In The Know: Panel proposes tax hike on poor and middle class to benefit the wealthiest

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 the tax reform task force recommended more cuts to the top income tax rate, partially paid for by ending broad-based tax credits relied on by hundreds of thousands of low and moderate income Oklahomans. The latest Census numbers show that the income gap between whites and non-whites in Oklahoma has grown. OK Policy previously released a fact sheet on the black-white unemployment gap, which is a major contributor to the income gap. Two Oklahoma centers for the developmentally disabled are preparing to close down because the state does not have money to repair the aging facilities.

The Tulsa Initiative Blog examines how we can move from good child care to quality early learning. $20 million in federal roads funds are at risk because Oklahoma has not complied with new safety requirements for commercial truck drivers. A study sponsored by Oklahoma and Kansas has developed a plan for expanding passenger rail service to Kansas City. House and Senate Appropriations Chairs said repairs to the Capitol building would be first in line for a bond issue this year, but they would only favor it if it went to a vote of the people.

Incidents of suicide in Tulsa have reached a record high. The DHS Commission will meet Wednesday to discuss amendments to DHS’ settlement over foster care abuses made by the Governor and legislative leaders. The nomination of Oklahoma City Assistant U.S. Attorney Arvo Mikkanen to a federal judgeship appears to be dead after the Senate refused to act. The Tulsa World discussed two good arguments for collecting online sales taxes.

The Number of the Day is the expected amount of revenue that will be collected through the state’s personal income tax next year. In today’s Policy Note, Stateline examines the new approach by the Obama administration to give states more flexibility in defining “essential benefits” that must be covered by insurance under the new health care law.

In The News

Panel recommends further slashing Okla. income tax, eliminating dozens of tax breaks

A task force said Friday that Oklahoma could reduce income tax rates for its residents and businesses by eliminating a number of tax breaks, including the personal exemptions claimed by about 1.5 million Oklahoma tax filers each year. Critics said low-income Oklahomans could suffer. The Task Force on Comprehensive Tax Reform, created by the Legislature to recommend ways to lower the state’s income tax rate and stimulate the economy, suggests Oklahoma could further reduce the state’s top income tax rate from 5.25 percent to 4.75 percent over the next two years. The corporate income tax rate could fall from 6 percent to 5 percent. But to afford the income tax cut, Oklahoma would have to eliminate 47 separate tax breaks totaling nearly $353 million, including the $1,000-per-person personal exemption claimed on many tax returns, the task force said.

Read more from the Associated Press.

See also: Task Force proposes tax hike on poor and middle class to benefit the wealthiest from the OK Policy Blog

Gap grows for income of white, nonwhites

The income gap between white and most nonwhite households grew even larger during the past decade at the national, statewide and local level, according to a Tulsa World analysis of U.S. Census Bureau figures released in December. Black, American Indian and Hispanic households all lost ground to white households in median incomes, Census figures show. One observer said the trend is indicative of the poor economy hitting minorities harder than the white population. “Unless something is done to reverse the trend and close the gap, it’s not going to get smaller,” said Kate Richey, a policy analyst for the Oklahoma Policy Institute. The growing income gap is widest between white and black households, according to Census data. Estimated median Oklahoma income in 2006-2010 was $45,992 for white households and $28,504 for black households.

Read more from The Tulsa World.

Previously: Fact Sheet: Oklahoma’s Black-White Unemployment Gap from Oklahoma Policy Institute

Two Oklahoma-run centers for the developmentally disabled start to close

DHS officials recently proposed a plan to pare down two state-run centers for the developmentally disabled in Enid and Pauls Valley. The plan is to reduce the number of residents from 245 to 120 by August 2013. Most affected would be the Pauls Valley center, where the population would be cut from 127 to 18, some relocated to Enid, but many being transitioned into other settings, including community homes. Some families and advocates are critical of the DHS plan and say their loved ones are happy and thriving in the state’s centers. Many are not convinced officials are hearing their concerns and want the centers to stay open. Most affected would be the Pauls Valley center, where the population would be cut from 127 to 18, some relocated to Enid, but many being transitioned into other settings, including community homes.

Read more from NewsOK.

How we can move from good child care to quality early learning

At Community Action Project (CAP) we provide direct services to Tulsa’s low-income families through high-quality early learning programs and programs that provide families with career, health, and financial supports. Through this work we’ve increasingly appreciated that public benefit programs are an essential support for Oklahoma’s low-income families. As a result, CAP has launched Better Benefits for Oklahoma Families, a series of assessments of Oklahoma public benefit programs. Our first issue, released in November, looks at the Child Care and Development Fund (CCDF). There’s good news about CCDF in Oklahoma but bad news as well. While Oklahoma’s CCDF system is among the more effective in the nation, service to families could be improved with minor changes.

Read more from The Tulsa Initiative Blog.

Road funds at risk over failure to comply with federal safety rule

Approximately one-third of states have indicated they may not meet a Jan. 30 deadline for their drivers’ license offices to require interstate truck drivers to provide proof from a medical professional that they are healthy enough to drive, according to the Federal Motor Carrier Safety Administration. States that fail to comply with the federal mandate could lose 5 percent of their highway funds. Under the federal requirement that kicks in Jan. 30, truck drivers are to begin submitting their medical approval forms to state licensing offices, which are to enter the information in a nationwide database that also tracks things such as invalid licenses and driving violations. Oklahoma needs to amend its law to disqualify truck drivers who fail to provide medical certificates to the state. But a wide-ranging bill that included the necessary changes was derailed this past year in the Oklahoma Senate. Oklahoma could lose nearly $20 million if it’s not in compliance with the new requirement, said Mike Patterson, deputy director of the Oklahoma Department of Transportation.

Read more from the Associated Press.

Midwest officials explore passenger rail expansion

Expanding passenger rail service through Missouri, Kansas, Oklahoma and Texas would cost the federal and state governments hundreds of millions of dollars, according to a recently released study that looked at several proposals for the region. One option it examined would provide nighttime passenger train service between Fort Worth, Texas, and Newton, Kansas. Another would establish daytime service between Fort Worth and Kansas City. The analysis released earlier this month had to be completed to apply for federal funding. Passenger rail backer Mark Corriston said Congress could agree to pay up to 80 percent of the cost under the Passenger Rail Investment Act. “The price tag isn’t much at all,” said Corriston, secretary of the Northern Flyer Alliance, a nonprofit that lobbies for passenger rail development for 65 communities between Kansas City and Fort Worth. “If you take 80 percent of the costs off the total development, which would be split between three states, it’s not a very large burden for the state to support to develop this.”

Read more from the Associated Press.

Capitol repairs first in line for bond issue

Repairs to the state Capitol would be first in line for a state bond issue, if there is going to be one next year, two key legislative committee chairmen said this week. House Appropriations and Budget Committee Chairman Earl Sears, R-Bartlesville, said a Capitol repairs bill would be the only bond issue he would push for next year, and he would only favor that idea if it were approved by a vote of the people. Senate Appropriations Committee Chairman Clark Jolley, R-Edmond, said there isn’t a lot of enthusiasm in the Legislature for any bond issue at this point, but if there is going to be one, a bill to repair the Capitol would be first in line. A state bond issue would likely have to pass through both lawmakers’ committees next year. Both said they would have strong doubt about attempting to generate more bond money for an American Indian Cultural Center in Oklahoma City.

Read more from The Tulsa World.

Suicide cases in Tulsa reach record high

The oldest was 84. The youngest was 16. Among them was a 35-year-old Kansas man who rented a gun and shot himself at an indoor gun range Oct. 3. Another was a man who piped exhaust fumes into his car with a woman who survived but succeeded in a similar attempt with another man west of Tulsa barely a month later. Eighty-eight deaths in Tulsa last year were ruled suicides by the state Medical Examiner’s Office, a record for the city, police said. It beats the previous record of 70 in 2003. The number of suicides in Tulsa had fluctuated little in the last five years, but it jumped 38 percent last year from 2010’s total of 64.  Jessica Hawkins, prevention services director for the Oklahoma Department of Mental Health and Substance Abuse Services said suicides tend to increase nationwide when the economy struggles, but Oklahomans are more at risk than residents of most other states. She pointed to risk factors like isolation in rural areas and a relative lack of mental health services.

Read more from The Tulsa World.

DHS Commission to meet Wednesday on foster care settlement amendments

The Human Services Commission will hold a special meeting at 5:30 p.m. Wednesday to discuss amendments made last week to a foster-care lawsuit settlement agreement by the Contingency Review Board.  The board–Gov. Mary Fallin, House Speaker Kris Steele and Senate President Pro Tempore Brian Bingman–emerged from an executive session Thursday to announce amendments to the settlement. Children’s Rights attorney and Executive Director Marcia Lowry said that she has not encountered a situation like the CRB’s action in previous legal actions filed by her organization. “Most particularly, what I have not had is an experience in which the Contingency Review Board is supposed to review an agreement that’s been reached between parties, and then instead of reviewing it, changes it,” said Lowey. “Now we are in the position of reviewing their changes to see whether this new creature that they have come up with is acceptable to us,” she said. “Meanwhile, we are preparing for trial, because we don’t know where this is going to wind up.”

Read more from 23rd and Lincoln.

Senate refuses to act on Oklahoman’s nomination for federal judgeship

The nomination of Oklahoma City Assistant U.S. Attorney Arvo Mikkanen to a federal judgeship appears to be dead. The Senate on Dec. 17 returned Mikkanen’s nomination to the White House without action, after it had languished since February. Mikkanen, a member of the Kiowa tribe, reportedly would have been the only American Indian to hold a federal judgeship if he’d been confirmed. But his nomination to the federal bench in Tulsa was opposed by Oklahoma Sens. Jim Inhofe and Tom Coburn, both Republicans. Coburn has never explained his opposition. A spokesman for Inhofe told the Tulsa World newspaper that the White House had failed to consult state officials before making the nomination. The White House likewise failed to secure confirmation of Cherokee Nation member Mary Smith to be the Justice Department’s Tax Division chief after the Senate twice returned her nomination.

Read more from Main Justice.

Two good arguments for collecting online sales taxes

There is growing, bipartisan support in Congress for legislation that would let states directly collect sales taxes on purchases made by their residents from online retailers. Unfortunately it hasn’t grown enough yet to make a difference. One of three bills introduced in 2011, the Marketplace Fairness Act, got a hearing in the Senate Judiciary Committee late in November but it couldn’t get a vote before lawmakers adjourned for the year. Supporters of the measure, including groups representing small businesses, promise to reintroduce it in 2012. There are two main arguments for the legislation. The first is that states and cities are being denied billions of dollars that are owed them from online retail sales. Most states, Oklahoma included, have laws that make their residents liable to pay sales or use taxes on goods that they purchase online or from catalogs of out-of-state sellers. These laws, however, are nearly impossible to enforce and widely ignored. The second argument is one of fairness. Local firms – Main Street merchants – that are required to collect and remit state and local sales taxes are at a competitive disadvantage against the online sellers who aren’t required to collect them.

Read more from The Tulsa World.

Quote of the Day

We have a culture in our state, unfortunately, that doesn’t talk about suicide.
Jessica Hawkins, prevention services director for the Oklahoma Department of Mental Health and Substance Abuse Services

Number of the Day

$2.5 billion

Expected amount of revenue that will be collected through the state’s personal income tax next year.

Source: Oklahoma Policy Institute

See previous Numbers of the Day here.

Policy Note

States gain new flexibility in setting policies under health law

A linchpin of the 2010 federal health law is the requirement that nearly everyone sign up for a health insurance plan – whether it’s Medicaid, other federally subsidized insurance, or private coverage. To make that easier to do, the law calls on states to set up health insurance exchanges where small businesses and individuals can choose the policies that best fit their needs at a price they can afford. To make sure consumers don’t buy plans with inadequate coverage, the Affordable Care Act called on the U.S. Department of Health and Human Services to define a level of coverage for “essential benefits” that must be included under any small group or individual insurance policy inside or outside an exchange. The law also said states requiring insurance companies to provide a broader range of benefits than the national standard would have to make up the cost difference for those policies. But on December 16, the Obama administration announced its intention to let states determine their own “essential benefits” for plans sold within their boundaries—rather than setting one national benefit standard. In this explainer, Stateline examines how the new approach will work.

Read more from Stateline.

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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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