Key issues left to be resolved in legislative session

BY WAYNE GREENE World Senior Writer
Sunday, May 20, 2012
5/20/12 at 7:40 AM

OKLAHOMA CITY - With no more than five days left in the regular legislative session, some key elements of state policy are not resolved.

Here's a look at three key storylines to follow during this urgent last week.

Taxes: Gov. Mary Fallin and legislative leaders unveiled a plan to cut personal income tax rates Thursday night, and the package got through its initial committee test Friday afternoon. But it is yet to be debated before the full House or Senate.

Democrats are likely to argue that with public schools starving for more funding, roads in need of repair and other key state priorities unmet, the state can't afford to cut one of its key revenue sources.

Rep. Joe Dorman, D-Rush Springs, also argues that the bill would result in tax increases for 250,000 Oklahomans, and therefore, can't be imposed without a legislative supermajority or a vote of the people - which suggests that a legal argument might follow next the legislative one.

During initial legislative hearings, some Republicans were also questioning the revenue impact of the bill, which would cut the state's top income tax rate to 4.8 percent for two years and set a trigger for a reduction to 4.5 percent in 2015 if state revenues go up sufficiently.

Also, some tea party Republicans may argue that the tax package doesn't go far enough. It doesn't set the stage for an elimination of the income tax over time, which was a centerpiece of other bills proposed this year.

Budget: The tax package would resolve the state's income question, but the issue of outgoing money remains a good deal less clear.

Friday's budget negotiations between top GOP leaders resulted in no announcements, suggesting House and Senate leaders may be further apart than things seemed Thursday, when the tax deal was announced in a temporary Era of Good Feelings.

House Speaker Kris Steele, R-Shawnee, has backed bills to reform the state's criminal justice and human services programs. He isn't likely to allow those initiatives to go without sufficient money.

Schools and higher education are pushing for more funds too, and Gov. Mary Fallin has promised that core government services, which would also include roads and public safety, will be adequately funded.

Then there's the question of state bond packages, with the state Capitol ($200 million), the Native American Cultural Center in Oklahoma City ($40 million), the Oklahoma Popular Culture Museum ($42.5 million) in Tulsa and several other projects vying to get last-minute debt-backed funding.

Loose ends: Every legislative session includes a flock of final days' bills. Some fly to the governor's desk. Others fall from the sky.

Steele's Department of Human Services reform package is still pending. It will take some time to get final legislative approval on the four bills and a resolution calling on voters to abolish the Human Services Commission.
Another resolution would ask voters to do away with taxes on intangible personal property, an esoteric element of tax law that could turn into political mischief.

The idea has been presented as a simple fix to a problem raised by a state Supreme Court ruling that was going to force county assessors to look at squishy assets, such as corporate goodwill. But last-minute revisions in the proposal's language have raised Democratic suspicions that there may be more at work.

The long-pending bill to eliminate the Oklahoma Board of Commercial Dog Breeders and its rules, and transfer the duties of licensing and regulating pet breeders to the state Department of Agriculture, is pending final legislative approval in the Senate. It hasn't stirred much controversy, but it still lacks its final stamp vote.
A late-session proposal to ease the impact of the state's end-of-instruction exams has a longer road ahead of it and not much time to get there.

The graduation testing law has been in place for years, but this is the first year for diplomas to be denied to high school seniors who don't pass four of the seven exams. The proposal would allow school boards to exempt up to 3 percent of their seniors, if they have passed three of the seven tests.

Neither the House nor the Senate have voted on the proposal, although a House conference committee signed off on it Thursday evening.

The state Constitution requires the regular legislative session to adjourn by 5 p.m. Friday. A special session could extend the process, but with legislators facing an earlier election schedule this year - the primary election is June 26, five weeks away - look for a rush to get everything done as quickly as possible.

Key points of the GOP state tax bill

Top state income tax rate goes from 5.25 percent to 4.8 percent for 2013 and 2014.
Seven tax brackets reduced to three:

Rate	Single filers	Married filers
1 percent	first $2,500 of taxable income	first $5,000 of taxable income
3.3 percent	subsequent $5,000	subsequent $10,000
4.8 percent	All income from $7,500	All income from $15,000

If revenue from five key state taxes - personal and corporate income tax, sales and use taxes and motor vehicle tax - rise 5 percent from fiscal year 2013 levels, income tax rate will fall to 4.5 percent in 2015.
Personal exemption of $1,000 per dependent on adjusted gross income eliminated for single filers earning more than $35,000 or married filers earning more than $70,000.
State taxpayers no longer allowed to take deduction for state income tax and sales taxes paid. (Previously, state taxes that were itemized on federal income taxes could also be deducted on state income taxes.)
Elimination of political contribution deduction.
33 tax credits eliminated. Many of the tax credits are small, rarely used credits, such as the sale of national historic landmark credit and the competitive livestock show award credit.
Estimated impact to state personal income tax collections: $32.7 million, fiscal year 2013, $102 million, fiscal year 2014.

Original Print Headline: Key issues left to be decided in session

Wayne Greene 918-581-8308
wayne.greene@tulsaworld.com