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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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Auto tax ruling has newly defined course of Oklahoma history (Capitol Update)

by | September 8th, 2017 | 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.

The Supreme Court ruled last week on the constitutionality of HB 2433 that, last session, removed the sales tax exemption and added a 1.25 percent sales tax on the sale of motor vehicles. Boy, was I wrong!! I would have bet the farm that the court would hold HB 2433 in violation of SQ 640 and unconstitutional. The ruling was a 5-4 decision with the opinion being written by the newest member of the Court, Justice Patrick Wyrick. If Justice Wyrick, who was one-day short of 11 years old when SQ 640 was passed by a vote of the people, does nothing else remarkable in what will probably be a lengthy tenure on the Court, he along with the four justices who joined him have newly defined the course of Oklahoma history. In fact, this decision is no less sweeping than the original passage of SQ 640 in 1992.

I read both the majority opinion and the separate minority opinions, and I still think HB 2433 should have been held unconstitutional. But guess what? If the Court made a mistake, the right to make that mistake belongs to it. This is a good time for me and those who might feel the same way to remember that reasonable minds can differ. The members of the Court, all rational people of good will, have deliberated and ruled. Now it’s time for the people and the political branches of government to work with it.

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It’s time to revisit State Question 640 (Guest Post: Rep. Marcus McEntire)

by | September 5th, 2017 | Posted in Budget, Taxes | Comments (10)

Rep. Marcus McEntire

Marcus McEntire is a freshman Republican legislator representing HD 50 (Duncan). A small business owner, he attended and graduated from the University of Oklahoma with a degree in communication studies, earned a Master of Divinity degree from Southwestern Baptist Theological Seminary, and earned a Master of Arts in Sociology from the University of Virginia.

When I was elected to the House, I knew the job would be challenging and there would be many obstacles. But at the end of my first legislative session, I realized there is a certain well-intentioned constitutional provision in place that proves to be an extraordinary hurdle to effective legislating.  

This hurdle is State Question 640, which voters approved in 1992. SQ 640 changed Oklahoma’s constitution to require either a majority vote of the people or a three-fourths majority vote in the Legislature to raise any tax.

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If lawmakers wait until regular session to fix the budget, it will already be too late

by | August 29th, 2017 | Posted in Budget, Taxes | Comments (1)

Now that the Oklahoma Supreme Court has thrown out a key part of the budget passed by lawmakers earlier this year, it’s clear the lawmakers must return to the Capitol for a special legislative session to fix the problem. Oklahoma faces a major crisis if lawmakers don’t replace the cigarette fee revenues thrown out by the court that provided more than $200 million to cover basic health care and protections for vulnerable children, seniors, and people with severe disabilities. The court has also not yet announced their decision on whether partially removing a sales tax exemption for auto sales was constitutional; if they rule that it wasn’t, another $100 million plus will disappear from the budget.

Some lawmakers and anti-tax activists have suggested that we can wait until the regular session in February to fix the problem. That’s a bad mistake for a few reasons. First, even if agencies can get by without cuts until then (which is not at all a sure thing), it would create huge uncertainty and fear among those Oklahomans who depend on the three agencies most affected by the loss of the cigarette fee. That means foster families and children, low-income seniors who rely on state nutrition sites, and people with mental illness would be living with months of anxiety over whether their services will survive.

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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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The Republican governor candidates competing for the ‘no-tax’ vote (Capitol Update)

by | June 30th, 2017 | Posted in Budget, 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.

Gary Richardson

Republican gubernatorial candidate Gary Richardson announced last week that he will file a lawsuit challenging three of the measures that produced enough revenue during the legislative session to get the Legislature adjourned by the mandated last Friday in May. I think it was a smart political move by Richardson, who is attempting to consolidate the formidable anti-tax wing of Republican primary voters behind his candidacy. In his announcement for governor last February, soon after the Legislature went into session, Richardson said, “The current budget crisis in Oklahoma proves to me that Oklahoma isn’t a poor state but a state run poorly. It’s important that the people of Oklahoma have a Governor who will make the right decisions to get our state out of this budget crisis without raising taxes.”

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Highs and lows of Oklahoma’s 2017 legislative session (Part 1)

by | June 12th, 2017 | Posted in Budget, Education, Taxes | Comments (0)

At the start of session, OK Policy laid out our top priorities in the areas of budget and taxes, health care, education, criminal justice and economic opportunity. As the session developed, we achieved some victories with good bills and helped stop even more harmful bills from becoming law. And there were plenty of disappointments in the form of promising legislation that died along the way.

Here are our staff’s recaps of the major highs and lows of the 2017 session in the issue areas where we were most deeply engaged. In part one, we share recaps of what happened with budget, tax, and education polices. In part two, we discuss what happened with health care, criminal justice, and economic opportunity policies.

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Kansas experiment yields valuable lessons (Guest post: Heidi Holliday)

by | June 9th, 2017 | Posted in Taxes | Comments (2)

Heidi Holliday

Heidi Holliday is Executive Director of the Kansas Center for Economic Growth.

You’re welcome, America. Our state, Kansas, just wrapped up a 5-year long experiment in governance from which the other 49 states can now glean some important lessons. The Kansas Legislature has voted to roll back much of the 2012 package of tax cuts that sent the state into a downward spiral of financial instability and weakened the Kansas’ public schools, universities, Medicaid program, and virtually everything else that the state funds.

With the state facing yet another budget shortfall of $900 million, government leaders decided that enough was enough. Governor Brownback, who heralded the 2012 experiment, was proposing yet more temporary band-aid approaches and more cuts deal with the shortfalls. The Legislature chose a different path and instead sent the Governor a bill that would raise more than $1.2 billion in new revenue over two years by, among other things, repealing a costly tax break for pass-through income, rebalancing individual income tax rates by reinstating a third tax bracket, and reversing course on the Governor’s plan to eliminate our state income tax. Brownback vetoed the legislation but, with bipartisan support, the House and Senate quickly overrode the veto.

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Focus on “government spending” instead of real people is leading lawmakers astray

by | May 17th, 2017 | Posted in Budget, Taxes | Comments (0)

Right now most Oklahomans are worried about how our lawmakers will fill a huge budget shortfall following years of cuts that have contributed to teachers fleeing Oklahoma classrooms, left Oklahomans with severe disabilities and children in the child welfare system at risk of losing basic protections, and created an extremely dangerous environment in prisons for both inmates and staff, among other damaging effects. State agencies large and small report having overstretched staff with stagnant wages and low morale; inability to maintain buildings and equipment; and serious struggles to maintain quality services or perform their core mission. These cuts are rippling out to threaten entire communities, especially in areas of small town and rural Oklahoma where residents have fewer local resources to make up for disinvestment by the state.

Amid all of this turmoil, the Oklahoma Council of Public Affairs is working hard to convince lawmakers that our budget problems don’t exist. In a series they’re calling the “bogus budget”, they add up all of the spending by various state agencies and argue that if the total hasn’t plummeted, we don’t need to worry about their funding.

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