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Today you should know that Republicans in the House and Senate unveiled two plans to cut the top income tax rate in future years, triggered by revenue increases. The OK Policy Blog previously explained why tax cut triggers are reckless. OSU economic professor Kent Olson discussed how lawmakers scheduling tax cuts for future years have helped them avoid accountability for the budget cuts that result. David Blatt’s Journal Record column explained why state leaders should stop shrugging off Oklahoma’s budget shortfall.
The U.S. Consumer Financial Protection Bureau is suing a for-profit college chain with branches in Oklahoma over predatory student lending practices. An labor group is seeking to increase the minimum wage in Oklahoma City, but state lawmakers are pushing a bill (SB 1023) that would make it illegal to increase minimum wage above the statewide level. A measure to allow counties to impose a severance tax for mining limestone and sand is gaining ground in the House.
A House Committee defeated a bill (HB 3398) that would have allowed state education funding to go to private and home school vouchers [Correction: The bill would not have allowed vouchers to go to home school expenses.]. A bill passed out of committee that would reduce interest charges to oil and gas companies that are delinquent on royalty payments, at a cost of $7 million from Oklahoma education. The Oklahoma City Council voted to require tornado-resistant safe rooms in all new school buildings. The okeducationtruths blog contrasted The Oklahoman’s and The Tulsa World’s treatment of controversies around high-stakes testing in Oklahoma schools.
A House panel voted to abolish the Calendar Committee established by TW Shannon. A bill to impose term limits county office holders in Oklahoma died in committee, but a similar bill is still active. The Number of the Day is how much the tax cuts put in place from 2005-2012 will reduce income tax revenue in 2015. In today’s Policy Note, Bloomberg discusses the sweeping, bipartisan movement to reduce mandatory minimum sentences for federal drug crimes.
In The News
Legislators unveil tax cut plans with revenue triggers
Oklahoma Republican legislative leaders unveiled new proposals on Wednesday to cut the state’s income tax, but not until certain levels of revenue growth are reached. Separate House and Senate bills were released Wednesday to reduce Oklahoma’s top personal income tax rate from 5.25 percent to 5 percent, a longtime but elusive goal of Republican Gov. Mary Fallin and GOP legislative leaders.
Read more from The Associated Press.
See also: The terrible thing about triggers from the OK Policy Blog
Let’s have full accountability for tax cut (Guest Post: Kent Olson)
Over the past decade, the Oklahoma legislature enacted several measures that reduced the top bracket rate of the individual income tax from 7 percent to 5.25 percent, and more cuts of this type have been proposed. These tax cuts, both those from the past and those proposed, are back-loaded; they’re tax cuts that create revenue losses that occur largely in the future. In Oklahoma, back-loaded tax cuts are likely to result in back-loaded spending cuts, as well.
Read more from the OK Policy Blog.
Prosperity Policy: What me worry?
Oklahoma’s grim budget outlook got even grimmer last week when the state was presented with revised budget numbers for next year. As a result of unexpected weakness in corporate income tax collections, the state will have $188 million less to spend next year compared to this year. Preston Doerflinger, who serves as finance secretary and the governor’s main budget negotiator, didn’t seem unduly worried by looming shortfalls and budget cuts. Before we all adopt Doerflinger’s pose of carefree confidence, a couple of reminders are in order.
Read more from The Journal Record.
Federal watchdog agency sues for-profit college chain in Oklahoma
A for-profit college chain with branches in Oklahoma is accused of predatory student lending practices in a lawsuit filed Wednesday in U.S. District Court in Indianapolis. The Consumer Financial Protection Bureau filed the lawsuit against ITT Educational Services Inc., alleging ITT exploited its students and pushed them into high-cost private student loans that were likely to end in default. The bureau is seeking restitution for victims, a civil fine and an injunction against the company. The company, based in Carmel, Ind., has more than 135 colleges in 39 states, including the ITT Technical Institute branches in Oklahoma City and Tulsa.
OKC labor group wants to raise the minimum wage, but proposed bill would make it illegal
An Oklahoma labor group wants to raise the minimum wage in Oklahoma City, but a bill in the Oklahoma Senate could make that process difficult. Right now, Oklahoma’s minimum wage is $7.25 an hour. Senate Bill 1023 would make it illegal for any “municipality or other political subdivision” of the state to raise the minimum wage in Oklahoma. Tulsa Senator Dan Newberry wrote the bill which is co-sponsored by recently-elected House Speaker Jeff Hickman.
Effort to allow new tax on mining companies gains ground in House
This isn’t the first legislative session some Oklahoma lawmakers are pushing for a severance tax for mining limestone and sand, but it’s the first time the idea has gotten this far. On Monday, the House Appropriations and Budget Committee passed HB1876, which would allow up to a five percent tax on the production of limestone, sand, and other aggregates. It now moves to the full house for consideration. But there are several caveats.
Read more from StateImpact Oklahoma.
House Committee defeats school voucher bill
HB 3398, by Rep. Jason Nelson, R-Oklahoma City, would have set up “savings accounts” with the state Department of Education for qualifying students. The accounts would have received up to 90 percent of the per pupil allowance from the state education funding formula, with those funds to be applied to private education. Some opponents argued that the receiving schools would not be subject to the same oversight as public schools. The bill lost 14-8.
Read more from the Tulsa World.
Senator says hurting school funding wasn’t his intention
A bill that could cost Oklahoma public schools and higher education institutions millions of dollars in lost revenue linked to delinquent oil and gas royalty payments cleared the state Senate Appropriations Committee on Wednesday after the bill’s author said financially harming schools was not his purpose. As written, Senate Bill 1966 would cut from 12 percent to about 3 percent the interest payments that oil and gas companies must make to the state Commissioners of the Land Office when those companies are delinquent in making royalty payments.
Oklahoma City Council votes to require safe rooms in new school buildings
Overriding a Building Code Commission recommendation, the Oklahoma City Council voted Tuesday to require safe rooms in new school buildings. The measure will require a new school building to have tornado-resistant spaces with at least enough room to protect the number of children and teachers for which the building was designed. The Building Code Commission had recommended safe room construction decisions be left to school boards.
Reading sufficiency: A tale of two papers
The Oklahoman made a splash again this morning with the editorial, Conspiracies, anecdotes no substitute for analysis. To politicians, anecdotes are the gold standard. Without them, we wouldn’t have the Merry Christmas Bill, the Pop Tart Gun Bill, or so many more of the fabulous entries into our state’s legislative record. Just think back to any presidential debate from the past 20 years. Every candidate has cherry-picked someone’s tale of woe and made it the symbol of what’s wrong with this country. In this case, however, I’m siding with the politician. I have seen the increase in anxiety. I have seen the students crying after their benchmark tests. I have seen teachers whipped into a frenzy over the fear that in spite all their efforts, a student will have a bad test day and they won’t have the documentation to promote the child anyway.
Read more from okeducationtruths.
House panel approves committee’s abolishment
A House panel has approved a resolution by newly elected Republican House Speaker Jeff Hickman to abolish a committee established by his predecessor. Members of the House Rules Committee voted 7-0 on Wednesday for the resolution to abolish a Calendar Committee that was created last session by former House Speaker T.W. Shannon to approve all bills before they could be heard on the floor. Shannon suggested last year the committee would allow an open, bipartisan approach to scheduling bills for a floor vote, but critics said it was an additional unnecessary step.
County term limit bill dies; another awaits action in the Legislature
A bill to limit Oklahoma county office holders to 16 years in office died in the House Rules Committee on Wednesday after failing to draw support from a single member. However, another bill that would limit county office holders to 12 years in office was passed out of the House Committee on Government Modernization on Monday and is awaiting action by the full House. State Sen. Harold Wright, R-Weatherford, spoke against term limits for county officers, saying that in sparsely populated counties it is hard enough to find people willing to serve as county elected officials even without term limits.
Quote of the Day
Years ago, I often heard companies say the cost of doing business was their No. 1 concern. During my time in the Tulsa Regional Chamber and now as secretary of state, I am increasingly hearing from employers who say that an educated workforce, supported by strong public education, is the most important factor in deciding where to locate or expand.
-Secretary of State Chris Benge (Source: http://bit.ly/1mIIqhR)
Number of the Day
$826 million
How much the tax cuts put in place from 2005-2012 will reduce income tax revenue in 2015.
Source: Projection by OSU Economics Professor Kent Olson
See previous Numbers of the Day here.
Policy Note
Mandatory Minimum Madness
While almost no one was looking, Congress has embarked upon the most sweeping overhaul of the U.S. criminal justice system in three decades. What’s more, Republicans are working with Democrats, and in general agreement with the White House. The cause that has united this alternate-universe Congress is sentencing reform, specifically the reduction of mandatory minimum sentences for drug traffickers. Senate legislation that would do so isn’t perfect, but it’s a worthwhile bill that has a good chance to become law, and deserves to.
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