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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
A Better Path Forward: A Budget and Tax Roadmap for Oklahoma: A Better Path Forward is a comprehensive report from the Oklahoma Policy Institute detailing how the state cut nearly a quarter of the state’s budget capacity and the implications of those decisions. More importantly, the report includes a menu of budget and tax reforms that can provide vital state revenue while bringing more fairness to the state’s tax system. [Oklahoma Policy Institute]
- A Better Path Forward: Report Release and Conversation [OK Policy / YouTube]
Policy Matters: Finding a better path forward: Anyone who follows Oklahoma government knows our state revenue is extremely susceptible to boom and bust cycles. A volatile revenue base, combined with decades of tax cuts by lawmakers, has left Oklahoma ill-prepared to deliver essential shared services to its residents. Our friends and neighbors who are feeling the greatest impact — and comparatively carrying the largest share of tax burden — are the ones who can least afford it. [Ahniwake Rose / The Journal Record]
Interim study examines teacher pay (Capitol Update): In the wake of an alarming teacher shortage in Oklahoma, there was an interim study last week in the Senate Appropriations committee requested by Sen. David Bullard, R-Durant. The purpose of the study was to look at “qualitative pay” for teachers. [Steve Lewis / Capitol Update]
Weekly What’s That
Sales Tax Relief Credit
The Sales Tax Relief Credit, sometimes known as the “grocery tax 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 never been increased.
The credit was claimed by 385,362 households in FY 2018 for a total of $1.2 million, according to the Oklahoma Tax Commission’s Tax Expenditure Report. Some 780,000 Oklahomans received the credit in 2018, or roughly one-fifthof the state’s population. However, over time, as incomes rise while eligibility for the credit remains flat, the number of recipients of the sales tax relief credit has been declining. The credit is refundable, meaning that it can be claimed in an amount that exceeds a taxpayer’s tax liability.
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“Our current tax structure also requires low- and middle-class taxpayers to pay a higher portion of their income than wealthier Oklahomans. These tax policy choices contribute to and perpetuate inequities based on race, ethnicity, gender and location, making it harder for historically marginalized groups to catch up and get ahead. But it doesn’t have to be this way.”
— Ahniwake Rose, OK Policy Executive Director [Ahniwake Rose / The Journal Record]
Editorial of the Week
Much to consider in redistricting
Oklahoma lawmakers will be back at the Capitol next month to reapportion the state’s congressional districts and make adjustments to legislative districts that will have to be redrawn to match population migrations revealed by the 2020 Census.
Census data show a sizable number of Oklahomans migrated toward the state’s urban and suburban centers. Nearly half of all Oklahoma residents live in just four counties — Canadian, Cleveland, Oklahoma and Tulsa counties — and about 20% of the state’s residents live in Oklahoma County.
While reapportionment requires districts be drawn with roughly about the same number of people within each one, lawmakers must reject any plan that would marginalize rural Oklahomans. Three of the state’s five congressional districts are influenced by urban and suburban centers with concentrated populations — any more would be overkill.
In addition to considering population, state lawmakers need to take into consideration economic interests and historical precedent that make rural Oklahoma unique. Interests shared among rural residents in one part of the state differ dramatically from those in other parts of the state, and those differences also should be considered.
We appreciate efforts of lawmakers to conduct public meetings during the past several months during the reapportionment and redistricting process. While the process may be more transparent than in the past, it’s difficult to swallow any assertion the process has been free from partisan politics.
There have been too many examples of times when districts have been drawn in ways that marginalize voters and diminish their will. New tools available today — online interactive maps — potentially could help voters hold lawmakers accountable as they draw maps that could influence the outcome of elections during the next decade.
In the event those tools don’t help, we would urge lawmakers to do the right thing: Give a voice to all Oklahomans.
Numbers of the Day
- $435 million – The accumulated state budget savings since 2001 due to a 64 percent decline in youth detention costs, according to a 2019 Open Justice Oklahoma report. [Open Justice Oklahoma]
- 91%– Percentage of Oklahoma low-income households who are using monthly Child Tax Credit Payments to pay for basic needs (food, clothing, rent, mortgage, utilities), which is three points higher than the national average [CBPP]
- 5th – Oklahoma is the 5th highest tax state for low-income earners. In addition, Oklahomans carry tax obligations unequally: The lowest 20 percent of earners pay 13.2 percent of their income in taxes, while the top 20 percent (making $89,100 or more) pays just 8.2 percent. [OK Policy]
- $2.1 billion – If Oklahoma had maintained its state and local taxes at its 2004 level, the state budget would have been $2.1 billion higher in 2017 than it actually was. [OK Policy]
What We’re Reading
- Studies Show Dramatic Racial Disparities in Front End of Juvenile Justice System [Annie E. Casey Foundation]
- 9 in 10 Families With Low Incomes Are Using Child Tax Credits to Pay for Necessities, Education [CBPP]
- A Better Path Forward: A Budget and Tax Roadmap for Oklahoma [OK Policy]
- State Income Taxes and Racial Equity: Narrowing Racial Income and Wealth Gaps with State Personal Income Taxes [ITEP]
