In The Know: House won't hear tax cut agreement, unveils another new proposal

In The KnowIn 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 You can sign up here to receive In The Know by e-mail.

Today you should know that House won’t support the tax cut agreement reached with the Senate and Governor and has offered another new proposal, leaving open the possibility that a tax cut may not be approved before the Legislature adjourns Friday. OK Policy released a statement on the newest House plan. David Blatt writes in The Journal Record that Oklahoma’s state and local taxes already fail the fairness test, and lawmakers’ tax cut plans would make them even more unfair. Dr. Steve Ellis writes in the OK Policy Blog that The Wall Street Journal reveals the intellectual bankruptcy of the tax-cut case.

Bonds for state Capitol repairs and the American Indian Cultural Center failed to get approval. A $20 million bond for the Oklahoma Museum of Popular Culture in Tulsa is still alive but faces an uncertain future in the House. The Oklahoman writes that cuts to the state’s EDGE fund have killed a program that was creating Oklahoma jobs. StateImpact Oklahoma profiles a program to provide job training and reduce recidivism among inmates, which has been significantly reduced by budget cuts. The OK Policy Blog previously discussed how Oklahoma is putting counterproductive restrictions on employment for ex-felons.

EMSA’s board voted to pursue a possible investigative audit of the agency through the state Auditor and Inspector’s Office. A new report finds Oklahoma has the sixth highest rate of injury deaths in the U.S. The Number of the Day is the proportion of older Oklahomans for whom Social Security is their only source of income. In today’s Policy Note, Robert Reich explains why fairness is essential to growth.

In The News

House won’t hear tax cut agreement, unveils another new proposal

A plan supported by the governor and legislative leaders to slash Oklahoma’s top income tax rate disintegrated in the House on Wednesday, leaving open the possibility that a tax cut may not be approved before the Legislature adjourns Friday. House Speaker Kris Steele acknowledged there weren’t enough House Republicans willing to support the proposal after an analysis by the Oklahoma Tax Commission showed it would actually increase the tax liability for an estimated 24 percent of tax filers. Instead, Steele and House leaders unveiled an entirely new proposal that would slash the state’s top income tax rate from 5.25 percent to 4.5 percent over ten years, beginning in 2014, if certain revenue growth triggers are met. Senate President Pro Tem Brian Bingman said the House proposal will not be considered in the Senate and that if the House refuses to take up the brokered proposal, there may not be a tax cut approved this year. A spokesman for Gov. Mary Fallin said she has not endorsed the House plan and is calling on House leaders to put the original proposal up for a vote.

Read more from The Associated Press.

See also: STATEMENT: Latest tax plan is desperate effort that hasn’t been thought through from Oklahoma Policy Institute

David Blatt: A question of fairness

Imagine three Oklahoma families. One earns $20,000 a year, another $60,000, and the third $250,000. Which family is likely to be paying more of its income in state and local taxes? The answer may surprise and dismay you: The family earning $20,000 is likely paying the highest share, the one earning $250,000 the lowest share. In tax policy terms, state and local taxes are regressive. In everyday language, they’re unfair – and they will get even more unfair if the Legislature goes through with a tax cut that will primarily benefit high earners. Sales and excise taxes are the main culprits of the current system’s regressive state. Lower-income households spend a much higher share of their income on taxable goods – such as groceries, clothing and appliances – than wealthier households, which are able to put more into savings and investments. Oklahoma’s combined state and local sales tax rates are among the highest in the nation.

Read more from The Journal Record.

Steve Ellis: Income tax opponents offer nothing new in the Wall Street Journal

The Oklahoma income tax ‘wars’ have gone national! The latest salvo was fired last week by the Wall Street Journal in an editorial urging Oklahoma to enact major income tax cuts. While the editorial offers nothing new (except for a high level of snark), it is worth noticing because it reveals the intellectual bankruptcy of the tax-cut case. Populist, anti-intellectual posturing? Check. Appeal to ‘good sense’? Check. Failure to engage with the substance of the assessment? Check. The Wall-Street-Journal approach is seriously harmful. Intuition and casual observation are good starting points for economic analysis, but they are merely that – places to begin. To rest satisfied with such weak support when further quality evidence is already available would be deeply irresponsible. State economies are complex systems. To suppose you can diagnose one with an ‘eyeball test’ is hubris.

Read more from the OK Policy Blog.

Bonds for Capitol repairs, American Indian Cultural Center fail; OKPOP museum bond still alive

A $20 million bond issue for the Oklahoma Museum of Popular Culture in the Brady District in Tulsa won narrow approval in the state Senate on Wednesday but faces an uncertain future in the House. A $200 million bond proposal for the Capitol complex went down in flames in the House on Wednesday while another bond issue, $40 million for the American Indian Cultural Center and Museum in Oklahoma City, narrowly failed in the Senate. The Tulsa bond issue, Senate Bill 1989, can’t be heard in the House until Friday, the final day of the legislative session, said John Estus, a spokesman for House Speaker Kris Steele, R-Shawnee. The Tulsa museum bond issue passed the Senate by a vote of 25-22. Oklahoma Historical Society Executive Director Bob Blackburn said he knows the OKPOP, as it’s generally called, will be a tough sell in the House but thinks the carefully detailed business plan and presentation made to legislators may put it over the top.

Read more from The Tulsa World.

EDGE Fund’s demise a blow to Oklahoma’s tech sector

After just six years Oklahoma’s EDGE fund is apparently gone for good, a victim of what we see a lot at the Legislature — patchwork repairs instead of any real long-term planning. EDGE stands for Economic Development Generating Excellence. The original idea in 2003 was for the state to create a $1 billion endowment for research and high-tech development projects that would turn Oklahoma into the “Research Capital of the Plains.” Using interest earned on the initial investment, the EDGE oversight board the past four years has awarded grants totaling $29.4 million to 17 high-tech entities that are all still in business — no small feat in a field where failure is common. Grant winners had to survive an exhaustive vetting process, a rarity where government dollars are concerned. The jobs created stayed in Oklahoma. There was a lot to like about EDGE.

Read more from NewsOK.

Locked up but looking ahead: Employment after prison

Being tough on crime is expensive. It costs Oklahoma taxpayers about $20,000 a year to pay for the housing of each inmate in the state’s overcrowded prison system, Department of Corrections data show. But being tough on crime can also mean giving criminals a chance at having a life on the outside. At the large, open machine shop in the minimum-security facility McLeod Correctional Center near Atoka, workers are hunched over drill presses and milling stations, jotting notes on blueprints. But every couple of hours, the motors die down and everyone lines up for a head count. Then it’s right back to work. Here, inmates approaching release are getting hands on experience in welding, farming, construction and machining.

Read more from StateImpact Oklahoma.

Previously: Get a job: Why restricting employment for ex-felons is counterproductive from the OK Policy Blog

EMSA Board votes to seek state audit

EMSA’s board voted Wednesday to pursue a possible investigative audit through the state Auditor and Inspector’s Office, with board members agreeing the move would help restore trust in the agency. Ed Shadid, an EMSA trustee and Oklahoma City city councilor, said he preferred an audit by the state over a private firm because the state auditor would have authority to follow the investigation wherever it leads. The Emergency Medical Services Authority is a government agency that supervises a contractor providing ambulance service to more than 1.1 million people statewide. In Tulsa, Oklahoma City and surrounding cities, residents pay a monthly fee to receive emergency ambulance service.

Read more from NewsOK.

Oklahoma had sixth highest rate of injury deaths in U.S.

In a new report, The Facts Hurt: A State-By-State Injury Prevention Policy Report, Oklahoma had the sixth highest rate of injury-related deaths for Americans with 83 per 100,000 people suffering injury fatalities. Overall, the national rate is 57.9 per 100,000. The total lifetime medical costs due to fatal injury in Oklahoma were $25.1 million. The Facts Hurt report, released today by the Trust for America’s Health (TFAH) and the Robert Wood Johnson Foundation (RWJF), concludes that millions of injuries could be prevented each year if more states adopted additional research-based injury prevention policies, and if programs were fully implemented and enforced. Oklahoma scored five out of 10 on key indicators of steps states can take to prevent injuries – nationally, 24 states scored a five or lower.

Read more from the Trust for America’s Health.

Quote of the Day

We’ve closed several campuses around the state that, frankly, we just didn’t have the money to continue operating. We were located at Alva, new facility up there. We had a plumbing program, an electrical program up there. We had a great deal of success with those young offenders up there. And they’re gone.

-Jim Meek, superintendent of the Skills Centers, which provides job training for inmates that reduces recidivism and gives them a better chance at life on the outside. Much of the program has been lost to state budget cuts.

Number of the Day

1 in 3

Proportion of older Oklahomans for whom Social Security is their only source of income, 2009

Source: AARP

See previous Numbers of the Day here.

Policy Note

Why fairness is essential to growth

Fairness isn’t inconsistent with growth; it’s essential to it. The only way the economy can grow and create more jobs is if prosperity is more widely shared. The key reason why the recovery is so anemic is so much income and wealth are now concentrated at the top is America’s the vast middle class no longer has the purchasing power necessary to boost the economy. The richest 1 percent of Americans save about half their incomes, while most of the rest of us save between 6 and 10 percent. That shouldn’t be surprising. Being rich means you already have most of what you want and need. That second yacht isn’t nearly as exciting as was the first. It follows that when, as now, the top 1 percent rakes in more than 20 percent of total income — at least twice the share it had 30 years ago — there’s insufficient demand for all the goods and services the economy is capable of producing at or near full employment. And without demand, the economy doesn’t grow or generate nearly enough jobs.

Read more from Robert Reich.

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Gene Perry worked for OK Policy from 2011 to 2019. He is a native Oklahoman and a citizen of the Cherokee Nation. He graduated from the University of Oklahoma with a B.A. in history and an M.A. in journalism.

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