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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
Statement: Eliminating the state portion of grocery sales tax isn’t the most effective way to deliver fiscal relief: For about half the cost of eliminating the state portion of the sales tax on groceries, our lawmakers can deliver targeted fiscal relief to nearly all taxpayers through the expanded Sales Tax Relief Credit. Given available options, eliminating the state portion of the sales tax on groceries is neither the most fiscally responsible way nor the most effective way to put money back in pockets of everyday Oklahomans. [OK Policy]
- From OK Policy: Modernizing the Sales Tax Relief Credit will provide a significant and targeted tax reduction to thousands of Oklahoma households
Fact check: Would Oklahomans still pay sales tax on groceries if lawmakers cut the grocery sales tax?: The most likely bills that lawmakers are considering for cutting the grocery sales tax only eliminate the state portion of the sales tax on groceries, which is 4.5 percent — or $3.83 on an $85 grocery bill. Under these measures, Oklahomans buying groceries would still be paying city sales/use taxes (up to 5.5 percent) and county sales taxes (up to 2.5 percent) depending on where they lived. Eliminating the states sales tax on groceries doesn’t mean getting rid of ALL sales taxes on groceries. [OK Policy]
Governing is finding a way to say ‘yes’ to solving problems (Capitol Update): Legislators during appropriations hearings — or in private conversations in the hallways or in their offices — hear from state agencies anxious for funding to do their jobs and to provide services to Oklahomans. The governor’s budget would lead one to believe that Oklahoma has arrived, that we are near the top on measurements of quality of life. In fact, the opposite is true — from mental health to education to health care. [Steve Lewis / Capitol Update]
Policy Matters: Living wage remains out of reach for many Oklahomans: Oklahoma leaders often brag about affordability here, but a closer look shows too many of our friends and neighbors aren’t making a livable wage. This disconnect really shows up when you consider the cost of safe, attainable housing. [Shiloh Kantz / Journal Record]
Weekly What’s That
Gross Receipts
Gross receipts are the total amount of receipts collected by state government.
The state’s gross receipts for FY 2023 were $17.4 billion, a 6.0 percent increase from FY 2022 and an all-time high, as Oklahoma’s tax collections benefited from a strong overall economy and record-high oil and gas revenues. In January 2024, the state treasurer reported total receipts for the last 12 months were $16.92 billion, a decrease of $555 million, or 3.2 percent, when comparing revenue from the previous year. This reduction is caused by declining tax revenue from oil and gas production.
Gross receipts totals are larger than both state appropriations and the state Revenue Fund, for several reasons. First, gross receipts includes sales and use taxes levied by cities and counties but collected by the Oklahoma Tax Commission. These collections are distributed to cities and counties the month after they are collected. Second, much of the state receipts are “earmarked,” or restricted by law to a specific purpose and not subject to the annual budget process. Examples include taxes that are earmarked for transportation, schools, and retirement funds. State receipts that are not earmarked – just under 50 percent of gross receipts in FY 2021 – are deposited in the General Revenue Fund.
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“We believe that that is harmful to the state budget and not helpful to everyday, working Oklahomans. A tax cut at that level will really help the wealthiest Oklahomans, not your average person who’s in that $40,000 to $50,000 range.”
-House Minority Leader Cyndi Munson (D-OKC), speaking against proposals that would cut the state’s personal income tax. [NonDoc]
Editorial of the Week
Oklahoma Attorney General Gentner Drummond’s latest move to save taxpayers from a politically based — and likely losing — lawsuit aligns with his consistent actions based on the rule of law.
Drummond has twice saved the state from a frivolous lawsuit meant as a screen for the mismanagement of federal funds by State Superintendent Ryan Walters. Drummond also advised the State Virtual School Board against approving the nation’s first taxpayer-funded private Catholic charter school, a case pushed by out-of-state interests to eliminate the separation of church and state. Additionally, Drummond seeks to intervene after the breakdown of tribal relationships after the U.S. Supreme Court’s McGirt decision.
We’ve been appreciative of Drummond’s consistent focus on his job despite occasional pushback from members of his own party. Doing what’s right over party politics is what Americans expect of their leaders. Drummond is not alone in choosing this independent, courageous path.
After prioritizing immigration since he took office in 2015, U.S. Sen. James Lankford accepted his party leadership’s request to lead a bipartisan immigration deal to secure the border. The end result contained most of the Republican demands, including some from former President Donald Trump, who nevertheless labeled it a bad deal before the language was even released. Social media misinformation quickly swept across the internet, making its way into conservative think-tanks and media.
No significant immigration legislation has been passed in at least 30 years, leading to the border mess. This was a critical moment that was tanked by the GOP congressional leaders.
At the state level, State Auditor and Inspector Cindy Byrd hasn’t been influenced by the political winds, issuing straight-forward and fair audits. She has not sped work up to beat an election deadline or shown favoritism toward any officials. Her work investigating the Epic Charter School co-founders and chief financial officer led to an attempted smear campaign against her and her staff.
Sen. Roger Thompson, R-Okemah, remains among the truest fiscal conservatives at the Legislature, keeping a sharp eye on revenue and expenditure trends. At a time when Republican lawmakers want to cut taxes, Thompson puts up a caution light as chairman of the Senate Appropriations Committee.
The state’s month-to-month revenue for the past year is down from the previous year, and energy-based revenue is inconsistent. Making tax cuts now holds potential for future revenue failures and a cratering state budget, but that truth doesn’t sit well with officials who want to campaign on tax cuts. Having Thompson’s back has been Senate President Pro Tem Greg Treat, who appointed Thompson to the committee.
In education, Reps. Mark McBride, R-Moore, as chairman of the Appropriations and Budget Subcommittee on Education, and Rhonda Baker, R-Yukon, as chair of the Common Education Committee, have been solid gatekeepers against a runaway Oklahoma State Education Department, having to go so far as to issue subpoenas to get basic information.
Sen. Adam Pugh, R-Edmond, used his position as chair of the Senate Education Committee to champion historic investments in public education and proposed this session to return the state school board to appointments from different branches of government. That measure would help remedy the problem of a rubberstamping state board.
It’s refreshing to see lawmakers put aside the political chess game to focus on the hard work of governing.
Numbers of the Day
- 98.3% – Modernizing and expanding the Sales Tax Relief Credit — an existing credit that already helps offset some sales tax costs for low-income families — would deliver 98.3% of its tax benefit to taxpayers making less than $76,000/year. [OK Policy]
- 50.2% – The percentage of renters in the Oklahoma City metro area who are considered cost-burdened, that is they spend 30-50% of their income for rent and utilities. [Joint Center for Housing Studies] | [Report: 2024 America’s Rental Housing]
- 38% – A nationwide survey of state legislators showed that 38% reported the amount of abuse they experience has increased since first taking public office, while only 16 percent reported that it has decreased. [Brennan Center for Justice]
- 12% – The percentage of Oklahoma residents of all ages who have gotten the COVID-19 bivalent booster. Only eight counties — Cleveland, Noble, Oklahoma, Tulsa, Payne, Canadian, Pottawatomie, and McIntosh — have booster vaccination rates at or above the state average. [New York Times]
- 17% – Percentage of Oklahoma households with zero net worth. The national average is 13%. [Prosperity Now]
What We’re Reading
- More tax cuts put states’ revenue at risk: At least a dozen proposals for income tax cuts that would primarily benefit wealthy residents and big companies are already on the table for state legislatures to consider in 2024 — and more are likely to come. This follows on the heels of 26 states cutting their personal income tax rates, corporate income tax rates or both between 2021 and 2023, according to the Center on Budget and Policy Priorities, a think tank that focuses on policies’ effect on lower-income people. A Center for Public Integrity investigation found last year that conservative groups funded by rich political donors pushed these tax cuts in most states, and that temporary federal pandemic aid gave legislators cover to argue that there was plenty of revenue [Center for Public Integrity]
- Half of American renters pay more than 30% of income on housing, study shows (Video): Rental prices are unaffordable for a record number of Americans with half of all renters paying more than 30 percent of their income on rent and utilities, according to Harvard’s Joint Center for Housing Studies. [PBS News Hour]
- Intimidation of State and Local Officeholders: The January 6 insurrection at the Capitol seemed to mark a new peak in extremist intimidation targeting public officials. Yet over the same period, with far less attention and often little recourse, officeholders serving in local and state government across the country have faced a barrage of intimidating abuse. Threats and attacks constrain how freely officeholders interact with constituents, narrow the spectrum of policy positions they feel safe to support, and make them less willing to continue in public service. Unaddressed, the problem stands to endanger not just individual politicians but, more broadly, the free and fair functioning of representative democracy — at every level of government. [Brennan Center for Justice]
- Do We Simply Not Care About Old People?: The COVID-19 pandemic would be a wake-up call for America, advocates for the elderly predicted: incontrovertible proof that the nation wasn’t doing enough to care for vulnerable older adults. The death toll was shocking, as were reports of chaos in nursing homes and seniors suffering from isolation, depression, untreated illness, and neglect. Around 900,000 older adults have died of COVID-19 to date, accounting for 3 of every 4 Americans who have perished in the pandemic. [KFF]
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Young Adults Are Feeling the COVID-19 Recession’s Effects Three Years Later, Especially in Communities of Color: Young adults maintained strong credit health during the COVID-19 pandemic, despite the recession in 2020. However, new Urban Institute research suggests they began experiencing increased financial distress in 2023—especially those living in communities of color. [Urban Institute]
