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
National experts say Oklahoma is part of a damaging tax-cutting trend: Attempts by Oklahoma elected officials to reduce or eliminate the state’s personal income tax are part of a national tax-cutting trend that could undermine funding for the shared services that can move our state out of the bottom 10 states for quality of life and overall well-being for all Oklahomans. [OK Policy]
- Video of OK Policy’s Shiloh Kantz during the national press call about cutting state taxes | Transcript
Policy Matters: Legislature shouldn’t be ‘Fear Factor’: Looking through bills filed for next month’s regular session, I remembered the television game show “Fear Factor” that featured contestants challenged to do unsavory — and often disgusting — feats until someone was declared the “winner.” I felt the same way reading a handful of proposed bills that could most charitably be described as deeply unserious. Instead of getting swept up in the political theater, here’s what informed Oklahomans should watch for this session. [Shiloh Kantz/ Journal Record]
January 30, 6:00 p.m. [Tuesday]
ONLINE AFFINITY GROUP: Thriving Families (Hunger, Housing, and More)
The Thriving Families Affinity Group is for advocates of policies that help all Oklahomans thrive, including access to affordable housing and nutritious food. This statewide group meets online regularly in the winter and spring to discuss legislation, share resources, and plan community outreach.
January 31, 6:00 p.m. [Wednesday]
ONLINE AFFINITY GROUP: Healthy Oklahomans (Health Care Access)
The Healthy Oklahomans Affinity Group works on safeguarding and expanding access to health care in Oklahoma. This statewide group meets online regularly in the winter and spring to discuss legislation, share resources, and plan community outreach related to health care reform in Oklahoma.
Weekly What’s That
State Question 640
State Question 640 was a citizen-initiated ballot measure that was approved by Oklahoma voters in a special election in March 1992 with 56.2 percent of the vote. The measure amended Article 5, Section 33 of the Oklahoma Constitution to add restrictions on how revenue bills can become law. Under SQ 640, a revenue bill can only become law if: (1) it is approved by a 3/4th vote of both legislative chambers and is signed by the Governor; or (2) it is referred by the legislature to a vote of the people at the next general election and receives majority approval. State Question 640 also prohibited a revenue bill from containing an emergency clause; instead, revenue bills can only take effect 90 days after being signed by the Governor.
Since passage of SQ 640 in 1992, Oklahoma voters have approved only one state question to raise taxes: SQ 713, which increased the tobacco tax in 2004. Until passage of HB 1010xx in 2018, no revenue bill succeeded in gaining approval from three-quarters of legislators in both chambers.
Quote of the Week
“Tax cutting always requires trade offs. It might be smaller teacher pay raises, it might be less frequent road maintenance, it might be a weaker safety net for folks facing hard times. Whatever it is, you’re giving something up and will likely be talking about cutting services that the public really needs and wants.”
-Aidan Davis, state policy director at the Institute on Taxation and Economic Policy, discussing how income tax cuts would affect the state’s ability to provide essential services. [Journal Record]
Editorial of the Week
Tulsa World Editorial: Oklahoma Legislature needs to skip on ill-considered tax cut proposal
The most responsible move for lawmakers next week would be to decline consideration of a tax-cut plan until a clearer economic picture emerges.
Gov. Kevin Stitt called the Legislature into special session to pass his proposal of a 0.25-percentage point reduction in individual income tax rates. Senate President Pro Tem Greg Treat showed fiscal conservatism by promising to gavel out without action. It’s too soon to pass a tax cut; too many questions linger.
The median Oklahoma household would save $93 a year, increasing to about $2,300 for the richest residents and lowering to about $15 for lower-income individuals. That’s hardly worth gutting future state budgets. It’s definitely not a “pay raise” that Stitt touts it to be.
Oklahomans have among the lowest personal and corporate tax rates in the nation, according to the conservative-leaning Tax Foundation.
State leaders need to figure out what they expect out of public services and what that costs. This tax cut would take $230 million away from state revenue, based on year-old estimates. Lawmakers can reduce or eliminate a tax with a simple majority but cannot raise or add a tax without at least 75% approval. It nearly ensures a tax can never return.
Which would you rather have, a $100 a year tax cut or a shorter wait for a drivers license exam? Or a few more Highway Patrol officers? Or a little less wear and tear on your car tires and suspension? Or, a bigger workforce by eliminating the 7,500 wait list for CareerTech job training programs? How about smaller class sizes in school?
No one has a handle on the true costs for the level of public services Oklahomans expect. Our population is growing, so demand on public programs will also grow. Yet, staffing at state agencies is at the lowest level since 1982.
Looking at the 2023 state revenue month-to-month to 2022, it has been coming in lower. Through six months of the current fiscal year, the state’s general fund receipts are 4.7%, or $200 million, below the same period a year ago. Income taxes are the state’s largest general revenue source, accounting for 43.5% of the total.
The state will not be notified of its final revenue numbers by the Board of Equalization until mid-February.
Oklahoma received billions in one-time federal funding during the pandemic, and the reality of the state’s revenue trends continues to develop.
That federal boost helped Oklahoma sock away unprecedented amounts into various savings accounts, possibly up to $4.5 billion. That’s not an indication of robust state government or income. It shows that lawmakers are not willing to pay for some programs or hire extra help.
Forced state cuts from 2008 to 2018 eroded critical services that haven’t fully recovered. That was created by previous lawmakers cutting taxes too far, an economic downturn, a slump in energy taxes and a lack of savings accounts.
Learn from that painful decade by being conservative in waiting to cut taxes.
Numbers of the Day
- 30.4 – In July 2021, 30.4 children received a summer lunch for every 100 children who received a lunch during the 2020–2021 school year. [Food Research & Action Center]
- 96% – Percentage of residential land in Oklahoma City that is zoned only for detached single-family homes by right. [OK Policy analysis]
- 12% – When adjusted for inflation and population growth, Oklahoma’s state budget for the current fiscal year that ends on June 30, 2024, is 12 percent smaller than the Fiscal Year 2000 budget. [OK Policy]
- 4 – Number of Oklahoma counties (Beaver, Caddo, Cimarron, and Texas) in which the SNAP benefit per meal was equal to or more than the average meal cost in that county. In all other Oklahoma counties, the average meal cost was up to 15% higher than the SNAP benefit. [Interactive Map / Urban Institute]
- 85% – Oklahoma’s current labor supply for construction and trades satisfies about 85% of peak labor demand in the state. [Associated Builders and Contractors]
What We’re Reading
- Rural Families with Low Incomes Prefer More Flexible Summer Meal Options: For many children, especially those from families with low incomes, summer vacation comes with a catch—no guaranteed meals at school. Several options exist for children to access food when school is on break, all of which are geared toward reducing food insecurity. However, there is no single solution to summer child hunger, and too often, the debate about which options schools should provide doesn’t consider what options families prefer. [Urban Institute]
- Survey Finds Large Majorities Favor Policies to Enable More Housing: Most Americans support a roster of zoning policies intended to boost housing availability and affordability, according to a nationally representative survey conducted in September for The Pew Charitable Trusts. The findings from one of the largest surveys done on these issues shows significant but varying support for 10 policy initiatives to encourage more housing. At the high end, nearly 9 in 10 (86%) say they would back efforts to expedite permitting processes, while at the lower end, about half (49%) support the concept of allowing smaller lots, and homes to be built closer together. [Pew Research]
- States Should Reverse Tax-Cut Spree, Take Brighter Path in 2024: As the 2024 legislative season starts, state policymakers again face a critical choice when it comes to tax policy: whether to pursue policies that ensure wealthy households and corporations pay their fair share and that vital public services are funded adequately, or to continue the recent trend of costly, regressive tax cuts that undermine their ability to meet people’s needs or invest in the future. With state revenues weakening and other risk factors on the horizon, states should reject calls for additional tax cuts and instead protect and raise revenues to support public services that help families and communities thrive. [Center on Budget and Policy Priorities]
- SNAP Is Linked With Improved Health Outcomes and Lower Health Care Costs: A substantial body of research links the Supplemental Nutrition Assistance Program (SNAP), the nation’s most important anti-hunger program, with lower health care costs and improved health outcomes. Those include better self-reported health, lower risk of heart disease and obesity among adults who had access to SNAP as children, and greater medication adherence among older participants, who may also be better positioned to live on their own in their community. This research has emerged in the last 15 years (and not much of it yet reflecting the COVID-19 pandemic, during which SNAP expansions played a key part in averting increased hunger), adding to previous work showing SNAP’s powerful capacity to help families buy adequate food, reduce poverty, and help stabilize the economy during recessions. [Center on Budget and Policy Priorities]
- The US needs homes. But first, it needs the workers to build them: The United States needs an estimated 7 million more homes to house everyone who needs shelter. But to build all those homes, experts say, America would need many more construction workers. An analysis released earlier this month by the Associated Builders and Contractors found that at the end of November there were about 459,000 job openings in the industry. The 5.4% job opening rate was the highest since 2000. [Stateline]