BY DAVID AVERILL Editor, Editorial Pages
Sunday, April 22, 2012
4/22/12 at 3:39 AM
The Oklahoma Senate last week approved, 31-15, a bill that would reduce the state's top income tax rate to 4.95 percent from the current 5.25 percent. The measure also includes triggered reductions that eventually would eliminate the personal income tax altogether.
If it becomes law, the bill could cost the state about $56 million in fiscal 2013 and $144 million the following year and ever after.
The numbers aren't important because this bill is only one of several income tax-cutting measures floating around in the Legislature and the final figures will be determined by a joint Senate-House conference committee.
Most, if not all, of those measures would eliminate the personal income tax; they differ only in how quickly they would do that. To put this into perspective, income taxes, personal and corporate, provide about a third of total state revenues. And about a third of state revenues go to the public schools.
Arguments on behalf of the bill Tuesday were the same ones always made by the anti-taxers.
"It is not our dollars," said Sen. Gary Stanislawski, R-Tulsa. "It doesn't belong to us. It belongs to the people of the state of Oklahoma."
That statement is not original with Stanislawski. It's Republican dogma, a mantra chanted, at every tax-cutting ceremony such as Tuesday's Senate session. Of course, it's not true.
The Oklahoma Constitution, Article X, Section 2, authorizes - indeed, requires - the Legislature to raise taxes to "defray the estimated ordinary expenses of the state for each fiscal year." Tax dollars that are legally levied and collected by the state no longer "belong" to individual taxpayers. They belong to the collective Oklahoma.
"People can spend their dollars more wisely than we can as a state entity," Stanislawski continued.
That might be true but an individual Oklahoman, no matter how wise his or her expenditures might be, couldn't do much in the way of building and maintaining a highway system or a public safety department. Nor could they, as individuals, "establish and maintain a system of free public schools wherein all the children of the state may be educated," as the Legislature is charged (Article XIII, Section 1).
The whole idea of having a government is that individual citizens, whether they like it of not, chip in their fair share so that the collective state can provide the necessary services that individuals cannot provide for themselves.
The author of the bill, Sen. Clark Jolley, R-Edmond, added that his constituents believe they are overtaxed. Of course they do - they've had that knee-jerk response reinforced often enough by pandering lawmakers.
The last time a state tax increase of any significance was passed by the Legislature was in 1990. That was the historic education reform and revenue measure, House Bill 1017. It increased state sales and income taxes by about $230 million to pay for reforms including smaller classes, improved teacher pay and higher school accreditation standards.
HB 1017 narrowly passed the Legislature but opponents launched an initiative petition campaign to challenge it. Oklahomans, however, ratified the bill in a statewide vote.
Opponents of HB 1017, stung by their defeat at the polls, launched an initiative petition drive for a constitutional amendment that requires a three-fourths majority of both houses of the Legislature - a virtually unobtainable margin - or a simple majority vote of the people to pass a revenue bill. That measure, State Question 640, was adopted by voters in March 1992.
Since then there has been one state tax increase, a cigarette tax hike, and it was approved by a vote of the people in 2004. An attempt to increase gasoline and diesel fuel taxes, to pay for highway and bridge improvements, was soundly defeated by voters in 2005.
A legislative reform of the motor vehicle tag system in the late 1990s was supposed to be revenue neutral, but it actually resulted in a significant decline in tag fees.
Meanwhile, over the past five years the Legislature has been steadily whacking away at the state personal income tax top rate.
State services, including the so-called core services like education and public safety, have paid and will continue to pay a stiff price. A recent study by two respected economists, Robert Dauffenbach of the University of Oklahoma and Larkin Warner of Oklahoma State University, revealed that reductions in income tax, motor vehicle tax and state sales tax lost to Internet sales have cut Oklahoma tax collections by $1.9 billion a year.
And so we see public education being strangled, as local districts are forced to close schools, lay off teachers, increase class sizes and eliminate programs such as art, music and advance placement courses.
Maybe the anti-taxers are right. Maybe we ought to take all those tax dollars away from the Legislature and let individual taxpayers fend, wisely, for themselves. Couldn't be much worse than it is.
David Averill, 918-581-8333