OKPOLICY.ORG
House Minority Leader Rep. Cyndi Munson, D-Oklahoma City, has requested an interim study this year aimed at examining the benefits of modernizing the state Sales Tax Relief Credit. The credit allows individual income tax filers with an annual gross household income not exceeding $20,000 to file for a tax credit of $40. (The income limit is $50,000 per year for filers who are elderly, have a physical disability, or claim a dependent.) The credit is meant to help low-income workers partially offset the sales tax paid during the year.
“Gross household income” is defined as the gross amount of income of every type, regardless of the source, received by all persons occupying the same household. When the credit was first passed in 1990, the maximum limit was set at $12,000. Although the household income limit has since been raised to $20,000, the $40 credit has remained the same since 1990.
Rep. Munson wants to look at the benefits of expanding eligibility and raising the amount of the credit for middle and low-income Oklahomans.
The Sales Tax Relief Credit, now having been in effect for 33 years, has an interesting history. Today it is just a section in the state tax code that gives a tiny tax credit to low-income Oklahomans. But in 1990, it was the key to passage of House Bill 1017, the reform and revenue act that, among other things, lowered classroom sizes, mandated a core curriculum, mandated kindergarten for the first time, started the four-year-old early childhood program, and gave teachers a pay increase for five years in a row.
Among the revenue measures in HB 1017 was a one-half cent increase in the state sales tax.
On February 13, 1990, after HB 1017 with the emergency clause had passed the House of Representatives, it was brought to a floor vote in the State Senate. The vote was 25 “yes,” 23 “no,” the exact number required for passage. But the vote on the emergency was held over to try to obtain the necessary 32 votes for passage.
Two months later, the emergency was brought to a floor vote on April 11, 1990, but the emergency failed by five votes: 27 “yes,” 20 “no,” and 1 “excused.” Three days later, on Saturday, April 14, 1990, Oklahoma Education Association President Kyle Dahlem called for a statewide work stoppage of teachers in Oklahoma. On the following Monday, 8,000 teachers rallied at the Capitol, shutting down 145 school districts in the state.
The next day, Tuesday, April 17, the number of teachers picketing the Capitol grew to 10,000. Other teachers stayed home and demonstrated in their communities. Groups of students organized and called on the legislature to act. On Wednesday, April 18, 18,000 teachers arrived at the Capitol despite cold, blustery, and rainy weather.
The miserable weather helped the teachers’ cause because it forced them inside the Capitol for warmth during lunchtime and for breaks from their picketing, singing, and chanting. They were shoulder to shoulder with Senators in the hallways and offices. By Thursday, April 19, the last day of the legislative week, the demonstration reached 20,000 strong, and it was clear the teachers were not leaving.
On April 19, the Democratic Senators, who held a super majority at the time, caucused and after an emotional five-hour meeting with thousands of teachers outside the capitol and milling in the hallways, an agreement was reached that produced five Democratic votes for the emergency clause. The agreement that brought the five emergency clause votes for HB 1017 was passage of the Sales Tax Relief Tax Credit allowing low-income Oklahomans the opportunity to file for a refund on the half cent sales tax increase that was part of the bill.
The Senate returned to session that day for final passage of the bill and the emergency. Sen. Olin Branstetter, R-Ponca City, was the lone Republican voting with 31 Democrats for the emergency to reach the magic number of 32. The bill was on its way to Republican Gov. Henry Bellmon who had called the special session to address “an emergency in education funding” nine months earlier.
The following week, as agreed, the legislature passed the Sales Tax Relief Tax Credit and Gov. Bellmon signed it. Much has changed since those days. The 33-year-old $40 credit does seem a bit dated.
