Religious, nonprofit leaders urge lawmakers not to cut tax credits for Oklahoma’s neediest families (Red Dirt Report)

OKLAHOMA CITY – Oklahoma religious and nonprofit organizations and foundations gathered Wednesday to plead with Oklahoma lawmakers to save tax credits for working families and senior citizens.

While no official legislation has been filed as of Wednesday to cut Oklahoma Earned Income Tax Credit, Sales Tax Relief Credit or Child Tax Credit, many feel the legislature will consider those cuts as early as Thursday to help manage the massive shortfall in the state’s budget.

A plan being circulated by state legislators would end the Child Tax Credit and significantly reduce the Earned Income Tax Credit and Sales Tax Relief Credit, for a combined cut of about $76 million. A couple with two children earning $35,000 a year could pay $180 more per year under this proposal.

The tax increase on low- and moderate-income families would take effect at the same time as lawmakers are allowing a tax cut for top incomes that cost more than twice as much ($147 million), according to estimates by the Oklahoma Tax Commission, according to information provided by the coalition.

A recent poll by Global Strategy Group found that 59 percent of registered Oklahoma voters oppose ending the broad-based tax credits to reduce Oklahoma’s $1.3 billion budget shortfall, compared to just 29 percent who support doing so. Voters instead preferred solutions like accepting federal dollars for health care, improving collection of online sales taxes, and rolling back some of Oklahoma’s cuts to the income tax rate paid by the wealthiest households.

More than 140 religious leaders and more than two dozen nonprofit organizations signed a letter urging lawmakers to not reduce the tax credits that they say support more than 400,000 low- to moderate-income families.

“Our legislature has a moral imperative to do the right thing for not just the citizens who need it most, but for all of Oklahoma,” said Rev. Ray Douglas of Greater Mount Olive Baptist Church of Oklahoma.

A $1.3 billion budget shortfall for the fiscal year that begins July 1 is due, in part, to declining oil prices, increased tax credits and cuts to the state income tax rate. A new .25 rate cut went into effect Jan. 1, added to the already dire financial situation in the state.

“Now is not the time to cut back these tax credits,” said Effie Craven, state advocacy and policy director for the Regional Food Bank of Oklahoma. “Our state legislature is considering eliminating the tax credits that benefit those who need it the worst. One in six Oklahomans face hunger issues and 16 percent live at the poverty level.”

Craven said the tax credit cuts would devastate families that struggle to make ends meet.

Others urged lawmakers to consider the fate of children in Oklahoma. Terry Smith, executive director of the Oklahoma Institute for Child Advocacy, said a quarter of a million children in Oklahoma live in poverty and that the tax credits in question can make a difference in families making ends meet.

“Oklahoma is 37th in child wellbeing and we need to invest in our children, not make it worse for them.”

Many accused the state legislature of trying to balance the budget on the backs of Oklahoma’s most vulnerable families.

“We are not looking at an insignificant amount of money for families,” said David Blatt, executive director of the Oklahoma Policy Institute. “Families could lose $200 from the Sales Tax Relief Credit, $200 from the Earned Income Tax Credit and $100 for the Child Tax Credit. That’s hundreds of dollars cut from families who can least afford it.”

According to the Oklahoma Policy Institute, legislators have other options they could consider to help stabilize the budget, including assessing a surcharge of 6 percent on income over $200,000 or 7 percent on income over $400,000. Oklahoma has cut the income tax by more than $1 billion since 2004 with a big chunk of cuts going to high-income households.

Legislation that would have ended “double-dipping” for tax credits failed to advance in the legislature, but ending double deduction was part of Gov. Fallin’s FY 17 budget proposal.

“We oppose any measure that would eliminate tax credits for working families,” said Blatt, who urged citizens to contact legislators to ask them to oppose any cuts to working families.

The legislature may consider the measures Thursday.

http://www.reddirtreport.com/red-dirt-news/religious-nonprofit-leaders-urge-lawmakers-not-cut-tax-credits-oklahomas-neediest