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Tuesday, August 21st, 2018Last Update: Tuesday, July 31st, 2018 11:05:57 AM

Step Up Oklahoma Calls for Tax Increases

By: Constitution Staff

In what can only be described as a “full-court press,” much of the financial elite of Oklahoma has joined together to pressure the Oklahoma Legislature to raise taxes, and gut the provisions of SQ 640, which prevents tax increases without a vote of the people – unless 75 percent of each house of the Legislature approves.

In 1992, Oklahoma voters approved SQ 640, which said all tax increases require a vote of the people, or a super-majority (75 percent) of each house of the Oklahoma Legislature. Step Up Oklahoma, a group of business and political leaders, wants to lower this super-majority threshold to 60 percent. One legislator suggested that perhaps we should lower the threshold to 60 percent of the people themselves – and take the Legislature out of the tax increasing business.

Interestingly, some of the very same individuals leading the charge are among those “reporting” on this development, including Gary Pierson, the president and CEO of the Oklahoma Publishing Company (the Oklahoman newspaper); Russell Perry, chairman of Perry Broadcasting; David Griffin, president and CEO, Griffin Communications (TV channels 9 in Oklahoma City and 6 in Tulsa); and Bill Masterson, president and publisher of the Tulsa World newspaper.

Although one of the reasons that Oklahoma’s state government has lost much available revenue is the multiple “tax credits” awarded by the state legislatures over the past several years, little is said by the group on the subject of tax credits. Many wealthy Big Business interests in the state have benefitted greatly from this explosion of tax credits, but no one can even cite just how many tax credits there are, and how much they have taken away from state revenues. They are prepared to cap tax credits on coal, wind and railroads, major competitors to the oil industry.

Instead of addressing tax credits, or the problem that it is unknown even how effective some spending is by many state agencies, the group is instead advocating massive tax increases. Naturally, raising the state’s cigarette tax by $1.50 per pack is on the list. An increase in the gross production tax is also included, as is increasing the state motor fuels tax on diesel and gasoline by six cents a gallon. Additional taxes would be raised with a wind generation tax. They also favor allowing Indian casinos to use balls and dice in their craps and roulette games. Not surprisingly, leaders of the Chickasaw Nation, the state’s biggest gambling enterprises, are part of this elite group. The Choctaw Nation and the Quapaw Tribe also have representation in the group.

Other members of the group include individuals from the state’s most powerful bankers – such as American Fidelity, Banc First, Midfirst Bank, RCB Bank, and IvesTrust. Other groups with representation include hospitals, advertising agencies, law firms, and oil interests. Prominent Democrat politicians in the group include former Governor Brad Henry, former Congressman Dan Boren, and former Attorney General Mike Turpen.

What is missing from the group, however, are many of the average Oklahomans, whose taxes will be raised, and who do not get either generous tax credits or largesse from the state. The question naturally arises: Will the legislators pay more attention to Big Media, Big Banks, and Big Oil, or to these hard-working average Oklahomans?

The publicity generated by the group has paved the way for Gov. Mary Fallin to officially join in the effort. On January 19, the governor amended her call of the Second Special Session of the 56th Legislature, which has been in recess since December 22. The governor did not set a date when lawmakers would return to address the shortfall in the current fiscal year budget. “Discussions are continuing about a revenue and reform plan, which seems to be growing in momentum,” said Fallin.

In reference to the efforts of Step Up Oklahoma, Fallin said: “We’re excited that we have an opportunity to build some grass-roots support among our fellow Oklahomans to solve our budget crisis, to be able to put Oklahoma on a stable path forward, and to provide teachers a much-needed pay raise.”

The governor’s amended call asks lawmakers to consider providing a long-term revenue solution to the state’s budget shortfalls by:

Increasing the tax on cigarettes, and little cigars by $1.50 per pack, and an additional 10 percent on chewing tobacco and e-cigarettes;

Increasing the oil and gas gross production tax by increasing the rate on wells currently at 2 percent to 4 percent, and all future wells will begin at 4 percent for 36 months and move to 7 percent thereafter;

Implementing a renewable generation tax at $1.00 per MWH;

Increasing the rate on diesel and gasoline by 6 cents per gallon;

Imposing a dollar cap on transferability/cash refundability for coal, wind and railroad tax credits effective the 2018 tax year;

Expanding the definition of covered games in the model tribal gaming compact to include “non-house-banked table games;” and;

Reforming rates, exemptions, deductions and credits on the individual income tax code.

Other items in the governor’s call are:

Creating an accountability office designed to expose waste, fraud and abuse of taxpayers’ dollars in state government;

Modifying the structure of state government and increasing accountability by replacing the appointing power of specified boards and commissions with granting the governor direct appointing authority over these specified agency directors. This can be accomplished by statutory change or by referring a constitutional change to a vote of the people when necessary, and;

Addressing a needed $5,000 pay increase for certified education staff, excluding any superintendents.

The items in the governor’s amended call for the Second Special Session mirror many of the items recommended by Step Up Oklahoma. “I appreciate the efforts of these business and community leaders working together to build statewide, nonpartisan support to help the Legislature address teacher pay raises and fix our budget crisis,” Fallin said. “It is critical to our state’s future to fix the budget’s structural problems and put our state on a predictable, stable foundation for success. I’m optimistic, with the effort and determination shown by Step Up Oklahoma, that lawmakers can pass a realistic solution to the state’s current budget problem.”

But, GOP Candidate for Governor, Gary Richardson, is blasting the Step Up Oklahoma plan. “A much more appropriate title for this absurd plan would be ‘Pay Up Oklahoma’,” Richardson says. “I don’t see how lawmakers can morally justify raising taxes when it is glaringly obvious they are mismanaging the money we already gave them. I’m shocked to see people calling themselves Republicans while advocating for the largest tax increase in the history of Oklahoma. True conservatives need to rally together, reject the tax hikes that fund corporate welfare, and elect a Republican Governor who is truly dedicated to the principles of the party.” Richardson has released an ad running on both social media and radio exposing the flaws of the plan. It will be interesting to see what position other candidates will take on the plan.

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