In The Know: Senate approves tax cut for 2015; House approves workers comp overhaul

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

Today you should know that the House approved a bill that would change Oklahoma’s workers’ compensation system from a judicial system to an administrative one. The Senate approved a bill to cut the top personal income tax rate to 5 percent in 2015. The OK Policy Blog showed why arguments that previous tax cuts in Oklahoma have led to revenue growth are easily debunked.

NewsOK writes that the flap over revolving funds doesn’t change the Department of Corrections real need for more funding. Dwindling sales tax revenue in Tulsa has spurred the city to institute a hiring freeze. A member of the state Board of Education is resigning to pursue a potential primary challenge against State Superintendent Janet Barresi. Gov. Fallin signed into law a measure that will give local school districts more leeway in determining whether disabled students have made enough progress to graduate from high school

Efforts to get a measure passed this year in Oklahoma’s Legislature to ban texting while driving have run into a dead end. Sooner Tea Party co-founder Al Gerhart — already charged with blackmail — has been accused of violating a judge’s order that required him to keep secret his testimony before a multicounty grand jury in May. The U.S. Supreme Court heard arguments on the Oklahoma-Texas water dispute. OK Policy analyst Kate Richey will give a free luncheon lecture today at the Oklahoma History Center on Oklahoma’s opportunity gap.

In today’s Policy Note, Governing reports that the U.S. Senate is on the verge of approving a sales tax for online purchases. The Number of the Day is the percentage of Oklahoma’s 342,000 veterans who are women.

In The News

House approves workers’ compensation measure

A measure hailed as historic by the state’s largest business group in its overhaul of Oklahoma’s workers’ compensation system is one legislative vote away from heading to the governor for final approval. Despite Democrats’ warning that the measure was unfair to injured workers because it would reduce their benefits, not one member of the Republican-controlled House of Representatives strayed Wednesday from their leadership’s position of supporting it. Senate Bill 1062 passed 74-24; four Democrats voted for it.

Read more from NewsOK.

Senate approves income tax cut for 2015

Gov. Mary Fallin moved a step closer Wednesday toward her goal of having a bill on her desk this year that reduces the state’s personal income tax after the Senate easily approved slashing the top rate to 5 percent. Fallin has long championed the need to reduce income taxes as a way to improve the state’s business climate and she is hoping to avoid a repeat of last year, when she and legislative leaders announced a deal on a tax cut only to see the proposal fall apart in the waning days of the legislative session. The bill approved 32-14 by the Senate, mostly along party lines with Democrats opposing it, would drop the top personal income tax rate from 5.25 percent to 5 percent starting in January 2015. A second cut to 4.85 percent would come in 2016 if state revenues continue to rise.

Read more from the Associated Press.

Tax cuts will stunt your revenue growth

Despite frequent claims by proponents of cutting or eliminating Oklahoma’s personal income tax, it is a myth that tax revenues grew because Oklahoma cut income tax rates in the mid-2000s. Their claims are based on highly selective use of data and flawed methodology that is contradicted by more careful analysis. We can trace the myth that tax cuts sparked revenue growth to last year’s study by Arthur Laffer and his colleagues for the Oklahoma Council of Public Affairs. What’s missing in the Laffer analysis is a crucial and obvious detail: the four years prior to FY 2005 included the national recession of 2001-2002, while the four years following the tax cut were ones of robust economic growth nationwide.

Read more from the OK Policy Blog.

NewsOK: Flap over revolving funds doesn’t change needs of Department of Corrections

A spat between the governor’s office and the director of the Oklahoma Department of Corrections over funding is ultimately a public relations loss for an agency that on its best day doesn’t get much love from lawmakers or the general public. DOC Director Justin Jones sought $6.4 million in additional funding to help get through this fiscal year. But meantime he had $21.9 million in three revolving accounts, which prompted Gov. Mary Fallin to fire off a letter saying the “discovery of an undisclosed $22 million” called into question DOC’s accounting practices and how it manages its money. Undisclosed? One of the funds has been on the books since 1978. Jones says all three are listed in the department’s budget every year. He has never been bashful about discussing the funds or how they’re used.

Read more from NewsOK.

Tulsa in a revenue slump

Sales tax revenue drives city finances. Out of every dollar in Tulsa’s general fund, 64 cents comes from sales and use taxes, according to the city’s most recent budget. But what drives sales tax? It’s not just spending at shopping malls. In February, the city’s sales tax revenue fell about 3 percent compared to the same month a year ago. Yet taxes collected on retail sales only declined by 0.3 percent, said Mike Kier, the city’s finance director. Kier said the city is studying reasons for the decline. However, the dwindling of dollars has already spurred a belt-tightening move, a hiring freeze — the city’s first since finances were badly wounded by the recent economic recession.

Read more from Urban Tulsa Weekly.

Oklahoma Board of Education member Joy Hofmeister resigns, eyes potential superintendent race

The only state Board of Education member from the Tulsa area resigned Wednesday, citing a possible run for the state superintendent’s seat. Joy Hofmeister, a Tulsa Republican who was appointed to the board by Gov. Mary Fallin in January 2012, submitted her resignation to Fallin effective immediately. Hofmeister is a former teacher and current president of a company that owns a local franchise of Kumon Math and Reading Centers. On numerous occasions, Hofmeister cast lone “no” votes or was in the minority in going against the recommendations of State Superintendent Janet Barresi and her administration.

Read more from the Tulsa World.

Law gives schools more discretion in graduating students with disabilities

Gov. Mary Fallin signed into law on Tuesday a measure that will give local school districts a role in determining whether the most profoundly disabled students have made enough progress to graduate from high school. The bill, authored by Republican Rep. Jadine Nollan of Sand Springs, provides an exception to the state’s high-stakes testing law for severely mentally disabled students who have individualized education program – or IEP – plans. The Achieving Classroom Excellence – or ACE – law last year began to require all Oklahoma high-schoolers to pass at least four of seven core subject tests to get a high school diploma. There were no exceptions in the law – even for students with the cognitive abilities of an infant or toddler.

Read more from the Tulsa World.

Attempts to ban texting while driving reach dead end

Efforts to get a measure passed this year in Oklahoma’s Legislature to ban texting have run into a dead end. House Republicans managed Tuesday to stymie three attempts by House Democrats to get language added to measures that would make texting while driving illegal in limited areas, such as school zones, work zones and intersections. House Minority Leader Scott Inman, D-Del City, said Tuesday’s attempts were likely the last to be made this year. Rep. Curtis McDaniel, whose bill that would have banned texting while driving didn’t get a hearing in the House of Representatives, tried again two weeks ago to outlaw the practice by filing an amendment to a bill. It failed.

Read more from NewsOK.

Sooner Tea Party co-founder accused of violating grand jury secrecy order

Sooner Tea Party co-founder Al Gerhart — already charged with blackmail — has a new legal problem. Gerhart is accused of violating a judge’s order that required him to keep secret his testimony before the state’s 13th multicounty grand jury in May. Gerhart, 54, of Oklahoma City, faces up to six months in jail and a $500 fine if found to be in indirect contempt of court. He denies wrongdoing. Making the accusation is the attorney general’s office, which advises grand jurors.

Read more from NewsOK.

U.S. Supreme Court grapples with Oklahoma-Texas water dispute

A Texas water agency is claiming an “unprecedented” right to take water from Oklahoma, but a decades-old agreement prohibits the diversion, an attorney for Oklahoma told U.S. Supreme Court justices here Tuesday. Washington attorney Lisa Blatt, who is representing Oklahoma in the dispute, said no water agreement among states has ever allowed one state to reach into another without explicit provisions that spell out all of the conditions. The attorney for the Tarrant Regional Water District, which supplies water to residents in north central Texas, told the justices that Oklahoma had agreed in the Red River Compact that Texas has a right to certain water in Oklahoma.

Read more from NewsOK.

OK Policy analyst Kate Richey speaking on Oklahoma’s opportunity gap

A free luncheon lecture entitled “Closing the Opportunity Gap: Building Equity in Oklahoma” is slated for today at the Oklahoma History Center. Kate Richey, analyst with the Oklahoma Policy Institute, a progressive think tank based in Tulsa, will speak as part of the “Practice and Policy Lecture Series” for the Office of Planning, Research and Statistics at the Oklahoma Department of Human Services. The agency sponsors the series along with the University of Oklahoma’s Center for Public Management. Richey will present data and analysis on the racial wealth gap in Oklahoma – from home and business ownership to savings, investments, and other assets vital to long-term financial security. This research points to deeply entrenched gaps in wealth, income, and employment between white and nonwhite Oklahomans.

Read more from CapitolBeatOK.

Quote of the Day

“It’s easier for them to pass because they haven’t paid for it.”

Senate Democratic Leader Sean Burrage, on the tax cut bill which does not include any changes to tax credits or exemptions and would not go into effect until 2015, so lawmakers do not have to identify what will be cut in this year’s budget.

Number of the Day

10 percent

Percentage of Oklahoma’s 342,000 veterans that are women, 2012

Source: Department of Veteran Affairs

See previous Numbers of the Day here.

Policy Note

Senate could pass online sales tax bill this week

The Senate this week could finally pass the Marketplace Fairness Act (MFA) after years of advocacy by state and local officials and retailers. On Monday, the Senate voted 74-20 to open debate on the legislation. The move comes on the heels of a non-binding March vote, in which 75 Senators voted in favor of including it in the budget resolution (a vote seen as a test to gauge support for the bill). The legislation also scored a major victory this week when the White House announced its support. If the Senate passes the legislation this year, it would mark the first time either chamber of Congress has approved collecting sales tax from online sales.

Read more from Governing.

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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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