In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to firstname.lastname@example.org.
Today on In The Know, the state’s top income tax rate will fall from 5.5 percent to 5.25 percent in 2012 unless the legislature acts to suspend the cut. The latest cut was passed in 2006 and set to be triggered when year-to-year revenue growth was at least 4 percent. OK Policy looked at how Oklahoma taxes compare with other states here, finding that even before this tax cut, the average Oklahoman pays $992 less in state and local taxes than the average American.
In a new issue brief released yesterday, the Oklahoma Policy Institute describes problems with the state’s sales tax and discusses several options for reform. The brief finds that besides damaging our ability to fund crucial state services, holes in the sales tax distort the economy and put Oklahoma businesses at a competitive disadvantage with out-of-state corporations. you can find the full issue brief here.
The Tulsa World reports that state Treasurer Ken Miller called for pension reform on Tuesday, saying Oklahoma’s current pension system is at ‘crisis level.’ A Senate committee approved a bill to overhaul the workers’ comp system. Anti-bullying legislation passed out of committee and a bill to allow teaching of creationism in public schools failed.
More below the jump.
In The News
Revenue growth triggers tax cut; Okla.’s top income tax bracket to decrease to 5.25 percent in 2012
A state board approved cutting the state’s income tax rate Tuesday after approving healthier tax collection estimates for the upcoming fiscal year. The action reduces the state’s top individual income tax rate from 5.5 percent to 5.25. The lower rate takes effect Jan. 1. The Board of Equalization, made up of several statewide elected officials, approved revenue estimates prepared by the state Tax Commission that showed legislators this year will have $106.4 million more to spend than earlier thought. December estimates put the state’s budget for the 2012 fiscal year, which starts July 1, at $6.1 billion; this month’s estimates project the budget at $6.2 billion.
Read more from this NewsOK article at http://newsok.com/oklahomas-income-tax-rate-to-decrease-to-5.25-percent-in-2012/article/3543106.
Unfair, inefficient, and bad for business: Why Oklahoma needs sales tax reform
Oklahoma’s tax system is broken. Despite a recovering economy, the state is unable to raise enough revenue to sustain core public services. The strains will only increase over time as we cope with a rapidly aging population, unfunded pension obligations, and decaying infrastructure. But inadequate revenues is not the only problem. It’s just as important that the cost of supporting government is fairly distributed and does not privilege some businesses or individuals over others without good justification. As we explain in an issue brief released today, Oklahoma’s sales tax has fallen victim to both of these problems.
Read more from the OK Policy Blog at https://okpolicy.org/unfair-inefficient-and-bad-for-business-why-oklahoma-needs-sales-tax-reform/ or find the full issue brief at https://okpolicy.org/fixing-sales-tax.
Ken Miller: Oklahoma’s public pension systems at ‘crisis level’
Oklahoma’s public pension systems are at “crisis level” because of a collective $16.5 billion unfunded liability, state Treasurer Ken Miller told members of the Oklahoma State Pension Commission on Tuesday. “Defined benefit as it has been practiced in Oklahoma is unsustainable,” said Miller, the commission’s new chairman, as board members discussed preparing a list of pension reforms for state lawmakers to consider during the legislative session that began Feb. 7. The pension panel monitors pension funding and recommends pension reform programs. A study performed for Miller’s office by Goldman Sachs Group indicated that Oklahoma ranks seventh in the nation in unfunded liability per capita. “It’s a political problem and a resource problem,” Miller said. “The solution is not going to be popular.”
Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=16&articleid=20110223_16_A8_OKLAHO839864.
Senate committee OKs workers’ comp reform
A sweeping workers compensation reform measure passed out of the Senate Judiciary Committee on Tuesday. Republican leaders have said high rates for workers compensation insurance are barriers to drawing businesses to the state. “Oklahoma’s workers compensation system is one of the most expensive, least efficient systems of its kind in the nation,” Gov. Mary Fallin said. She said the reforms in Senate Bill 878 will reduce medical and legal costs so businesses can spend money on jobs and expansion instead of litigation. … The measure ties the fee schedule for providers to the Medicare fee schedule. Oklahoma City attorney Bob Burke, an attorney for injured workers who helped craft the bill, said the cost of medical care for workers compensation claims is considerably higher than that of Medicare in some cases. … Rich Toon, a Tulsa attorney who has represented businesses but now represents injured workers, called the bill an effort to limit access to medical care.
Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=16&articleid=20110223_16_A5_CUTLIN816977.
Anti-bullying bill spurred by teen suicide closer to becoming law
Anti-bullying legislation, spurred by the May suicide of 11-year-old bullying victim Ty Field, is closer to becoming law. House Bill 1461 passed out of committee Tuesday after a 16-0 vote. Ty Field committed suicide last spring, the result of bullying said Field’s father, who has since pushed for tougher anti-bullying laws. Ty’s family is in Representative Lee Denney’s district. House Bill 1461 is her legislation. It essentially strengthens Oklahoma’s current bullying bill by requiring school districts to adopt a bullying policy that includes a procedure for reporting harassment, requires school employees to report any suspected bullying and requires annual training for school employees on bullying.
Read more from NewsOn6 at http://www.newson6.com/Global/story.asp?S=14078699.
House committee votes down bill to allow creationism into the classroom
A House committee rejected a measure Tuesday that critics said would allow creationism and intelligent design into public school classrooms. Rep. Sally Kern, the author of House Bill 1551, said her measure would allow teachers the freedom to teach without fear of losing their jobs and to teach various scientific theories. “We want to make sure all science is taught,” said Kern, R-Oklahoma City. Rep. Fred Jordan, a member of the House of Representatives Common Education Committee, said he was concerned the measure was too confusing. … The measure failed, 7-9, but it is not a final action. Kern could ask the committee to bring it up again this session or next year.
Read more from the NewsOK article at http://newsok.com/oklahoma-house-panel-votes-down-science-bill/article/3543083.
Campaign to change presidential election system targets Oklahoma
A national campaign to change the presidential election system is targeting Oklahoma and most other states with bills that would recast the Electoral College to reflect the national popular vote, rather than the popular vote in each state. “How can anybody be against every vote counts equally, and the candidate with the most votes wins?” entrepreneur Tom Golisano, the new national spokesman for the National Popular Vote campaign, said here Tuesday. The National Popular Vote effort has been active for years and successful in getting six states and the District of Columbia on board with a proposal to change the presidential Electoral College system without an amendment to the U.S. Constitution. … Oklahoma state Sen. John Sparks, D-Norman, has introduced a bill to establish Oklahoma’s membership in the agreement among the states to elect the president by national popular vote. A similar bill died in the last Legislature. In fact, the Oklahoma House passed a resolution in 2009 supporting the current system. Supporters say a national popular vote would change the dynamics of presidential campaigns, which divide the country up into battleground states and those that get little or no attention because the outcome isn’t in doubt.
Read more from this NewsOK article at http://newsok.com/campaign-to-change-presidential-election-system-targets-oklahoma-other-states/article/3543076.
Journal Record: How best to boost the ‘working poor’?
The Great Recession has badly damaged the “American dream” – the national ethos that everyone can move toward a richer and fuller life according to their work and ability, regardless of social class and circumstance. “We are moving away from shared prosperity,” said Brandon Roberts. “It is disturbing.” Roberts is lead author of a new study of “working poor” families, the nearly 1 in 3 working families who earn less than 200 percent of the official poverty threshold. These are families who do have a member working steadily, but are “hard-pressed to stay afloat in the weak economy,” he said. They are one paycheck away from major financial difficulty. … In 2008, the first year of the Great Recession, these families already represented 28.8 percent of all working families. A year later, they made up 30.1 percent – an increase of 250,000 families, Roberts said. These families numbered 45 million people, including 22 million children.
Read more from this Journal Record editorial at http://journalrecord.com/2011/02/22/francis-how-best-to-boost-the-%E2%80%98working-poor%E2%80%99-opinion/.
Quote of the Day
It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not ‘acting,’ especially given the serious economic and health-related consequences to every individual of that choice. Making a choice is an affirmative action, whether one decides to do something or not do something.
–Judge Gladys Kessler, who yesterday became the third federal judge to uphold the constitutionality of the Affordable Care Act.
Number of the Day
Number of bankruptcy filings in Oklahoma last 12 months (through September 2010)
Source: Oklahoma Policy Institute, Numbers You Need
Infographic: Tax breaks vs. budget cuts
House leaders are unfortunately restricting their proposed budget cuts for the remainder of fiscal year 2011 to nonsecurity discretionary spending in an attempt to tame a $1.3 trillion deficit. This approach is especially shortsighted since the Federal Treasury loses twice as much revenue due to tax breaks than Congress appropriates on all nonsecurity discretionary spending. The chart below compares the 10 safety-net programs slated for deep cuts with the cost of the tax breaks that should also be considered for reduction or elimination to bring the budget into balance.
Read more from the Center for American Progress at http://www.americanprogress.org/issues/2011/02/tax_breaks_infographic.html.