OKLAHOMA CITY – Groups that work with low-income families urged lawmakers Tuesday to increase a sales-tax credit to offset the cost of groceries.
David Blatt of the Oklahoma Policy Institute, who was joined by about 20 organizations, asked the state “to take modest but important action to help struggling families buy groceries.”
The coalition, which includes AARP Oklahoma and the Community Food Bank of Eastern Oklahoma, is not calling for an end to all sales taxes on groceries, which would strip the state budget of about $300 million, Blatt said.
The groups’ proposal – to increase the income level to receive the credit – could mean a decrease of about $36 million in state revenue.
According to the coalition, the Community Food Bank of Eastern Oklahoma has seen a 42 percent increase in the number of people seeking food assistance in the first eight months of 2008, compared with a year ago.
Blatt said that if the Legislature considers giving tax credits to any group, the top priority should be given to low-income families.
“Low-income people must spend a much greater share of their income to buy groceries than do wealthier households, which is the reason that the refund was started,” he said.
The Oklahoma Tax Commission said the tax credits amount to about $34 million annually.
Blatt said this means that about 850,000 Oklahomans are claiming the credit.
“This is about one in every four individuals,” he said.
Oklahoma’s estimated 2007 population was 3.6 million.
Currently, families whose annual income is less than $50,000 receive a tax credit of $40 per individual, provided that the family unit includes either dependent children, people older than 65 or people with a disability.
The coalition would like the family-income limit to be raised to $60,000 annually.
If that proposal is not supported by the Legislature, the group is asking that the $40 tax credit per person be increased to $60, which would amount to a reduction in state tax revenue of about $19 million.
The $40 tax credit has not been changed since it was established in 1990.
Rep. Ken Miller, R-Edmond, chairman of the appropriations committee, said it is too early to tell whether projected revenue will be up when the Legislature convenes next year.
“What I am telling people is that early numbers indicate we need to approach this session with caution,” he said.