Democratic Leader in the Oklahoma House Calls State of State Speech an Admission of Fiscal FailureTue, 02 Feb 2016 06:12:28 CST
After signing into law a series of irresponsible tax cuts and exemptions that helped carve a billion dollars out of the state treasury for the benefit of Oklahoma’s wealthiest citizens, Governor Fallin now wants to recoup that revenue by imposing tax increases on middle-class and lower-income families, House Minority Leader Scott Inman asserted Monday.
“For more than a year, the governor has maintained that Oklahoma doesn’t have a revenue problem,” Inman said. “And just last week, House Speaker Jeff Hickman told State Capitol journalists that Oklahoma doesn’t have a revenue problem, it has a structural budgeting problem.”
Yet Monday, in her “State of the State” address, the governor called for $900 million in “new, recurring revenues for appropriations,” Inman noted. “That’s government-speak for tax hikes,” the Del City Democrat said.
“Apparently the governor has finally discovered what we’ve known all along: we can’t cut our way to prosperity.”
House Democrats tried repeatedly last year to delay the latest income-tax cut that shaved the top rate from 5.25% to 5%, “but House Republicans – all 71 of them -- rejected that idea.” Consequently, with the State of Oklahoma facing a $900 million revenue shortfall in Fiscal Year 2016-17, state revenues will be reduced by $57 million over the next six months, $147 million next year, and almost $200 million in Fiscal Year 2018.
Gross receipts to the State Treasury in calendar year 2015 were less than receipts during the prior calendar year, “the first time that has happened since the end of the Great Recession in 2009,” State Treasurer Ken Miller reported.
But rather than roll back the “fiscally irresponsible” income-tax cuts, the governor recommended a potential tax increase on farmers and ranchers, churches and civic groups, through the elimination of vital sales-tax exemptions. She doubled-down on her tax increases by proposing an Internet sales tax, more than doubling the cigarette tax, and levying a new tax on things like haircuts and visits to doctor’s offices.
“What the governor proposes to do is shift the tax burden to middle- and lower-income Oklahomans, who already shoulder an inordinate share of taxation in this state,” Inman said.
In an analysis of the tax systems in all 50 states, the Institute on Taxation and Economic Policy discovered that the bottom 80% of Oklahoma households pay 2 to 2.5 times as much of their income in state and local taxes as the wealthiest 1% of Oklahomans do. The 20% of Oklahomans who have the lowest incomes (less than $18,000/year) pay an average of 10.5% of their income in taxes, while the top 1% of Oklahomans ($418,000+/year) pay just 4.3% of their income in taxes.
At no point in her speech did the governor mention state tax credits and tax exemptions that drain nearly $2 billion from the treasury, Inman added.
Inman predicted that the budget the Legislature approves this year will be “the worst in a generation for public education and for health care.”
To make the education funding crisis even worse, the governor endorsed education vouchers, which would “siphon off” public funds from public schools and reroute it to private schools.
In addition to her voucher plan, the governor suggested closure of more than 100 of Oklahoma’s rural schools, which would have the effect of killing off 100 of our small communities around the state.
As if closing rural schools weren’t enough, Fallin also proposes to allow school districts to finance operational expenses from their building funds, which are generated from ad valorem taxes. “That’s just a back-door plan for shifting the burden of public education from taxpayers statewide to local property owners, such as farmers and ranchers and homeowners,” Inman said. “In many cases it would be an unbearable burden on Oklahoma’s agriculture community.”
Already the Republican-controlled Legislature has diverted millions of dollars previously earmarked for new textbooks and other educational materials to school operating expenses; as a result, many schools are using tattered textbooks that are as much as 10 years old and held intact with tape. In addition, class sizes have increased dramatically because of a chronic teacher shortage in Oklahoma while enrollment has grown by 51,000 students over the past eight years, and schools have been burdened with myriad mandates, Inman related.
The governor mentioned nothing about health care, Inman emphasized. The Oklahoma Health Care Authority, for example, has had its budget cut by $446 million in the past five years and has reduced provider rates. These cuts have a ripple effect across the state “as they impact providers, especially in areas where the majority of the population is Medicaid-eligible, and they jeopardize rural hospitals that are at risk of bankruptcy,” Inman said.
The OHCA administers health care programs for more than 800,000 Oklahomans, including more than half a million children.
Finally, the governor was “radio silent” about earthquakes that are shaking homes and businesses throughout northern and central Oklahoma, Inman pointed out. “She’s politically tone deaf” on that issue, he said.
The Oklahoma Geological Survey logged 5,816 earthquakes across the state last year. Data reflect that 905 of them were of magnitude 3?, and 29 of those were rated magnitude 4?. In comparison, Oklahoma recorded an average of 1.6 earthquakes of magnitude 3? over a 30-year period: 1978-2008.
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