Working families got a little of the help they needed this session

Families are the backbone of our society and economy, but too many Oklahoma families cannot keep up. Many Oklahoma jobs pay less than a quarter of what it takes to support a family. Too many workers don’t have access to paid sick leave, paid family and medical leave, health insurance, or retirement accounts. 

State legislators regularly hail the importance of Oklahoma families, but their words don’t match their actions. Oklahoma families continued to be underserved by their legislature this session. While the basic structural problems of low-income work, including low pay and lack of paid leave, were left unaddressed this session, many working families will benefit from a long-overdue restoration of the state Earned Income Tax Credit.

Working families’ issues aren’t discussed much in the Legislature, but when they are, they can win 

The state Earned Income Tax Credit (EITC) encourages parents to work because they will save more on taxes the more they earn, up to a limit. In 2016, the Legislature addressed a budget shortfall by making this credit non-refundable, meaning that recipients  might not receive the full credit if it was more than the taxes they owed. This cost more than  200,000 families as much as $279 a year. 

After bills to restore refundability failed to receive committee consideration for four straight legislative sessions, the discussion finally broke through to the surface this year, and working families got a big win. The full credit will again be available as a refund, starting two years from now when 2022 taxes are due. Refundability was restored as part of a larger income tax cut bill

Working families will also benefit from expanded public services in the state’s new budget, such as Medicaid expansion, more school spending for textbooks, smaller class sizes, and new mental health initiatives.

The workplace, however, wasn’t addressed this session. Lawmakers introduced bills that would have helped low-income workers and their families by increasing the state minimum wage or allowing local governments to set their own minimums, creating paid family leave programs, and creating state-managed portable retirement accounts. However, none of these bills received so much as a committee hearing. (See table following post.)

Too many good ideas didn’t see the light of day, and even the good came with some bad

As noted, efforts to increase wages and provide for family leave and workers’ retirement benefits did not see the light of a committee hearing once they were introduced.

Even the important and hard-fought gains families received through EITC refundability and select budget enhancements had their limits. The EITC was decoupled from the federal credit, which means taxpayers won’t see their state EITC grow in future years when the federal one is adjusted annually for inflation, or when Congress increases the amount of the federal credit. If the state EITC is not recoupled to the federal one, its value will fall at least one or two percent every year.

Similarly, while the budget will result in improved school funding  and more investments in health care in the coming year, these gains could be short-lived since the legislators approved permanent cuts in both the individual and corporate income taxes, while they also increased tax incentives for a range of special interests. When the next recession or oil bust comes, further cuts in essential state services will be more likely.

Families won’t thrive if we don’t work harder to get them the help they need

Oklahoma trails too many states in helping workers with a fair minimum wage, paid family leave, and a sufficient state EITC. Meanwhile, Oklahoma’s elected leaders regularly extol the value of work, but question the motives of those who haven’t been able to return to the workforce. 

Oklahoma workers and their families should not expect change until Oklahomans demand action. The challenge for the coming session will be to encourage legislators to make good on their professed commitments to work and to families. They can do this by supporting a minimum wage that will support a family and by passing paid leave programs that don’t force workers to choose between a paycheck and the health and welfare of themselves and their loved ones. We also should expect a sustained and sincere commitment to fixing our upside-down tax system that makes our low-income neighbors among the most heavily taxed in our region. Those who have worked tirelessly and at last successfully to get EITC refundability back must keep up the pressure to at least double the state EITC and re-couple it to the federal credit.

Family Policy Bills Introduced, but Not Considered, in the 2021 Session
Bill Author Proposal
Earned Income Tax Credit Bills 

HB 2429

Rep. Monroe Nichols (D-Tulsa)

Makes state EITC refundable

HB 2553

Rep. Emily Virgin (D-Norman)

Maxes state EITC refundable

SB 218

Sen. Carri Hicks (D-Oklahoma City)

Makes state EITC refundable

SB 249

Sen. John Michael Mongtomery (R-Lawton)

Makes state EITC refundable and increases to 7.5% of the federal effective in  2025.

Minimum Wage Bills

SB 101

Sen. Carri Hicks (D-Oklahoma City)

Allows cities and political subdivisions to set local minimum wage

SB 125

Sen. Carri Hicks (D-Oklahoma City)

Phased Increase in state minimum wage to $10/hour in  2024.

SB 161

Sen. George Young (D-Oklahoma City) and Rep. Emily Virgin (D-Norman)

Increase in state minimum wage to $10.50/hour in 2022.

Workplace Benefits Bills

HB 1615

Rep. Forrest Bennett (D-Oklahoma City)

Creates paid family/medical leave program for 4-12 weeks paid leave, funded by employee contributions

HB 2302

Rep. Dustin Roberts (R-Durant)

Creates state-managed retirement system, funded by employee contributions

HB 2456

Rep. Emily Virgin (D-Norman)

Creates paid family/medical leave program for 4-12 weeks paid leave, funded by employee contributions

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ABOUT THE AUTHOR

Paul Shinn

Paul Shinn is a Budget and Tax Senior Policy Analyst with OK Policy. Shinn has held budget and finance positions for the Oklahoma House of Representatives, the Department of Human Services, the cities of Oklahoma City and Del City and several local governments in his native Oregon. He's also taught political science and public administration at the University of Oklahoma, University of Central Oklahoma, and California State University Stanislaus. While with the Government Finance Officers Association, Paul worked on consulting and research projects for the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and several state agencies and local governments. He also served as policy analyst for CAP Tulsa. He holds a Ph.D. in Political Science from University of Oklahoma and degrees from the University of Oregon and the University of Maryland College Park. He lives in Oklahoma City with his wife Carmelita.

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