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
Policy Matters: Everyday Oklahomans still waiting for inflation relief: Now that the months-long legislative impasse about an education plan appears to have cleared, lawmakers are completing the state budget for the coming fiscal year, which starts 44 days from today. Before the session started, elected officials said they were focused on providing inflation relief to Oklahomans, but the education plans and private school vouchers/tax credits have distracted legislative leadership from moving forward with that relief for residents who need it most. [Journal Record]
: The Senate Economic Development Select Committee met last week and heard about two models of economic development efforts: A traditional model that relies on a state agency and a hybrid model that uses a public-private entity. As the committee’s work continues, lawmakers should examine a previous public-private effort (“Oklahoma Futures”) and learn why it failed to live up to expectations and was later repealed. [Steve Lewis / OK Policy]
Weekly What’s That
Sine die is a term for the adjournment of an assembly for an indefinite period, from the Latin “without day”. In March 1989, Oklahoma voters overwhelmingly approved State Question 620, a voter-initiated constitutional amendment providing that regular legislative sessions begin on the first Monday in February and adjourn sine die not later than 5:00 pm on the last Friday in May. Special sessions are also adjourned sine die but there is no set date for their adjournment.
Quote of the Week
“The governor’s very interested in tax cuts. I’m interested in a balanced budget that makes sure we are able to take care of the future. Some of our caucus members are interested in it, but I think as a whole we are interested to make sure we take care of the people of Oklahoma.”
– Senate Appropriations and Budget Chairman Roger Thompson, R-Okemah, recommending caution on sweeping tax cuts that could put Oklahoma’s future revenue in jeopardy. [NonDoc]
Editorial of the Week
Editorial: Money for Nothing
It’s going to be hard to forget that the governor and legislature created an education funding package that essentially works as a tax break for wealthy Oklahomans.
It’s odd. Usually, big changes in education funding is preceded by a public outcry. Most Oklahomans are aware that we can’t keep losing teachers to other states that offer better livelihoods.
But, who really, among the greater public, asked for private school parents to get tax breaks?
It surely didn’t spring from any of our rural school districts.
Just judging by what we know from the last two years, it seemed to be conjured up by our politicians.
Senate Pro Tem Greg Treat introduced a plan last year for vouchers or education savings accounts and House Speaker Charles McCall wouldn’t even acknowledge it.
We know Gov. Kevin Stitt and then-Sec. of Education Ryan Walters had been campaigning on what they call school choice, but all they ever said was that “money would follow the student.”
It’s all laughably transparent that this stuff is cooked up by these charter and private school lobbyists who donate to campaigns.
Taxpayer money is going to fund private schools and no one who approved it is saying “why” it needed to happen. Only that we needed “compromise” and a “new approach.”
Just tax credits – for people who were already paying for private school.
No explanation on how that improves public education.
And, teachers will get their raises and still lag behind the rest of the states. We’ll have to address it again in a couple of years. Public schools will still be funded, but what happens when this big bill comes up at a time when oil is in decline?
Who’s on the chopping block, then?
Numbers of the Day
- 61% – If Oklahoma adopted a 4.5 percent flat tax and increased the standard deduction (as proposed in HB 2285), almost two-thirds of the tax cut — 61 percent — would go to the wealthiest 20 percent of Oklahomans. [OK Policy]
- ~ $93 – If Oklahoma lawmakers reduce the personal income tax by .25%, middle-income Oklahomans would get back about $93 while the top 1% would get back $2,381. [ITEP analysis via OK Policy]
- 1% – If the state adopted a 4.5% flat personal income tax, the top 1% of Oklahoma’s wealthiest would be the only income band that would NOT see a tax increase. [ITEP analysis via OK Policy]
- 85% – If Oklahoma increased the Sales Tax Relief Credit to $200 per person, 85% of the tax benefit would go to residents making less than $43,000 annually. Increasing the Sales Tax Relief Credit would deliver targeted inflation relief to more than 576,000 households, more than half of which include seniors. [OK Policy]
- >250,000 – Estimated number of Oklahoma households with senior citizens who would see a tax reduction if Oklahoma expanded the Sales Tax Relief Credit to $200 per person. [OK Policy]
What We’re Reading
- The Pitfalls of Flat Income Tax: While most states have a graduated rate income tax, some state lawmakers have recently become enamored with the idea of moving toward flat rate taxes instead. What’s the difference? And are states well served by the transition? A flat tax is one where each taxpayer pays the same percentage of their income whereas a graduated tax applies higher rates to higher incomes. Flat taxes have some surface appeal but come with significant disadvantages. Critically, a flat tax guarantees that wealthy families’ total state and local tax bill will be a lower share of their income than that paid by families of more modest means. [Institute on Taxation and Economic Policy]
- The Wisconsin public schools story: A cautionary tale: Idaho is one of the states considering using public dollars to offset parents’ costs for a private school education. One state to study is Wisconsin, the first state to pass modern taxpayer-supported subsidies for private and religious schools. One of the startling consequences of privatizing education that sometimes gets lost: Local property taxpayers in Wisconsin have essentially made up a $211.5 million loss of state funding by raising property taxes to keep their public schools operating. [Idaho Capital Sun]
- Tax Dodging Is a Monopoly Tactic: How Our Tax Code Undermines Small Business and Fuels Corporate Concentration: Local and federal policymakers have systematically structured tax systems in a way that deepens the concentration of corporate power. Meanwhile, smaller competitors bear their fair share of their tax burden, even as they are being crushed by outsized corporations. Making our tax system fairer would help small businesses—which are essential for robust economies, community well-being, and healthy democracies—compete on a more level playing field. [Roosevelt Institute]
- Taking Medicaid Away for Not Meeting a Work-Reporting Requirement Would Keep People From Health Care: Adding new work-reporting requirements to Medicaid would cause many low-income adults to lose coverage due to bureaucratic hurdles that don’t reflect the complexity of people’s circumstances, as failed experiments in several states show. These requirements would leave people without the health care they need, including life-saving medications, treatment to manage chronic conditions, and care for acute illnesses. [Center on Budget and Policy Priorities]
- How Fines and Fees Impact Families: Can Policies Like the Child Tax Credit Help?: Low-income families are overly burdened by financial penalties imposed for violations of the law, including parking and speeding tickets, court-imposed fees used to cover administrative costs of courts and prisons, and other criminal legal charges and penalties. Lacking financial resources, these families often turn to high-cost and predatory services and forgo basic necessities to avoid further legal consequences. When the federal Child Tax Credit (CTC) was temporarily expanded in 2021 to provide benefits to children in households with low or no incomes, it provided parents with new resources to invest in their children. Monthly deposits of CTC benefits also helped families better navigate their debt, including debt from fines and fees. Though, in some cases, CTC deposits were taken through garnishments by non-federal creditors reducing debt with involuntary payments. While the expanded CTC provided these families with some relief from onerous fines and fees, a temporary tax policy should not be used to solve the inequitable system of fines and fees in criminal law. [American Bar Association]