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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
Two bills that could be valuable justice reform measures (Capitol Update): Continuing the criminal justice work he began last session, Rep. Brian Hill, R-Mustang, last week filed committee substitutes in the House Rules Committee for House Bill 2477 and HB 2490 that were introduced earlier as shell bills. The two bills were passed out of the Rules committee unanimously and, if enacted into law, would be valuable criminal justice reform measures. [Steve Lewis / OK Policy]
In What Ways Can the Federal Government Make the Economy Work For Oklahomans?: Shiloh Kantz, Executive Director for the Oklahoma Policy Institute, was invited to testify during the U.S. House Ways and Means Committee Field Hearing on the “State of the American Economy: The Heartland.” The hearing was held March 7, 2023 in Yukon, Oklahoma. During the hearing, Kantz shared how low- and moderate-income residents are faring and how federal investments — especially in childcare, Paid Family Medical Leave, an increased minimum wage, and targeted tax credits — can help the economy and Oklahoma families.
Policy Matters: Government actions can help Oklahoma families, businesses: This week I joined four other Oklahomans testifying as part of the U.S. House Ways and Means Committee field hearing in Yukon. I am grateful that lawmakers from this important committee visited Oklahoma to hear directly how federal policy impacts our economic health. I hope lawmakers heard that federal government efforts – such as child care assistance, Paid Family Medical Leave, and targeted tax credits – can support Oklahoma’s economic health while delivering much-needed relief to low- and moderate-income families. [Shiloh Kantz / Journal Record]
Upcoming Together Oklahoma Meetings
- Tuesday, March 14 @ 6:30 p.m. – Thriving Families Affinity Group focusing on issues and state policies that can provide equitable opportunity for all Oklahoma families to thrive. [Join the Meeting Online]
- Wednesday, March 15 @ 6:00 p.m. – Oklahoma County Community Meeting, in person and online. Belle Isle Public Library, 5501 N Villa Ave. in Oklahoma City. A community discussion about the issues facing Oklahoma County. Special guests: Civic Learning Coalition and the Oklahoma Education Association. [More Information]
- Thursday, March 16 @ 6:30 p.m. – Safe Communities/Justice Reform Affinity Group focusing on issues that can help make our communities safer, including criminal justice reforms.. [Join the Meeting Online]
Weekly What’s That
Education Scholarship Tax Credits (Equal Opportunity Education Scholarship Act)
In 2011, the Legislature passed the Oklahoma Equal Opportunity Education Scholarship Act, which authorized the creation of scholarship granting organizations (SGOs) and educational improvement grant organizations (EIGOs). SGOs issue scholarships for students who meet certain requirements to attend private schools, and EIGOs issue grants to public schools.
Under the Act, individuals and businesses can make a donation to either an SGO or EIGO and receive a tax credit of 50 percent for a one-time donation or 75 percent for a two-year donation, along with the standard charitable deduction (donations to EIGOs for school districts with enrollment of less than 2,000 students are eligible for a 100 percent tax credit). The maximum tax credit is $2,800 for an individual, $5,600 for a married couple, and $100,000 for a business. In 2021, the Legislature increased the total amount of tax credits that can be issued each year from $5 million to $50 million, with $25 million allocated for SGOs and $25 million for EIGOs.
Proponents of the tax credits argue that they expand parental school choice by helping cover the cost for low-income students to attend private schools. Opponents express concern that public tax dollars are used for religious education and that the program’s eligibility guidelines allow middle-income families to benefit.
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“Oklahoma is a beautiful and diverse state, filled with a multitude of religious and spiritual practices, and through this diversity, we are honored to live with an eye towards tolerance, acceptance, and understanding of our neighbor in ways we would not if we were all of the same faith.”
Editorial of the Week
Tulsa World Editorial: Tax cut fever shortsighted on needs in state government
The legislative race to cut state revenue through tax cuts ignores the current underfunding of the Oklahoma government.
Bills advancing in the House would reduce taxes by about $1 billion. The Senate hasn’t passed its proposals yet, but tax cuts are likely to be part of it. Gov. Kevin Stitt has pointed to a record savings of $4 billion as justification for tax relief.
That sounds like a lot until considering the state’s annual budget is about $11 billion.
The proposed House tax breaks are the elimination of the state grocery tax, 0.5 percentage point income tax rate cut ($465 million revenue loss) and 0.25 percentage point reduction in personal income tax rates ($235 million revenue loss).
In addition, the House passed a measure for tax credits to private school and homeschool parents that will cost about $300 million.
We have been supportive of getting rid of the regressive grocery tax, but we are conservative about the rest. Part of our resistance is the difficulty in reinstating taxes, if needed. It only takes a simple majority to reduce or cut a tax, but a supermajority to increase taxes.
Also, the Tax Foundation ranks Oklahoma as having among the lowest personal income and corporate tax rates in the nation.
Before cutting state income, we prefer to invest it into agencies still recovering from five budget failures since 2016. Those shortfalls, in part, were from former lawmakers cutting too many taxes when times were plentiful.
Many lawmakers believe the state government is at the right levels. Proof is all around showing that to be untrue.
People going to the Department of Public Safety for various driver’s tests wait a minimum of two hours and wait weeks for driving tests. A backlog of rape kits for testing at the Oklahoma State Bureau of Investigation is at about 2,900.
Oklahomans still struggle finding mental health providers; prisons are overcrowded.
In education, it would take about $40 million to eliminate the current waiting lists to get into Career Tech programs across the state. The Legislature funds higher education at $400 million less than the regional state average and trails in per student funding by $3,600.
Common education is several years into a teacher and staff shortage crisis, and the state ranks last regionally and 47th nationally in per pupil expenditure. It would take about $2 billion for public schools to reach an average investment rankings. For those critical of student outcomes, don’t discount the effect of poor school funding.
For the goals set by Stitt and a strategic plan from the Oklahoma Higher Regents to increase college graduations and increase workforce certifications, these underfunding challenges need to be met.
In good times, it’s easy to go overboard with tax cuts. Oklahoma’s economy still heavily relies on oil and gas and agriculture. Those are often at the whims of the economy, international trade and even the weather.
We urge lawmakers to have a long view on the budget. Don’t just think about the next election cycle, but consider the needs now and the next 20 years.
Numbers of the Day
- 29.45% – In the top 10 Oklahoma counties with the highest share of American Indian/Alaska Natives, the median turnout for the 2022 midterm election was 29.45% compared to the 10 counties with the least share of AI/AN residents at 32.22%. The state average for all voters was 40.1% [OK Policy]
- 15% – Estimated rate of working-age people in the U.S. who remained outside the labor force due to home or family responsibilities. [Federal Reserve Bank of St. Louis]
- $13,302 – Female Oklahomans on average earn $13,302 less annually than male Oklahomans. The national gender pay gap is $10,150. [U.S. Census Bureau]
- 200,000+ – Wealthy families making more than $200,000 annually were the largest groups taking advantage of voucher tax credits, which reimburse individuals and businesses for “donations” they make to organizations that give out vouchers for free or reduced tuition at private K-12 schools, according to a recent analysis of such programs in Arizona, Virginia, and Louisiana. [Institute on Taxation and Economic Policy]
- 5.2% – The national child poverty rate fell from 9.7% in 2020 to 5.2% in 2021, largely due to the expanded Child Tax Credit that was part of the American Rescue Plan federal pandemic relief. The expanded CTC has since expired. [Economic Policy Institute]
What We’re Reading
- Obstacles at Every Turn: Barriers to Political Participation Faced by Native American Voters: This report details how Native people face obstacles at every turn in the electoral process: from registering to vote, to casting votes, to having votes counted. Findings in the report were derived from nine public hearings to better understand how Native Americans are systemically and culturally kept from fully exercising their franchise. [Native American Rights Fund]
- Paid Family Leave: A Benefit Helpful to Just About Everyone—So Why So Slow In Coming?: In terms of federal law, there is a guarantee of the right to unpaid family leave. The 1993 Family and Medical Leave Act (FMLA) mandates that if you’re an employee at any company or organization—whether private-sector or public-sector—of 50 or more employees, it is illegal for that employer to fire you for taking up to 12 weeks of unpaid family leave. Still, that’s a far cry from the 37 other advanced countries, with their much more robust leave guarantees. [Government Executive]
- The Simple Truth About the Gender Pay Gap: Over half a century after pay discrimination became illegal in the United States, a persistent pay gap between men and women continues to hurt our nation’s workers and our national economy. Women working full time in the U.S. are still paid just 83 cents to every dollar earned by men — and the consequences of this gap affect women throughout their lives. The pay gap even follows women into retirement: As a result of lower lifetime earnings, they receive less in Social Security and pensions. In terms of overall retirement income, women have only 70% of what men do. [AAUW]
- Tax Avoidance Continues to Fuel School Privatization Efforts: One of the most disturbing recent shifts in U.S. public policy has been the renewed push to privatize the nation’s K-12 education system. In short, school privatization proponents have managed to set up state policies that harness deficiencies in federal tax law and the self-interest of wealthy families to gin up enthusiasm for privatizing the U.S. public education system. [Institute on Taxation and Economic Policy]
- Child Tax Credit expansions were instrumental in reducing poverty rates to historic lows in 2021: Government policies enacted in the wake of the pandemic have proven critical for reducing child poverty in the United States. Child poverty reached its lowest level on record, as calculated by the Supplemental Poverty Measure (a measure that includes both cash and noncash benefits). This new historic low is largely thanks to the expanded Child Tax Credit (CTC), a key component of the 2021 American Rescue Plan (ARP) that has since expired. [Economic Policy Institute]
