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
Lawmakers cut corporate income taxes while polls show corporations should pay their fair share: Although state leaders have reduced the taxes that corporations pay in recent years, the public and businesses both agree that Oklahoma has more pressing concerns that, if addressed, will provide more long-term success and economic growth for our state. [Emma Morris / OK Policy]
New national study shows Oklahoma’s tax system worsens inequality, among the nation’s most unfair: Oklahoma’s tax system is upside-down, with everyday Oklahomans paying a far greater share of their income in taxes than wealthy residents. Proposals to eliminate the state’s income tax would widen this disparity, according to the latest edition of the Institute on Taxation and Economic Policy’s Who Pays report, the only distributional analysis of tax systems in all 50 states and the District of Columbia. [OK Policy]
New report spotlights imbalances among child well-being for Oklahoma’s children of color: A new national report out Jan. 10 shows that child well-being outcomes for Oklahoma’s children of color are generally worse than their national peers with index scores below the national average. However, those results are in the context of a nationwide failure to equip all children to succeed, with policy choices and lack of support for families resulting in particularly dire outcomes for Black, Latino, and American Indian or Alaska Native. These policy choices have been especially acute in Oklahoma due to state lawmakers disinvesting in the services that help our children thrive. [Carly Putnam / OK Policy]
Policy Matters: Reports reflect entrenched economic, racial disparities: Two reports released this week highlight significant disparities faced by Oklahomans, especially along racial and economic lines. The Annie E. Casey Foundation’s 2024 Race for Results report released Wednesday shows that most Oklahoma children have worse well-being outcomes than their national peers, especially among racial and ethnic categories. [Shiloh Kantz / Journal Record]
Big ticket tax cuts could prevent strategic investments in Oklahoma’s future (Capitol Update): Big ticket outcomes for the upcoming legislative session have yet to come into focus. Big ticket items could include passage of one or more of the various tax cut proposals being discussed or appropriations that affect budgets across state government. [Steve Lewis / Capitol Update]
January 23, 6:00 p.m. [Tuesday]
ONLINE AFFINITY GROUP: Safe Communities (Criminal Justice Reform)
The Safe Communities/Justice Reform Affinity Group is for advocates with an affinity to help make our communities safer. This statewide group meets online regularly in the winter and spring to discuss legislation, share resources, and plan community outreach related to criminal justice reform in Oklahoma. Learn more about affinity groups here, or contact Southeast Regional Organizer Roxanne Logan for more information.
Weekly What’s That
A regressive tax is a type of tax that takes a larger percentage of income from low-income individuals or households than from high-income individuals or households. In other words, as income decreases, the proportion of income paid in taxes increases. This is in contrast to a progressive tax, where the tax rate increases as income increases.
Regressive taxes tend to have a disproportionate impact on lower-income individuals because they impose a higher burden on their limited financial resources. Examples of regressive taxes include sales taxes and flat taxes, where everyone pays the same percentage of their income regardless of their income level.
The Institute on Taxation and Economic Policy in 2024 ranked Oklahoma’s tax system as the nation’s 16th most regressive as part of the 7th edition of its Who Pays? report.
Quote of the Week
“They say we are taking in too much money, more than we need to spend on core services, that our surpluses are too high, that we are overtaxing our citizenry. The thing is, we have heard these arguments before, and they put our state into economic peril.”
-Labor Commissioner Leslie Osborn, writing in an op-ed warning about the latest calls from some state government leaders to cut taxes. [The Oklahoman]
Editorial of the Week
Local landlords have frequently complained about being taken advantage of by deadbeats who avoid paying rent for as long as they can, and then move on to victimize another property owner.
It’s a problem everyone can understand, but when folks are temporarily in trouble and not chronic abusers of the system, they deserve some consideration.
It might not seem so to owners who are struggling to maintain their rental properties, but Oklahoma has one of the shortest eviction timelines in the country. That’s not the whole story, though; once eviction proceedings begin, it can take 90 days or even more to oust the person who’s not paying the bills in a timely manner. And then, the renter – perhaps bitter about being cast out – may damage the property as part of a vendetta. Reports of this behavior are extremely common in Cherokee County, and there’s not a lot that can be done.
Sen. Julia Kirt’s proposal is aimed at helping a different type of renter – the kind with a temporary streak of bad luck. It could mean loss of a job, health problems, a death in the family, trouble with children. It might even mean the presence of a pet that’s not supposed to be in the dwelling, but the owner doesn’t want to just dump it on the street.
Kirt, of Oklahoma City, wants to give renters a bit more time to either come up with the money owed the property owners, or to find a new home. S.B. 1575 would delay the window for scheduling an eviction trial to 10 business days, and delay the notice of that proceeding to a week. Her goal is to reduce homeless, and she thinks giving tenants a bit more time to decide a course of action could make a big difference.
Statistically speaking, she’s correct. She cites data showing that Oklahoma City and Tulsa have among the highest eviction rates in the U.S. – 20th and 11th respectively. Those numbers aren’t good, and they constitute another example of what turns off prominent industry leaders who would otherwise consider relocating to Oklahoma.
Homeless, even the temporary variety, can have a domino effect. When people are worried about keeping their jobs or about where they’re going to live, their children don’t perform as well in school. An eviction on the record can also prevent prospective property owners from giving the keys to a family, deeming them a poor risk. Studies show getting kicked out presents a bigger obstacle to future renting or leasing than income, job problems, or even criminal history.
And kicking someone out is often more costly to landlords and taxpayers than just letting a tenant slide for a while, according to Kirt. That’s similar to the death penalty, which many support until they realize it costs far more to eventually kill a prisoner than to put him behind bars for life.
Kirt says about 300 families faced eviction in Oklahoma County over the recent Christmas holiday. That’s tragic, and it’s cruel. Kirt’s legislation might help.
She had this to say: “Homelessness also results in increased reliance on programs funded by taxpayers nonprofits. We’re not giving tenants a free pass, but giving them just a few more days can results in a better outcome for all the stakeholders.”
Legislators of either party should have no trouble with this one.
- From OK Policy and Housing Solutions: Oklahoma legislators need to do more to expand access to housing
Numbers of the Day
- 65% – A majority of Americans (65%) say that tax rates on large businesses and corporations should be raised a lot (39%) or a little (26%). [Pew Research]
- 16th – Oklahoma has the nation’s 16th most regressive tax system, which means lower- and moderate-income Oklahomans pay a much higher share of their income towards taxes than wealthy residents. [Institute on Taxation and Economic Policy]
- 1 – Of the 12 child well-being measures included in the 2024 Race for Results report, Oklahoma scored in the top half of states in only one indicator: 17th in percentage of children enrolled in nursery school, preschool, or kindergarten. [OK Policy]
- 19.5% – Percentage of Oklahoma children who lived in poverty during 2022. [OK Policy]
- 300% – Eliminating Oklahoma’s personal income tax would mean the lowest-income 20 percent of Oklahoma taxpayers would face a state and local tax rate that is 300 percent higher than the top 1 percent of households [Institute on Taxation and Economic Policy via OK Policy]
What We’re Reading
- 2023 Oklahoma Business Leaders Poll: The 2023 edition of the Oklahoma Business Leaders Poll provides critical insight into the sentiments, concerns, and outlook of the Oklahoma business community, from the C-suite to the corner store. The survey highlighted important areas in need of improvement for Oklahoma’s economic growth, including workforce and education remaining the top concern for business leaders. Nearly half (44%) chose those as the top issue facing business in the state. Workforce and education beat out the next closest public policy priority — taxes and incentives — by a nearly 4 to 1 margin (44% to 12%). [State Chamber Research Foundation]
- Who Pays? 7th Edition: This study provides important context for those interested in state and local tax policies and the role they play in funding vital programs and services and providing economic security for all families and communities. It examines whether state tax systems are regressive or progressive by providing a thorough analysis of how state and local tax policies affect taxpayers across the income spectrum and discusses ways in which certain tax policies deepen racial disparities in income and wealth. The headline conclusion of this research is that most states require low- and middle-income families to pay higher effective tax rates than the wealthy. This, of course, has broad implications, not only for taxpayers’ after-tax income but also for the revenue states collect to fund basic programs and services. [Institute on Taxation and Economic Policy]
- 2024 Race for Results: The Annie E. Casey Foundation has released its latest Race for Results® report a decade after its inaugural publication, revealing progress in some areas but persistent disparities for children of color in the United States. The report shows improvements have been made in at least six out of 11 comparable indicators across racial and ethnic groups over the past decade. Despite this progress, the nation falls short in adequately preparing children to achieve crucial milestones. [Annie E. Casey Foundation]
- To tackle poverty, more states will offer bigger child tax credits in 2024: Many Americans took a double whammy to the pocketbook this year: Prices for things like food and rent rose, and federal pandemic aid continued to peter out. But a string of states took a cue from one of those relief measures — the expanded federal child tax credit — and are stepping in to help bridge the gap. That tax credit was a pandemic success story. Enacted in 2021, it cut child poverty in half before it expired at the end of that year, and poverty rates shot right back up. Since then, the number of states that have created their own permanent child tax credit has doubled. [NPR]
- Tax Policies to Expand Economic Growth and Increase Prosperity for American Families: Investing in children and supporting the wages of working people—which have been stagnant for the past half century—are critical components in equitable and sustainable economic growth. Two options to achieve this are a fully refundable child tax credit, as implemented temporarily in 2021, and a universal earned income tax credit. This testimony also explains why a national retail sales tax would require extremely high rates, massive cuts in government expenditures, or unprecedented increases in the debt. [Tax Policy Center]