In The Know: State leaders discuss further reducing income tax, acknowledge need for caution

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 at a forum sponsored by the State Chamber, Gov. Fallin and Republican leaders expressed a desire to further reduce Oklahoma’s income tax, but said lawmakers need to proceed with caution before slashing the source of one-third of Oklahoma’s budget. The Tulsa World writes that the latest State Treasurer report highlights the need for preserving the income tax. For more in the income tax debate, see OK Policy’s tax reform information page.

On the OK Policy Blog, we discuss a new report showing how large corporations avoid state taxes. The state is awarding up to $9 million to a debt collection company that is the successor to one that went bankrupt under a cloud of fraud allegations in 1998. Unemployment in October rose in 71 of 77 state counties, but overall employment is also rising. OK Policy analyst Kate Richey writes in the OK Gazette that even though the job market in Oklahoma is considerably better than most other states, the employment situation for African-Americans remains bleak.

StateImpactOK maps out poverty in Oklahoma, which is at a 10-year high. A surge in the number of Tulsa area Hispanics aged 1 year and younger is being felt in the Tulsa County Head Start program. OU and OSU medical school officials are concerned about a growing doctor shortage in Oklahoma. The state’s bed breeder licensing agency will seek to require breeders to have all dogs or cats checked by a veterinarian and receive a certificate that each animal is healthy before they can be sold.

The Number of the Day is the amount of sulfur dioxide (SO2) emitted annually by the three oldest coal-fired power plants in Oklahoma. In today’s Policy Note, the American Medical Association reports that most states are creating their own health insurance exchanges, but Oklahoma is among a few that will instead rely on a national exchange to be administered by federal health officials.

In The News

State leaders discuss further reducing Oklahoma income tax, acknowledge need for caution

Gov. Mary Fallin and Republican leaders on Wednesday expressed a desire to further reduce Oklahoma’s income tax rate, but told a group of business chiefs that lawmakers need to proceed with caution before slashing the source of about one-third of the money legislators spend each year. Fallin, Senate President Pro Tem Brian Bingman and House Speaker Kris Steele each discussed a goal of further reductions to the state’s top income tax rate during a forum sponsored by the State Chamber. As Republicans slowly increased their control in the Legislature, the state’s top rate has gradually been reduced over the last five years from 6.25 percent to 5.25 percent, beginning in the 2012 tax year. Bingman, the former mayor of Sapulpa, said he would consider reducing the state’s income tax over time, but he cautioned that placing more of an emphasis on sales taxes to meet funding needs could threaten the primary source of revenue for cities and towns.

Read more from the Associated Press.

For more on the income tax debate, see OK Policy’s tax reform information page.

Treasurer report shows importance of income tax

The Oklahoma economy appears to be heading into a happy holiday season, State Treasurer Ken Miller reported recently with the release of the state’s monthly gross receipts report. And while the economic news continues to be good, that could change in coming years if a contingent of state leaders gets its way and does away with the personal income tax. Miller’s report graphically demonstrates just how important that revenue source is to preserving essential state functions. Miller reported that November collections were 13.2 percent higher than the prior November. Personal income tax collections were $236.81 million, up $34.71 million or 17.2 percent from the prior year.

Read more from The Tulsa World.

Report tracks how large corporations avoid state taxes

A comprehensive new study finds that many consistently profitable companies are paying little to no corporate income taxes on those profits. Out of 265 Fortune 500 companies examined, 68 managed to pay no state income tax in at least one out of the last three years, despite making almost $117 billion in pretax profits in those no-tax years. These are among the findings in “Corporate Tax Dodging In the Fifty States, 2008-2010,” by the Institute on Taxation and Economic Policy (ITEP) and Citizens for Tax Justice (CTJ). They find that 20 companies, including the Oklahoma natural gas giant Chesapeake Energy, averaged a tax rate of zero or less during the 2008-2010 period. Of the Oklahoma-based corporations examined in the report, Chesapeake Energy paid an effective tax rate of -2.1 percent from 2008-2010, Devon Energy paid 0.6 percent, Williams paid 1.0 percent, and OneOK paid 1.1 percent. Oklahoma’s corporate income tax rate is 6 percent.

Read more from the OK Policy Blog.

Firm owned by previously indicted businessman gets $9 million in state money from Quality Jobs program

The state of Oklahoma may gamble up to $9 million to create 500 jobs to resurrect a Tulsa-based, debt collection company identical in its origins to one which closed under a cloud of fraud allegations and ultimate bankruptcy in 1998. In a press release Tuesday, the Oklahoma Department of Commerce proclaimed it was handing CFS II (CFS or Commercial Financial Services in its first incarnation) up to $9 million to help underwrite a 500-employee payroll. The original CFS employed nearly 4,000 in Tulsa and at a Shepherd Mall Oklahoma City location. But it was employees who were among those who paid the price in the company’s sudden 1998 demise and ultimate bankruptcy. Owners Bill Bartmann and Jay Jones were both indicted by a grand jury but only Jones was convicted of a crime. He was sentenced to five years in prison for conspiracy. Bartmann went on to become a self-proclaimed advocate of debt collection reform and re-opened his company.

Read more from CapitolBeatOK.

Unemployment rises in most Oklahoma counties

The jobless rate in Oklahoma City’s metropolitan area rose to 5.8 percent in October, from 5.5 percent in September and 5 percent in August, but is down from 6.3 percent this time last year, the Oklahoma Employment Security Commission reported Tuesday. Unemployment in October rose in 71 of 77 state counties, as well as in Oklahoma City, Tulsa and Lawton. But gains in employment — and more people in the workforce — more than offset those dips, say the agency’s staff economist and others. In Tulsa, October unemployment was 6.6 percent. A year ago, unemployment in Tulsa was 7.5 percent. In Lawton, it is at 6.8 percent, a 0.2 percent increase from this time last year. But overall employment is rising along with unemployment, so the report isn’t discouraging, experts say.

Read more from NewsOK.

Race and joblessness

The job market in Oklahoma is considerably better than in most other states, but its employment situation remains bleak for African-Americans. The unemployment rate for black workers in Oklahoma City last year was nearly 13 percent, almost double the rate for the city’s white workers. Statewide, black workers are unemployed at about twice the rate of white workers; they also stay unemployed longer and are more likely to be working part-time because they couldn’t find a full-time job. Much of the gap is driven by exceptionally high unemployment rates among black men, which is about two and half times that of their white counterparts. In fact, black unemployment is significantly higher than that of whites at all levels of educational attainment.

Read more from the OK Gazette.

Mapped: An overview of poverty in Oklahoma

Poverty in Oklahoma is at a 10-year high, according U.S. Census Bureau estimates released last week. More than 610,000 Oklahomans lived below the poverty line in 2010. Poverty in Oklahoma reached a high in 2006, dipped in 2007 and 2008, and started climbing again in 2009, the data show. A family of four is considered poor if the household earned less than $22,500 in 2010. Oklahoma’s poverty level in 2010 — 16.8 percent — is a hair higher than the 16.7 percent peak estimated in 2006. One-tenth of a percentage point seems small, but it represents tens of thousands Oklahomans.

Read more from StateImpactOK.

Census figures show surge in Hispanic infants, 1-year-olds

Both a baby boom and bust have been occurring over the past decade in Tulsa and the surrounding region. The number of Tulsa County’s youngest Hispanics, those 1 year old and younger, has nearly doubled to 3,775 since 2000, according to a Tulsa World analysis of U.S. Census Bureau data. Meanwhile, the number of non-Hispanic infants and 1-year-olds in Tulsa County shrank by 6 percent during that same 10-year period of 2000 to 2010. Put another way, in 2000, one in 10 Tulsa County residents ages 1 year and younger were Hispanic, according to census figures. By 2010, one in five infants and 1-year-olds in Tulsa County were Hispanic. And with more than one in three Hispanic children in the state living in poverty, according to census figures, the rapidly changing demographic has been especially felt at the Tulsa County Head Start program.

Read more from the Tulsa World.

OU and OSU officials concerned about doctor shortage in state

Oklahoma is facing a shortage of doctors, and University of Oklahoma and Oklahoma State University officials say things only will get worse unless steps are taken to address the problem. Citing an aging physician workforce and a growing pool of Medicaid patients, officials from the OU School of Community Medicine and the OSU Center for Health Sciences say the state needs to ramp up efforts to recruit and train more doctors to meet the needs of underserved areas, particularly in rural Oklahoma. A New England Journal of Medicine article ranks Oklahoma as the state that faces the most challenges in meeting medical needs. That ranking is based on the ratio of Medicaid expansion to primary care capacity.

Read more from NewsOK.

Pet breeders agency seeks to require health checks before dogs, cats can be sold

Requiring pet breeders to have all dogs or cats be checked by a veterinarian and receive a certificate that each animal is healthy before they can be sold is a new rule being sought by the state agency charged with regulating breeders. “There should be some veterinary examination of the animal to say that he’s healthy,” said Angel Soriano, chairman of the state Board of Commercial Pet Breeders. “We have a huge complaint base … where people call … and say this dog was sick. When we start investigating, there was no health record at all.” A public hearing on the rule change is scheduled for Jan. 17, board members decided Tuesday night.

Read more from NewsOK.

Quote of the Day

Research tells us, for children to be proficient in English, they have to have a good foundation in their home language. So it is incumbent upon us to nurture that home language so children can make a solid transition to English.
Cecilia Robinson, senior director of early childhood programs at Community Action Project, which is experiencing a surge in enrollment of Hispanics.

Number of the Day

61,000 tons

Amount of sulfur dioxide (SO2) emitted annually by the three oldest coal-fired power plants in Oklahoma, currently out of compliance with the Clean Air Act.  SOis a toxic gas that is known to affect lung function when inhaled.

Source: Environmental Protection Agency

See previous Numbers of the Day here.

Policy Note

Most states forming health insurance exchanges

Although a majority of states are creating their own health insurance exchanges, a few other states explicitly have declined to create their own exchanges and instead will rely on a national exchange to be administered by federal health officials. The Dept. of Health and Human Services announced Nov. 29 that 29 states have made significant progress toward creating health insurance exchanges under the national health system reform law. The exchanges will serve a key role in the health reform law’s expansion of coverage to an additional 30 million people, split about equally between private health plans and Medicaid. These tasks include selecting private health plans to be offered in the exchanges and guiding consumers seeking to enroll in coverage. Thirteen states have adopted legislation to create an exchange. However, other states are content to allow federal health officials to take over the work of creating an exchange. Kansas and Oklahoma returned their planning grants because lawmakers were concerned that the grants would commit the states to an undetermined amount of future health spending.

Read more from the American Medical Association.

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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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