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What’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.
This Week from OK Policy
Capitol Update: Bill seeking to change State Dept. of Ed. board likely no longer a threat to status quo: It looked for a while as though the state school board and the State Superintendent of Public Instruction were going to get their wings clipped a bit. With all the noise about what some view as shenanigans at the State Department of Education, it appears the board and department will stay on course for at least another year. [Steve Lewis/ OK Policy]
Policy Matters: Modernizing Sales Tax Relief Credit would help families, seniors: As state officials earnestly enter budget negotiations to close this year’s legislative session, lawmakers can find common ground on delivering tax relief to Oklahoma families and seniors by modernizing the Sales Tax Relief Credit. Updating this tax credit is the most fiscally prudent proposal floated this session to deliver targeted fiscal relief for taxpayers. It would put hundreds of dollars into the pockets of families and seniors who need it most. [Shiloh Kantz / Journal Record]
- From OK Policy: Strengthening the Grocery Tax Credit would provide fiscally smart tax relief to working Oklahomans
Weekly What’s That
Sales Tax Relief Credit
The Sales Tax Relief Credit is an income tax credit that provides a rebate of $40 per household member to households with incomes at or below the following levels:
- $50,000 per year for filers who are elderly, have a physical disability, or claim a dependent; or
- $20,000 per year for everyone else.
The credit was first enacted in 1990 as part of the legislative compromise that led to the passage of House Bill 1017 and was intended to offset the sales tax on groceries for low-income households. Eligibility for the credit was expanded in 1998 but the amount has remained frozen at $40. The credit is refundable, meaning that it can be claimed in an amount that exceeds a taxpayer’s income tax liability.
The credit was claimed by 424,294 households in Tax Year 2020 for a total of $33.6 million, according to the Oklahoma Tax Commission’s 2021-2022 Tax Expenditure Report. A total of 840,000 individuals received the credit in 2020, or roughly one-fifth of the state’s population. Over time, the number of recipients of the sales tax relief credit had been steadily declining, as incomes rose while eligibility for the credit remained flat. However, 2020 saw an increase of some 40,000 households receiving the credit compared to 2018 (385,362), which likely reflects a drop in household income associated with Covid-19. Still, there were nearly 100,000 fewer households that received the credit in 2020 compared to 2010 (520,476).
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“House Bill 4156 is flawed legislation that harms communities, separates families and weakens our economy. It fails to address the real criminal issues we face in Oklahoma – seeking a misguided sense of justice at the expense of mercy.”
-Oklahoma City Archbishop Paul Coakley, writing in a statement about how the anti-immigrant bill HB 4156 would inadvertently target men and women who are living productive lives with their families and contributing to our communities. The governor signed HB 4156 into law this week. [Archdiocese of Oklahoma City]
Editorial of the Week
Claremore Daily Progress: Homeless bill is compassionate-less
Note: This editorial was published before SB 1854 was signed into law last week.
Some clear-eyed, compassionate members of the Oklahoma House debated against a bill on the House floor this week they say will criminalize homelessness.
Senate Bill 1854 would allow law enforcement officers to arrest people found living in encampments in public spaces. These legislators claim the bill would result in misdemeanor convictions, such as a 15-day stint in jail or a $50 fine.
How can arresting, jailing and fining a homeless person be a solution?
Maybe proponents of this legislation think giving a homeless person the experience of riding across town in a patrol car and a night in jail, where they might get a shower and a square meal, is all that’s necessary to turn things around.
Think again. Layering court costs, daily jail costs and other fees upon individuals already marginalized as the result of poverty, mental illnesses, drug addiction and other issues can only compound an already untenable situation.
Are supporters thinking the flush state bank account can afford an exponential expansion of the judicial system and jails?
Rep. Forrest Bennett, D-Oklahoma City, pointed out why the bill will not work in a his statement released by the House Communications Office.
“Without a comprehensive response to homelessness, not only do we reinforce a cycle that costs taxpayers tens of thousands of dollars per unhoused person per year, we also fall short of creating a policy solution that reduces homelessness, rather than simply moving it around,” Bennett said.
Logic and good sense tells us he is right.
“When we talk about adding resources, I am talking about making smart investments,” Bennett said. “Without sufficient shelter space, without adequate resources to help get folks back on their feet, this bill will have an unintended negative impact.”
S.B. 1854 needs to be defeated, or at the least tabled for a redesign. Maybe it would be a good idea to bring a few homeless folks to the House floor and ask them for their opinion. They are, in fact, people too.
House Democratic Leader Cyndi Munson, D-Oklahoma City, had this to say: “Criminalization is not a solution. When we see folks on the side of the road, we shouldn’t look away. We should look them in the eye because that person could be your colleague, brother, or dad. Many Oklahomans are one moment away from experiencing homelessness. I ask for compassion and kindness, to put cruelty aside.”
Tulsa Rep. Regina Goodwin said, “We can read every article and do our research, but at the end of the day, we can only solve this problem by collaborating with those in need. This bill is not helpful, and it is not compassionate.”
Numbers of the Day
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$13,000 – Median household net worth for Black Oklahomans, which was the lowest in the state for all racial and ethnic groups. Their net worth was six times lower than the state average of $90,890 and nine times lower than the average for white Oklahomans ($133,550), who had the highest household net worth. [Prosperity Now]
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51.2% – In the Oklahoma City metro, the typical cost to buy a home is 51.2% higher than the typical cost to rent. This is the 18th highest buy-to-rent ratio among nation’s 50 largest metros. [Bankrate]
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51.2% – In the Oklahoma City metro, the typical cost to buy a home is 51.2% higher than the typical cost to rent. This is the 18th highest buy-to-rent ratio among nation’s 50 largest metros. [Bankrate]
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39% – Percentage of Black homeownership in Oklahoma, compared to 70.1% for whites, 61.7% for American Indian/Alaska Natives, and 53.6% for Hispanic/Latinos. [Prosperity Now]
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34 – Number of years since lawmakers have adjusted Oklahoma’s Sales Tax Relief Credit, which is a $40 tax credit focusing on helping low- and moderate-income Oklahomans. [OK Policy]
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$16 – Estimated buying power in 2024 for Oklahoma’s Sales Tax Relief Credit, which was set at $40 per person in 1990 and has not been adjusted since. The Sales Tax Relief Credit was created to deliver targeted fiscal relief to low- and moderate-income Oklahoma taxpayers. [OK Policy]
What We’re Reading
- Black Women Best Framework Points the Way to Equitable and Just State Tax Reform: States and localities can realize more equitable, thriving economies by proactively addressing the historical marginalization and persistent exploitation of Black women through their revenue policies. State tax policy is not race-neutral but rather functions as a support system that upholds whiteness in politics and prosperity. Applying the Black Women Best framework — an economic principle that argues that policymaking to address the economic well-being of Black women can consequently improve economic conditions for everyone — would allow policymakers to address harms for those who have been historically excluded while promoting widespread opportunity and prosperity for all. [Center for Budget and Policy Priorities]
- How Housing Costs Drive Levels of Homelessness: An analysis of rent prices and homelessness in American cities demonstrates the strong connection between the two: homelessness is high in urban areas where rents are high, and homelessness rises when rents rise. A large body of academic research has consistently found that homelessness in an area is driven by housing costs, whether expressed in terms of rents, rent-to-income ratios, price-to-income ratios, or home prices. Further, changes in rents precipitate changes in rates of homelessness: homelessness increases when rents rise by amounts that low-income households cannot afford. [Pew Research]
- Tax History Matters: A Q&A with Professor Andrew Kahrl, Author of ‘The Black Tax’: Property taxes are the backbone of local governments, generating approximately three in four local tax dollars nationwide. Property taxes have historically been regarded as a relatively stable and broad-based funding source, but flawed tax administration practices, state constraints, and certain policy decisions contribute to their regressivity. In his new book, “The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America,” Professor Andrew Kahrl walks readers through the history of the property tax system and its structural defects that have led to widespread discrimination against Black Americans. [Institute on Taxation and Economic Policy]
- Violent Crime Is Falling Nationwide — Here’s How We Know: Preliminary FBI data, however imperfect, confirms a sharp downward trend in crime, undercutting attempts to blame criminal justice reform for pandemic-era spikes in violence. [Brennan Center for Justice]
- Corporate Taxes Before and After the Trump Tax Law: Following the implementation of the tax changes signed into law in 2017 by President Trump, the vast majority of the nation’s largest corporations saw substantial tax reductions. The 296 companies in the Fortune 500 and S&P 500 that were consistently profitable from 2013 to 2021, and for which U.S. profits and federal income taxes are disclosed, collectively saw the share of their profits that they paid in tax drop from 22.0 to 12.8 percent. While these corporations’ profits grew by 44 percent, their federal tax bills dropped by 16 percent. [Institute on Taxation and Economic Policy]
