with the three-quarters support needed for revenue bills, and the Governor quickly signed the measure into law on  March 29th. But is the tax increase – the first to be approved by Oklahoma lawmakers in over 25 years – now in danger of being overturned at the ballot and dragging the pay raises down with it?

Continue Reading »

Oklahoma makes progress on collecting taxes from online sales

by | April 10th, 2018 | Posted in Taxes | Comments (0)

This session has seen the Oklahoma Legislature take a couple of important steps towards addressing the problem of untaxed online sales. These bills and reforms from earlier sessions are moving Oklahoma closer to an even playing field when it comes to taxation of online purchases versus purchases in brick-and-mortar stores. But it’s an impending decision by the U.S. Supreme Court that offers the best hope for a real and lasting solution to the problem.

Continue Reading »

The real cost of the capital gains deduction could be much more than $100 million, but we have good options for reform

by | April 5th, 2018 | Posted in Taxes | Comments (11)

Oklahoma’s capital gains deduction is the most expensive tax incentive in the state, according to reports from the Oklahoma Tax Commission. In 2015-2016, this deduction cost $105 million, and it led to an estimated $474 million in forgone tax revenues from 2010 to 2014. Despite this massive cost, economic development consultants working with the state’s Incentive Evaluation Commission (IEC) found that Oklahoma has little to no evidence that the incentive is working to boost the economy. IEC member and University of Oklahoma economist Cynthia Rogers found that two-thirds of the tax break is taken by just over 800 households with annual incomes above $1 million. 

All of that is true, and yet it actually may substantially understate both the cost of the capital gains deduction and its skewed distributional impact. The statute on Oklahoma’s capital gains deduction does allow it to be taken on corporate income. But a footnote in the Oklahoma Tax Commission’s report on tax expenditures explains that, “While some of these deductions and exemptions are available for both corporate and individual income tax filers, aggregate data for corporate filers is not available. The tax expenditure estimates in this report, for deductions and exemptions that are available for both corporate and individual filers, reflect only individual income tax due to the data limitation.”

Continue Reading »

The education funding package is a major step forward. There’s more work to do.

by | April 3rd, 2018 | Posted in Budget, Featured Budget & Tax, Taxes | Comments (3)

The Oklahoma Legislature last week passed a set of bills to provide pay raises to teachers, school support staff, and public employees funded primarily by a tax increase on tobacco, motor fuels, and gross production. Passage of the revenue bill was a truly landmark moment: it marked the first time that a major revenue bill has surpassed the three-quarters supermajority threshold for tax increases since passage of State Question 640 over a quarter-century ago, and it followed at least two years of intense but unsuccessful efforts to reach agreement on a grand bargain on the budget. More broadly, it signified a belated but clear recognition by Oklahoma lawmakers that renewed investment in education and other core services is critical for Oklahoma’s prosperity and requires significant new recurring revenue.

These bills mark a crucial step in tackling some of the state’s most urgent problems. But they in no way mark an end to the state’s budget challenges.  The new revenues fall short of fully funding new spending commitments. The state will also need additional revenue to balance this year’s budget and make greater investments in education and other needs in the future.

Continue Reading »

Bill Watch: Next week in #okleg

This week we’re launching a new weekly update to our blog that previews some of the bills we’re watching in the Oklahoma Legislature over the next week. Throughout the week, we’ll continuing sharing advocacy alerts with ways that you can take action on key bills. Although there’s always potential for surprises in the legislative process, we hope this update will help you to be better prepared and informed about these key decisions being made for our state.

Continue Reading »

Surviving measures to reform SQ 640 are a choice between bad and worse

by | March 22nd, 2018 | Posted in Taxes | Comments (0)

For a brief moment, it looked as though there might be one silver lining to the ongoing state budget crisis. Over the past two years, a majority of legislators have voted repeatedly for tax increases needed to avert budget cuts and make investments in teacher raises, health care, and other urgent priorities. In every case, the votes fell short of the three-quarters support in both chambers required to raise revenue, a provision of the state Constitution since voter passage of State Question 640 in 1992.

As we entered the 2018 session, it looked like voters might get the chance to revisit SQ 640, which had been passed by a  narrow majority (56 percent) in a low-turnout election a generation ago. A rising swell of voices from both inside and outside the Legislature acknowledged that the state’s supermajority requirement, the most stringent in the nation, has made the state ungovernable by giving a small fraction of lawmakers veto power over the will of the majority.

Continue Reading »

Oklahoma has many good options to resolve the teacher walkout

by | March 15th, 2018 | Posted in Budget, Education, Taxes | Comments (17)

The Oklahoma Education Association last week called on the Legislature to support an ambitious proposal to increase funding for public education and state services. The association, which represents nearly 40,000 teachers and school employees across the state, warned that “If the Legislature cannot fund education and core state services by the legal deadline of April 1, we are prepared to close schools and stay at the Capitol until it gets done.” The Oklahoma Public Employees Association, which is the largest group representing state employees, has announced that their members would join the teachers’ walkout on April 2nd unless lawmakers pass a significant state employee pay raise.

Oklahoma’s tax and budget policies have led to the current crisis

The threatened actions by the two associations follow years of budget cuts that have left teachers and state employees severely underpaid and the schools and agencies they work for desperately ill-equipped to do their jobs. To cite just a few examples, Oklahoma teachers have not seen an increase in the minimum salary schedule in a decade and our teachers are now the third-lowest paid in the nation. State funding for school operations is $180 million less than a decade ago, and Oklahoma schools have absorbed by far the deepest cuts in per pupil general state funding in the nation. Most state employees have gone eight to ten years without a raise; during this time, average salaries for state employees have fallen to 24 percent below the competitive labor market. State employee turnover has reached 20.5 percent, which is a nearly 40 percent increase from a decade earlier.

Continue Reading »

Despite all the complaining about SQ 640, legislators avoid votes to reform it (Capitol Update)

by | March 9th, 2018 | Posted in Capitol Updates, 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.

This past week was important in determining what legislators will be able to accomplish this session. It was the deadline for getting bills past their first committee hearing. There are plenty of ways for ideas to be resurrected during the legislative process, but if bills were intentionally not heard or defeated in their first committee assignment, it’s unlikely the idea will survive this session.

When session started I thought legislators would surely submit to a vote of the people a change in the 75 percent requirement for raising taxes by the Legislature. SQ 640, imposing this requirement, is a relic of the 1980s and 1990s when Oklahoma’s economic conditions were similar, but worse than today.

Continue Reading »

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. ...
  10. 34