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’s edition of The Weekly Wonk was published with contributions from Communications Intern Lilly Strom.
This Week from OK Policy
- “A Day Without Taxes … or, Be Careful What You Wish For”: Twelve years ago, I wrote this article to make a point about the essential role taxes play in our everyday lives. Local, state, and federal revenue help provide robust public services to build stronger communities, support the future generations of Oklahomans, invest in our economy, and make our state a place where people want to live. The original piece was intended neither as a prediction nor as a challenge to lawmakers. Since then, however, the real Oklahoma has moved closer to the one I feared in my dream. [Paul Shinn / OK Policy]
- Friction between elected officials rises to public view (Capitol Update): It seems there’s a bit of early friction this year between the House, Senate, and the governor. Senate President Pro Tempore Greg Treat complained openly about House actions, apparently holding certain bills hostage for leverage in later negotiations. The House failed to hear a number of Treat’s bills before last Thursday’s committee deadline. This sort of thing happens, but it has to be worse than usual to break out into public. There are ways for leadership bills to get heard later, but the real issue is finding enough common ground to move forward. [Steve Lewis / Capitol Update]
- Medicaid helps fill gaps in tribal health services (Oklahoma Medicaid Stories): Ginger Willhite’s daughter is a citizen of the Cherokee Nation, which provides free health care for its citizens. However, when her daughter was diagnosed with Type 1 diabetes, she required specialty care that was not available through her tribal health care but available through SoonerCare. [OK Policy]
- Policy Matters: EITC supports working Oklahomans: Tax equity advocates have called out the shortcomings of Oklahoma’s House Bill 2041, a proposed individual income tax cut that mostly benefits residents earning more than $100,000 annually. In its current form, the bill also would provide support for low-income Oklahomans by restoring the refundability of the state Earned Income Tax Credit. However, more can be done to equitably distribute this intended tax relief and improve the power of the state’s EITC. [Ahniwake Rose / Journal Record] To learn more about how the Oklahoma EITC impacts each of Oklahoma’s 77 counties, check out the interactive map at OklahomaEITC.org.
Weekly What’s That
Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a tax credit that subsidizes work for low-income families. The EITC is the nation’s largest cash or near cash assistance program after the Supplemental Nutritional Assistance Program (SNAP). In 2018, the EITC lifted about 5.6 million people out of poverty, including about 3 million children, according to the Center for Budget and Policy Priorities.
The amount of EITC depends on a family’s earnings and number of children; the maximum credit in 2019 was roughly $5,800 for a family with two children. The EITC is refundable, which means the full amount can be claimed even if it exceeds a taxpayer’s tax liability. Refundability is critical to the success of the EITC because it allows the credit to still reward work and support families even if workers pay little income tax.
Oklahoma is one of 26 states with a state EITC, set at 5 percent of the federal credit. In 2016, the Oklahoma Legislature made the credit non-refundable. The state EITC was claimed on 303,403 returns for $16.1 million in FY 2020, according to Oklahoma Tax Commission records.
Quote of the Week
“Oklahomans are not overtaxed. They’re underserved by their state government, which is the largest single impediment to economic growth.”
–Tulsa World Editorial [Tulsa World]
Editorial of the Week
Some statehouse bills may be a threat
There’s something peculiar going on with the Oklahoma Legislature – something that should give pause to those who insist they want “less government,” but continue voting for candidates who give them more.
With a session that lasts less than four months, the Legislature can put forth an astonishing number of bills, which the governor – in this case, Kevin Stitt – dutifully signs into law. Oklahoma politicians are also compensated comparatively more than their counterparts in most other states, given the time they spend on the job, which could explain why some of them feel the need to pass so many laws. They want to give us our money’s worth, as taxpayers.
But never mind that. Everyone with any good sense knows even the most draconian laws are, to quote a former sheriff and police chief, deemed “fine and smooth” – as long as those measures are pushed through by the political party of the person rendering the opinion.
The Legislature has put forth several decent laws this session, as the Press and other newspapers have tried to report – although we can barely keep up. That in itself is what should give Oklahoma voters pause. If the media can’t even keep up with bills enough to analyze them, then how can the general public be expected to do it?
There are signs, though, that some laws are either redundant, or perhaps unnecessary. Although it’s bipartisan in nature, why must we spend time assuring lack of discrimination for lactating school employees? Are they really under attack to the same degree as, say, people of color or the LGBTQ community? That’s one thing, but some laws seem to be precursors to things to come that will take this state down a dark path. When we’re passing laws ensuring that people can’t protest or express their opinions at meetings of any public body, we’re watching the First Amendment crumble before our very eyes.
Other than the loss of free speech and the right to redress grievance, the most frightening measures usually have to do with funding public education. Although polls are unreliable when it comes to presidential politics, they’re usually spot-on when it comes to state matters. The vast majority of Oklahomans support public education – and a free education is guaranteed to all children by the state’s constitution. Yet some lawmakers try to unravel the system at almost every opportunity.
This isn’t a matter of partisan politics. Sen. Dewayne Pemberton and Rep. Bob Ed Culver, both Republicans, also call themselves staunch advocates of public education – typically seen as a Democratic plank. And though Culver hasn’t been in office long enough yet to have a solid record, Pemberton certainly has. In fact, attacks on public education are attempts by certain statehouse stooges to polish their noses on the backsides of well-heeled constituents who want taxpayers to fund their own children’s elite private school educations. Or about certain religious elements that want to dip their hands into the collective till.
Oklahoma voters owe it to themselves to keep their eyes peeled. Otherwise, they’ll lose everything they hold dear before they know it.
Numbers of the Day
- 5% – Oklahoma’s Earned Income Tax Credit currently is set at 5% of the federal EITC [Source: National Conference of State Legislatures]
- 6 – Number of states, which includes Oklahoma, where the state Earned Income Tax credit is non-refundable. [Source: Urban Institute]
- 5.7 million – Number of Americans the Earned Income Tax Credit helped lift out of poverty – including about 3 million children — in 2017. [Source: CDC]
- 329,000 – Number of Oklahoma tax returns that filed Earned Income Tax Claims, as of Dec. 2020 [Source: IRS]
- 70% – Effective percentage reduction of Oklahoma’s Earned Income Tax Credit when state lawmakers made it non-refundable in 2016. [Source: Center on Budget & Policy Priorities]
What We’re Reading
- State Earned Income Tax Credits [Urban Institute]
- Policy Basics: The Earned Income Tax Credit [Center on Budget and Policy Priorities]
- How Does the Earned Income Tax Credit Affect Poor Families? [Tax Policy Center]
- The EITC and minimum wage work together to reduce poverty and raise incomes [Economic Policy Institute]
- Earned Income Tax Credits Can Improve Health for Mothers and Children [CDC]