By Ron Jenkins
A think-tank that advocates for the poor says Oklahoma lawmakers would have had $400 million to $600 million more to spend on education and other programs the last two years if not for income tax cuts.
The Oklahoma Policy Institute says its figures are based on average historical growth in personal income taxes over the last 15 years.
The Oklahoma City-based institute says that between fiscal year 1992 and fiscal year 2006, income taxes grew 7.5 percent. But it said those taxes grew by less than 1 percent the last two years after tax cuts enacted in 2004 and 2006 began to take effect.
Advocates of tax cuts had predicted they would spur economic development, bringing in more revenue to state coffers.
Republican legislative leaders challenged the institute’s analysis of the effect of the tax cuts, which they said aided the state economy during a national downturn.
David Blatt, director of policy for the institute, said the small growth in income taxes comes at a time when the state economy is being bolstered by high prices in the energy sector.
Matt Guillory, executive director of the institute, said legislative decisions in recent years “have squandered what could have been a real opportunity to create a better educated, healthier and more economically competitive state.”
A fact sheet released by the institute showed that the wealthiest fifth of Oklahoma households get 73 percent of the benefit from cutting the state’s top income tax rate, an annual savings of about $1,421.
The bottom 40 percent of households will get only a 3 percent benefit, a yearly savings of under $30, according to the institute’s figures.
Oklahoma Tax Commission figures show income taxes grew by 0.4 percent, or about $11 million, two years ago and by 0.1 percent, or $3.3 million, for the fiscal ending June 30.
Senate Co-President Pro Tem Glenn Coffee, R-Oklahoma City, said that despite the institute’s “what if” analysis, the fact is state income taxes are growing.
“The state income tax cuts have put more money in the pockets of taxpayers and have had a very positive impact on Oklahoma’s economy, which is faring much better than the national economy,” Coffee said.
Rep. Ken Miller, R-Edmond, House appropriations chairman, said the institute’s conclusions “do not take into account that economies are dynamic rather than static, and that cutting taxes is a fiscal stimulus.”
He said tax cuts had helped Oklahoma avoid revenue declines and budget deficits experienced by most other states.