Tuesday, February 13, 2018

Platform Caucus comments on failure of Step Up plan, propose alternatives

OK Republican Platform Caucus Comments on 
Failure of Step Up Oklahoma Plan

OKLAHOMA CITY – Yesterday, the Oklahoma State Legislature said NO to one of the largest tax increases in Oklahoma history – a tax plan proposed by the Oklahoma Step Up Coalition. This tax increase was being advertised as the only way to pay for a classroom teacher pay raise; a statement that simply is not true.  There are other options.

The bills proposed by Step Up Oklahoma represent the largest tax increase in over a generation – taking approximately $704 million dollars from the pockets of hard-working Oklahoma taxpayers to fund a $280 million teacher pay raise plus $424 million worth of projects for special interests and government agencies.

When President Trump pushed through the massive tax reform package less than two months ago, the result was an immediate economic resurgence as businesses and individuals realized they would have more money to invest and spend.

Step Up Oklahoma does Just the opposite of the Trump plan. While the coalition originally proposed a variety of free-market reforms, many were dropped in an effort to build a broader coalition.

The bills raise taxes through what Dr. Tom Coburn referred to as sham income tax reforms* that:
  • $41 mil  Increase the Standard Deduction Every Time you File Your Taxes April 15
  • $101 mil  Limit/Reduce the Itemized Deduction every April 15
  • $133 mil  Increase the Gross Production Tax
  • $173 mil  Gas and Diesel Fuel Tax
  • $256 mil  Tobacco Tax
It is estimated that Oklahoma could benefit from the Trump tax cuts by approximately $2.3 billion. It is unfortunate that lawmakers and special interests are so quick to try and grab that money.

Our economy is finally recovering from the devastating crash in oil and natural gas that began in 2014 and continued into 2016. As oil prices have begun to recover, revenues to the state have been up dramatically over past months.  Next week the Governor’s office reports how much money we will be able to appropriate for this coming year – these are called the ‘certified funds.’  We expect the certified funds to be up significantly compared to a year ago meaning that it makes no sense to pass a massive tax increase one week before we learn we have a budget surplus.

While the OK Republican Platform Caucus has taken a strong position against government waste and tax increases, we have been diligent to work for almost a year to find ways to balance the budget, promote government reform, fund core services and pay for a classroom teacher pay raise.

Some of these ideas include:

  1. Classroom Teacher Pay Raise – The CLO (Commission Land Office) has a current balance of $2.4 billion in assets and generated $322 million in 2017. This income stream would more than cover a teacher pay raise.
  2. Medicaid Audits (Arkansas recently audited Medicaid recipients and found 80,000 recipients no longer eligible to receive services. Similar audits in Oklahoma could save approximately $240 million per year. )
  3. TSET Reform – The tobacco endowment is currently valued at $1.3 billion. Income from this endowment is approximately $50 million per year and ongoing settlement funds from the tobacco companies are approximately $40 million. We propose using this $40 million to fund direct residency programs for our teaching hospitals.
  4. SWAG – the Oklahoma state agencies spend approximately $40 million on promotional throw away items.
  5. Agency Audits
  6. We do not support the repeal / modification of State Question 640.

Members supporting this press release include:

Rep. Chuck Strohm
Rep. Sean Roberts
Rep. George Faught
Rep. John Bennett
Rep. Rick West
Rep. Jeff Coody
Rep. Tom Gann
Rep. Scott McEachin3

*Reference to an op-ed written by Dr. Tom Coburn in The Oklahoman titled “In Oklahoma, treat the cause of the problem.”


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