Two years after the blood-letting required to increase state taxes modestly and amid yet another financial shortfall that threatens to short-change schools and other essential state services, the Oklahoma Legislature is once again on the cusp of cutting taxes.
But don’t worry, they say, it’ll actually increase state revenue.
Ha! We didn’t believe it when they made that claim as they whittled away the state income tax (and we were right), and we don’t believe it now.
The latest voodoo tax scheme — approved by the state Senate last week and sent to the House for consideration — would cut taxes on car sales. The measure would allow a buyer with a trade-in to have the trade-in allowances deducted from the new or used vehicle price for tax purposes.
In 2017, the Legislature removed a sales tax exemption on car sales that helped generate $123 million. The increase was part of a larger package of tax increases and spending cuts that helped the state deal with an $878 million budget hole. It took a bloody legislative fight to accomplish that, and now lawmakers are working to undercut it.
Legislative supporters of Senate Bill 1619 claim it would result in more car sales and more state revenue, but that argument is undermined by an analysis by the Oklahoma Tax Commission, which shows it would mean the state would have $11 million less to appropriate to schools, roads, public safety and health next year and $16.6 million less the subsequent year.
Remember, the state already is expecting to have $85.5 million less to appropriate for the fiscal year that begins July 1 and, against all sense, the governor is determined not to spend $100 million that is available for appropriations.
We’re in a hole, but the Legislature is calling for more shovels.
Here’s the outrageous thing about taxes in Oklahoma: It takes a supermajority to raise them, but only one vote over 50% to cut them. That’s like having a financial suicide pact built into the state Constitution.
If SB1619 is a good idea that the state is compelled to pass, do so with a three-quarters majority and pair it with some other tax increase to help solve the state’s financial problems.
Otherwise, it’s financial malfeasance.