Bartlesville School Board proposes $700M alternative to OEA's $3.3B plan

Amid the talk of a statewide teacher walkout and/or suspension of public school operations over teacher pay and education funding, the Bartlesville Public Schools Board of Education has released a "compromise" plan that they feel is much more realistic than the demand issued by the Oklahoma Education Association teacher's union.

While the OEA is calling for a $3.3 BILLION increase in state spending while not giving any suggestions on how to pay for it, the Bartlesville "The Time Is Now" plan is putting forward tax increase ideas to pay for a $700M increase that would include a teacher pay raise and additional money for education and other areas of state government.

The entire plan, as well as the Bartlesville School Board's arguments for it, can be found at TimeIsNowOK.com. While I might not agree with their plan, I give them credit for recognizing the sheer absurdity of the OEA's unrealistic proposal and putting together cogent arguments for a more restrained and realistic ask than the OEA's fantasy.

Even so, the Legislature did not have enough votes a month ago to pass a tax hike package that was $100M smaller than the Bartlesville plan.

Here are the main points of the Bartlesville plan (also viewable here):

They even include comparisons of their plan to the Step Up Oklahoma plan that failed in the State House, and the OEA's absurdly unrealistic plan.

'The Time Is Now' vs. 'Step Up Oklahoma' (click image to view larger):

'The Time Is Now' vs. the OEA's 'Together We're Stronger' plan (click image to view larger):

The Bartlesville School Board released this plan today at their board meeting today. You can read more of their arguments and reasonings at the website they've set up: TimeIsNowOK.com.

Coburn Joins Conservative Legislators in Proposing State Budget Reforms

Coburn Joins Conservative Legislators in Proposing State Budget Reforms

OKLAHOMA CITY – Several conservative Republican State Representatives today joined with former U.S. Sen. Tom Coburn in proposing a path to a teacher pay raise without a tax increase.  The statement is below.

We appreciate the members of Step Up Oklahoma for their civic leadership in addressing the issue of balancing our state budget, raising teacher pay and reforming state government processes. We share their goals. We want to provide teachers a $5,000 pay raise and are confident there will be a permanent teacher pay raise this year with or without a tax increase. We also must balance our budget, which will also happen with or without a tax increase. And, we agree with reforming state government to cut out wasteful spending.

We agree with most of the means chosen by Step Up Oklahoma to accomplish these goals: cutting wasteful subsidies to industrial wind companies; allowing the governor to appoint agency directors, and several of the other ideas furthered by Step Up Oklahoma.

We also believe that the people of Oklahoma are rightly suspicious of state government.  The Health Department scandal shows that there still is a great deal of wasteful spending, “bloat” and “mission creep,” and even corruption in state spending.

The Office of Management and Enterprise Services (OMES) has over 1,200 employees who are supposed to catch such wasteful spending and root it out, but they failed.  Recently, the whistleblower in the Health Department scandal accused former OMES Director and Gov. Fallin’s Secretary of Finance Preston Doerflinger of grand jury tampering and witness intimidation. If this is how the head of OMES treats whistleblowers, it begs the question:  how many other whistleblowers have been discouraged from bringing wasteful spending to light?

Before raising taxes on Oklahomans, we must make sure state government is spending current tax money wisely, with real performance audits.  But a bill to empower the State Auditor’s Office to conduct real performance audits on agencies was vetoed by Gov. Fallin at Doerflinger’s request.

There are many ways to balance the budget and give teachers a $5,000 pay raise, the combined cost of which is about $760 million. Just last Thursday, it was announced that state revenue is up $812.5 million over last year due to the improving economy.

Moreover, a bill held over from last year, for Medicaid audits, would remove people no longer eligible for Medicaid in Oklahoma.  This one bill would generate savings of at least $86 million, and as Arkansas’ recent experience shows, more likely up to $240 million, which savings could be applied to more efficient uses in our budget.

Cutting out corporate welfare subsidies to the wind industry, often owned by foreign companies, could generate up to $172 million annually.

Using existing funds from the Commissioners of the Land Office could also provide additional millions for a teacher pay raise, without reducing any current payments to school districts and without dipping into the current principal corpus of the School Land Trust.

The Legislature could right now afford the $760 million needed for a $5,000 teacher pay raise and balance the budget without a tax increase.

And there’s more. For each $1 allowed in the Opportunity Scholarship Tax Credit, $2.58 is generated for scholarships and $1.24 is saved for the state budget, due to leveraging private donations for education. We should increase the current cap on such scholarship credits.

Up to $95 million of annual revenue from the Tobacco Settlement Endowment Trust (TSET) is currently used on such wasteful things such as ads for smoke-free strip clubs and drag shows, and billboards against soda pop. These funds could be rerouted to more efficient uses, also.  This reform would require a vote of the people.

School districts could be allowed flexibility to use any part of their property tax revenue on teacher pay if they wished, instead of being restricted to current uses such as buildings. This reform also would require a vote of the people.

Administration costs in our state’s colleges are 70 percent higher than the national average. Reducing such administrative costs to the national average would save the state over $300 million per year.  Currently, legislators are prohibited from making such line-item appropriations to the Regents for Higher Education.  A vote of the people would be required to allow line-items on the Regents’ budget.

There are many ways to reform our education system to make sure more of our tax dollars are going to teacher pay, rather than to excessive administration and other non-teacher costs.

Bills on all these topics have been introduced this session, but are awaiting committee hearings.

“For too long, bureaucrats have grown Oklahoma state government without being audited.  The sensible reforms offered here will help raise teacher pay and right-size Oklahoma’s government without a tax increase.  Medicaid audits, eliminating corporate wind subsidies, TSET reform, and better use of funds from the Commissioners of the Land Office are common-sense proposals that are long overdue,” Coburn said.

Let’s demand performance audits on the agencies and schools and cut out the waste before we increase taxes. We can still give a $5000 pay raise to teachers and balance the budget in the meantime.

Republican Lawmakers who are a part of this plan include:

Rep. Kevin Calvey
Rep. Scott McEachin
Rep. Bobby Cleveland
Rep. Kevin West
Rep. John Bennett
Rep. George Faught
Rep. Tom Gann
Rep. Rick West
Rep. Jeff Coody
Rep. Mike Ritze

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.”

Teague: Step Up tax hike was irresponsible, unstable

State Rep. Tess Teague (R-Choctaw) posted these thoughts after the failure of the Step Up Oklahoma tax hike bill, HB1033XX.

Rep. Tess Teague:

Today, as you all know, the Oklahoma House of Representatives voted on the tax increases that were part of the Step Up Oklahoma plan put together by a coalition of businessmen. The tax increases would have totaled $723 million and would have represented the largest tax increase in state history.

The vote was held open until 11:00 p.m. tonight and did not pass. The final vote was 63-35. Being that it needed 76 aye, the bill has failed.

I voted no.

I heard from many people in this district before the vote, during it and afterwards. While I know some were for it - and who can blame teachers for wanting (needing) a pay raise and advocating for this legislation - most of this district was against it. I have been on the doorsteps this interim and last week during the evenings after session. I've been in your living rooms discussing the budget and tax increases. Today when I went to the Capitol to vote, I took those conversations with me. I stood up against Step Up. While teachers certainly need a pay raise, the Legislature owes it to this state to make sure that happens the right way and we owe it to hard working taxpayers to be respectful of your hard earned dollars and not rob you of it.

I cannot in full conscience vote on such a massive tax increase package because I believe it is irresponsible governance to ignore the systematic issues that got Oklahoma into this mess and stick my hands into taxpayer's pockets to solve budget woes. Band-aid taxation is not and will not be the answer. This tax package would have raised, among other things, your income tax and your gas tax. Why have business leaders with above average salaries put together a plan that puts the financial burden on working class Oklahomans? Average salaries of my neighbors in HD101 look a lot different than this coalition. This is how we're supposed to step up? The onus is not on citizens - it is on the Legislature.

It might interest many of you to know that state tax collections are running ahead of schedule for this fiscal year and our economy is ticking up (not to mention, many of the bills we passed in regular session and in the special sessions raised a lot of revenue) and we are actually about to find out in about a week and a half that we have a surplus. I hear that number will be somewhere in the range of $170 million. Wondering why this plan was being rushed through with the utmost emergence right now and just could not wait?? Because how silly would it be to let that news come out and then try to play like we still needed it. When I have money in the bank, I don't ask for a loan and neither should our state. State revenue is up $815 million over the last year, which is enough to balance the budget and give teachers a $5,000 pay raise without a tax increase.

I've also been asked, "You voted no, so what's your solution?" There are so many answers to that. The most obvious being that waste, fraud and abuse is not just a hypothetical, but a proven issue in our state agencies and we have got to get control of our state government. Yes, we need audits. Yes, we need investigations. Yes, this will save money and stop the bleeding. No, it's not the only solution. There are countless other reforms including, but not limited to, BTU tax on oil (60% of this would be paid by people out of state and would net a $1 billion return if not more), using existing funds from the CLO could pay for a $5,000 teacher pay raise, TSET funds could be used, administrative costs in higher education could be brought to the national average and would save $300 million per year. The list goes on. I've been repeating today that although the future looks bleak and it might not seem like there is light at the end of the tunnel, it's only the second week of session. Now that the Step Up plan has been defeated, I believe the Legislature can get back to work on something that can pass without harming the hard working taxpayer.

I'd also note that I find it so incredibly strange that we were ready to attach a teacher pay raise to an unstable income source. The state relied too heavily on oil and gas and when it tanked, so did the state. If we attach our teacher pay raise to something with such fluctuation, can we really consider it stable? Or what about the cigarette tax? Wasn't the incentive for the cigarette tax cessation? Aren't we passing this tax to get people to stop smoking? Well if people stop smoking...then the tax money stops coming in. So....there goes the pay raise. I can't believe this seemed like a viable option. Teachers, you deserve better!

I want to thank those of you who have interacted with me and called my cell phone, called my office, sent emails, reached out on Facebook, or given me tea and soda when I stop by your house! I want to especially thank you for your understanding and patience as I go through all of my correspondence and write each and every one of you back. I want to make sure I give everyone the time they deserve. As you can see from this post, the explanations get lengthy.

As always, I welcome your feedback, thoughts, questions, concerns, etc.

Teague represents House District 101, which covers portions of southeastern Oklahoma County.

McGuigan: Will Oklahoma take a faulty Step Up, or use growing revenues wisely?

Broken promises and good government – Will Oklahoma take a faulty Step Up, or use growing revenues wisely?

by Patrick B. McGuigan, CapitolBeatOK.com

OKLAHOMA CITY – The state House may vote, this week (perhaps even on Monday, February 12) to increase state revenues by about $700 million.

If envisioned proposals from the Step Up Oklahoma group are ultimately enacted, the final bell will toll for promises made in the historic campaigns of 2010 and 2014, when Governor Mary Fallin and others in the Grand Old Party pledged to right-size government.

Last month, Lt. Gov. Todd Lamb said he was against the Step Up plans. Soon, every Republican candidate for the state’s chief executive post had reasserted or for the first time stated clearly opposition to the Step Up ideas.

Some thought I endorsed Lamb’s gubernatorial campaign when I praised his comments, but I did not and have not.

I have more frequently credited “the two Garys”  – Tulsa lawyer Richardson and Auditor & Inspector Jones – for advocating investigative audits of government agencies.

As the great Oklahoma publisher Leland Gourley often said, commentaries/editorials are one person’s opinion.

An informed opinion follows: I believe it amounts to imposition of a “fraud tax” or “fraud fee” on taxpayers to increase taxes without stricter scrutiny of government agencies. That scrutiny should come first, not tax hikes.

I respect the motivations of those with contrary views, even when some do not respect mine. Spending scandals in government are not inevitable. All the cost-drivers in Oklahoma government should be regularly (and independently) audited. They are not.

In a recent survey for the Step Up group, Bill Shapard’s Sooner Poll found strong majority support for the organization’s tax proposals. He presented his analysis to reporters and advocates of the plan last week (http://s3.amazonaws.com/content.newsok.com/documents/Step%20Up%20Oklahoma%20Sooner%20Poll%20report.PDF).

On the flip-side, opponents of tax hikes were intrigued, over the weekend, when John Collison circulated a one-question poll (www.1q.com) of 400 Oklahomans. He says, “almost 70 percent of Oklahomans would vote AGAINST their elected representatives if they raise taxes.” (http://nonewoktaxes.org/wp-content/uploads/2018/02/Doc1.pdf)

In political circles, pollsters whisper there is strong majority opposition to tax hikes among Republicans most likely to vote. This is well-known in the political class, but the numbers have not circulated.

Few news organizations noted a critical study of the Step Up plan conducted by the venerable Tax Foundation. As I reported in January, the foundation said envisioned changes would make the state tax system "more complex and progressive, not simpler or more neutral." (http://www.capitolbeatok.com/reports/tax-foundation-critiques-step-up-oklahoma-tax-plan)

A spokesman for Step Up did not return my multiple requests for comment on the critique from the Tax Foundation, which has studied fiscal and tax policy since 1937.

Not exactly obscure is the impressive growth in Oklahoma state government revenues as the oil and gas recovery advances, and the rest of the state economy grows.

I’ve given Treasurer Ken Miller (who supports the tax hikes, I’m told) a lot of grief for particular ideas these past seven years, but I respect the methodical and meticulous economist.

He’s no doubt enjoyed preparation of his recent monthly reports.

Gross receipts to the Oklahoma Treasury surged 12 percent in December, and jumped 6.2 percent for all of 2017, Miller has reported. In the state’s largest (and capital) city, sales tax revenues jumped 7.8 percent in December.

Then, for the January analysis, the good news got even better. Collections early in the New Year topped the same month of 2017 by more than 15 percent. The total tax receipts of $1.1 billion were big news – and the 12th time in 13 months that revenue increased. Prior to January 2017, monthly receipts had contracted for 20 consecutive months. (http://www.capitolbeatok.com/reports/treasurer-ken-miller-reports-monthly-gross-tax-receipts-enter-second-year-of-growth)

The state’s economy has rebounded, and that’s good news. This cause for celebration should mark a time for serious study of how to use growing revenues wisely. Instead of enhancing good economic trends, Oklahoma seems about to endorse a broken model of governance.

Many in the Legislature seem determined to raise taxes this year, as prelude to raising them next year.

The catalog of broken promises continues to grow.

Enough is, indeed, enough.

An award-winning journalist with more than three decades of experience in news reporting, policy analysis and commentary, Patrick McGuigan writes at CapitolBeatOK.com.

BONUS -- more from Bloggers Organized for Oklahoma Taxpayers:

• Step Up Oklahoma; Step Down For Oklahoma Taxpayer [Tapp Into Common Sense]
• Fun teacher-pay facts [Choice Remarks]
• The Rush To Raise Taxes Before the Treasurer Tells Us The Crisis Is Over [Sooner Politics]
• Fiscal Conservatism Is The Answer To Oklahoma Budget Woes [Tapp Into Common Sense]

House JCAB passes $620M in tax hikes, ready for floor vote

Yesterday afternoon, the House Joint Committee on Appropriations passed several tax-increasing measures in preparation for a likely floor vote on Monday. These bills were elements of the Step Up Oklahoma plan being pushed by the Governor.

HB1033XX: $581M in new taxes (~$243M in cigarette tax, ~$172M in fuel taxes, ~$133M in GPT increase, ~$20M in wind energy tax, ~$14M in cigars and smokeless tobacco)
HB1034XX: caps the coal tax credit at $5M per year
HB1035XX: caps the zero-emission (i.e. wind power) credit at $18M per year
HB1036XX: caps the railroad modernization credit at $2M per year
HB1031XX: expands gambling, may bring in $22M per year
HB1037XX: changes in standard deduction ($40M in new income tax collections). More on this here.

If you opposes raising taxes or expanding gamling, contact your legislator before Monday.

• Find your legislator's contact info
• Send the AFP-Oklahoma letter to your legislator
• Send the OCPA letter to your legislator

HB1037XX update: bill changed to deduction split, still raises taxes

Yesterday, the House JCAB met and passed several "revenue measures" (i.e. tax increases) related to the Fallin/Step Up Oklahoma plan. Among these was HB1037XX, which I wrote about in Fallin/Step Up income tax hike is higher than we're being told.

HB1037XX was originally a major income tax hike for lower- and middle-income families in particular. The good news is that that language was stripped from the bill in committee yesterday - a small, temporary victory for taxpayers. However, the language was replaced with changes to the standard deduction that will still mean a triple-digit tax hike on single individuals making over $25,000 or married couples making over $50,000.

HB1037XX leaves the standard deduction in place for single individuals who make less than $25,000, for married couples filing jointly who make under $50,000, and for head-of-household filers who make less than $37,500.

If you make above those figures, the standard deduction will be changed to the following levels:

• Single-filer: from $6,350 down to $5,250 (minus $1,100)
• Head of household filer: from $9,350 down to $7,700 (minus $1,650)
• Married filing jointly: from $12,700 down to $10,500 (minus $2,200)

Current bill language does not change the income tax brackets or remove the personal exemption like the previous language did. It does, however, unnecessarily render our income tax even more complicated that it currently is, in addition to raising taxes.

Back to three scenarios I presented in the previous post on HHB1037XX:

• Married couple filing jointly, 2 kids, standard deduction, earning $40k: $0 more in taxes
• Married couple filing jointly, 2 kids, standard deduction, earning $60k: $110 more in taxes
• Married couple filing jointly, 2 kids, standard deduction, earning $80k: $110 more in taxes

Single-filers who make over $25k would pay an additional $55 in income taxes. HOH-filers over $37,500 would pay $82.50 more, and married-filing-jointly over $50,000 would pay $110 more.

The fiscal analysis for this current language estimates it would raise $41M in income taxes for FY2019.

I'll post more on the other tax hikes passed by the House JCAB later.

Fallin applauds committees for passing revenue, reform measures

Governor Mary Fallin Applauds Legislative Committees for Passing Revenue, Reform Measures

OKLAHOMA CITY –  Governor Mary Fallin today commended the House of Representatives and Senate joint committees on appropriations and budget for their support of House Bill 1033XX and other measures dealing with revenue to stabilize the state budget, as well as the House Rules Committee for passing three reform bills: 

“I appreciate the support of both budget committees in approving these vital measures. They will help fill our budget hole for the current fiscal year as well as put Oklahoma on a more stable budget path. They also will allow us to address the funding of core services going forward and provide much-needed pay raises for public school teachers.

“The approval of three reform bills by the House Rules Committee will help bring about reforms to ensure public resources are being spent appropriately.”

Fallin/Step Up income tax hike is higher than we're being told

***TAXPAYER ALERT***

The Legislature is moving to hear HB1037XX, the Step Up/Fallin income tax hike, in the Joint Committee on Appropriations & Budget (JCAB) in both the House and Senate today.

Running the figures IN THE BILL, a married couple filing jointly, with two children, earning $60k per year and taking the standard deduction would pay $187.65 in new income taxes.

Step Up Oklahoma says they would pay "$85 to $97" more, but that is absolutely NOT the case when the actual bill language is examined.

• 2017 State Income Tax under this scenario is $1810
• Under the Fallin/Step Up bill, the tax is $1997.65
• This is an increase of $187.65, 193.45% higher than the Step Up estimate

DETAILS

Scenario: married couple filing jointly, 2 children, taking the standard deduction, earning $60,000 per year.

2017 - current tax code
$12700 standard deduction, $1000 per individual exemption (x4) = $43300 AGI

Married-filing-jointly tax brackets:
0.5% on first $2000 = $10
1% on next $3000 = $30
2% on next $2500 = $50
3% on next $2300 = $69
4% on next $2400 =$ 96
5% on everything above ($31100) = $1555

2017 STATE INCOME TAX = $1810

2018 - new proposed income tax code
$10500 standard deduction, no personal exemptions = $49500 AGI

New married-filing-jointly tax brackets:
0.5% on $0-1999 = $10
1% on $2000-4999 = $29.99
2% on $5000-7499 = $49.98
3% on $7500-9799 = $68.97
4% on $9800-12199 = $95.96
4.6% on $12200-35999 = $1094.75
4.8% on $36000-99999 = 648
5% on $100000+ = $0

2018 STATE INCOME TAX = $1997.65 
$187.65 more in state income tax than current code

Other scenarios

• Married couple filing jointly, 2 kids, standard deduction, earning $40k: $176.75 more in taxes (Step Up said $40 to $48 more)
• Married couple filing jointly, 2 kids, standard deduction, earning $80k: $147.70 more in taxes (Step Up said $85 to $97 more)

Sources for information: HB1037XX
2017 State Income Tax tables
Step Up Oklahoma tax bracket projections

Fallin's budget shows NO FY2019 budget shortfall

An interesting note from page 15 of Governor Fallin's FY2019 Executive Budget proposal:

As the overall economy has improved, the "sky is falling!" projections of a massive, multi-hundred million dollar budget shortfall have lessened and lessened, with Governor Fallin's own budget proposal now showing that the state will have just under $60M more to appropriate than in the FY2018 budget.

Her budget builds on that sum by adding just over $696M in new taxes, and adding $723M in new spending, cutting that $60M surplus over the FY2018 budget in half.


BONUS - here as some recent articles on the Fallin/Step Up tax hikes from Bloggers Organized for Oklahoma Taxpayers:

• Keating: Nothing Should Be Off The Table As Oklahoma Moves Forward [TheOkie]
• OCPA Fallin State of the State; Bloggers Organized for Oklahoma Taxpayers [BatesLine]
• I May Have to Start Voting Democrat [OK Politechs]
• Dan Fisher: Only GOP Candidate Not Receiving Contributions From Step Up [Tapp Into Common Sense]
• ‘We can do better’: Americans for Prosperity pans Oklahoma tax plan [NonDoc]
• The Raw Nerve of it All — Arrogance and Corporate Greed of ‘StepUp’ Plan [SCrosnoe]
• The Band Is Back Together [Tapp Into Common Sense]
• Is It a "Step Up" ... or a Step Down? [Jordan Green Says]

Rep. Hardin Comments on ‘Step Up Oklahoma’ Plan

Rep. Hardin Comments on ‘Step Up Oklahoma’ Plan

OKLAHOMA CITY – Rep. Tommy Hardin, R-Madill, issued the following statement today ahead of expected votes on the revenue portion of the Step Up Oklahoma plan. The proposal, endorsed by the State Chamber and numerous other business groups, enacts $750 million in new revenue.

“My years as an Air Traffic Controller have taught me to refrain from letting your circumstances, fears and emotions – or the fears and emotions of others – affect your judgement in emergency situations. If you do, someone is going to get hurt. Not everyone will arrive safely at the destination.

“As to our current crisis as a state, there are several ideas being discussed behind the scenes. These proposals haven’t been brought forth yet because there are elected officials, companies and other special interest groups that want to capitalize on your circumstances, fears and emotions to achieve the outcome they desire. I want all of us to arrive safely at the destination we expect without taking advantage of, or prospering at the expense of, Oklahomans.

“If I were to vote for the ‘Step Up Oklahoma’ plan, I will have given the power of my constituents over to the special interest groups. Those groups ultimately want to protect their bottom line on the backs of the taxpayers, and allowing them to do so means I would not deserve the position to which I was elected. I would ask that the people of this great state, and more specifically the people that elected me, to allow this slow, frustrating and painful process we call governing to run its course.

“It’s a true honor to continue to serve the folks in House District 49. My goal has always been and will forever be to take care of people – not to protect those who want to take advantage of others.”

Fallin delivers final State of the State, pushes Step Up tax hikes and reforms

Governor Mary Fallin Delivers 2018 State of the State Address

Governor in final message to legislators urges lawmakers to consider reform, revenue plan developed by business and community leaders to address ongoing challenges, provide a pay raise for teachers, and strengthen Oklahoma’s image

OKLAHOMA CITY – Governor Mary Fallin today delivered the annual State of the State Address in front of a joint session of the Oklahoma Legislature. In it, Fallin focused on the urgent need to improve the state’s budgeting process, saying the Step Up Oklahoma plan proposed by a group of community and business leaders is the best option for lawmakers to sufficiently fund education, public safety, health, and the state’s infrastructure needs. Her State of the State Address can be found here. The proposed Executive Budget for Fiscal Year 2019 can be found here.

An historic, defining moment

Fallin, in her final State of the State address, opted not to talk about her accomplishments during her seven years in office. Instead, she urged lawmakers to focus on solving the state’s budget crisis and address important policy goals.

 “Make no mistake about it: This is an historic, defining moment before us. We are in a unique period as this legislative session begins with a concurrent special session. We also are at a special point in Oklahoma’s journey because the prospect of a brighter path forward is so very near.

“What we do as a unified group of people elected by the citizens of our state could be considered the moment in time that changed Oklahoma.”- Governor Mary Fallin

The governor said lawmakers should also consider reforms proposed in the Step Up Oklahoma plan, saying revenue alone will not stabilize the state’s budget situation.

 “We have to include reforms as well. My budget includes money for agency performance and accountability efforts, which will ensure public resources are being spent appropriately and help address public confidence in state governance.” – Governor Mary Fallin

Criminal justice reforms

Fallin asked lawmakers to invest in ways to be smarter on crime, but yet remain tough on violent criminals.

“Too few Oklahomans are getting the treatment they need for substance abuse and mental health issues, and are instead winding up in our criminal justice system. We need to stop warehousing moms and dads, sons and daughters in prison when many just need substance abuse treatment.

“We need to continue our focus, and can do so without jeopardizing public safety. There are bills proposed by the Oklahoma Justice Reform Task Force that are smart, data-driven solutions to safely and prudently fix our criminal justice system. Send them to me to sign.” – Governor Mary Fallin

Calls on lawmakers to approve teacher pay raise

Fallin, for the third year in a row, challenged lawmakers to approve a pay raise for public school teachers. The Step Up Oklahoma plan includes a $5,000 pay raise for teachers. Fallin said teachers will see the increase not just as a way to help pay bills, but as a validation of their vital vocation.

“What kind of future do we want to have? Do we find it acceptable to have four-day school weeks? Is it acceptable for Texas to steal our teachers and leave our classrooms short of teachers?” – Governor Mary Fallin

Other highlights

The governor, during her speech, reminded lawmakers of the policy strides taken by the Department of Human Services in the Pinnacle Plan to meet the needs of abused or abandoned children. Oklahoma has the highest number of gains in foster care homes in the nation.

Fallin asked legislators to recall the Oklahoma Standard – of neighbor helping neighbor - and of the state being Oklahoma Strong – when in the face of crisis Oklahomans came together and solved the problem.

“The people of Oklahoma expect excellence and demand we solve our state’s problems. That is why we were elected – to lead, roll up our sleeves, get to work, solve problems, and find solutions.

“This is a defining moment for our state. We have two clear choices – We can continue down a path of sliding backwards, or the second path is to say ‘Enough is enough! We can do better! We deserve better! Our children deserve better!’

“This is a great opportunity to address ongoing challenges, to strengthen our state’s image and brand.” – Governor Mary Fallin

Step Up Oklahoma exposes own hypocrisy in letter to Wind Coalition

There's a dustup going on between Step Up Oklahoma, the group pushing $750M in new taxes, and The Wind Coalition, the group advocating for the wind energy industry. Step Up accuses the Wind Coalition of undermining their efforts to raise taxes on Oklahomans, while the Wind Coalition thinks Step Up is unfairly targeting them in their tax hike plan in favor of the oil and gas industry.

In an email to the Wind Coalition, Step Up Oklahoma spokesman Glenn Coffee (former Senate Pro Tem and Secretary of State) made this comment: "To date, we have not received anything that addresses the need for new recurring revenue. Instead, you ignored our request, proffering unworkable proposals meant to reduce local property taxes and shift even more tax burden on the backs of Oklahoma residential utility consumers and other industries. [emphasis mine]" (The Wind Coalition responded with their own letter, which can be viewed here.)

You don't say?

Meanwhile, the backbone of the Step Up Oklahoma plan is to place a burden of $571.2M in new taxes directly onto the backs of Oklahoma consumers and individual taxpayers, with an additional $156.5M being taken from the energy sector (oil/gas and wind) and $22M from expanding gambling (like we need more gambling in Oklahoma to devastate families).

Hypocrisy, much?


BONUS - here as some recent articles on the Fallin/Step Up tax hikes from Bloggers Organized for Oklahoma Taxpayers:

• ‘We can do better’: Americans for Prosperity pans Oklahoma tax plan [NonDoc]
• The Raw Nerve of it All — Arrogance and Corporate Greed of ‘StepUp’ Plan [SCrosnoe]
• The Band Is Back Together [Tapp Into Common Sense]
• Is It a "Step Up" ... or a Step Down? [Jordan Green Says]

Surprise (not): State Chamber endorses Step Up plan

State Chamber of Oklahoma Announces Support for Step Up Oklahoma

Oklahoma City (February 2, 2018) – The State Chamber of Oklahoma has announced its support for the Step Up Oklahoma plan after a board of directors vote on Friday. The plan includes measures to shore up our state’s budget hole, provide a teacher pay raise and implement much-needed reforms to our state government.

“We are excited to join the Step Up movement,” said State Chamber President and CEO, Fred Morgan. “Until we resolve long-standing issues like teacher pay, the budget shortfall and funding for health care and other core government services, Oklahoma will remain in a state of gridlock. We must come together to solve our state’s crisis.”

“The State Chamber Research Foundation called for many of these same reforms through our OK2030 vision plan released in December 2017,” said Executive Director, Dr. Jennifer Lepard. “We’re pleased to see many of our policy reform recommendations included in the Step Up plan and look forward to working with the group to ensure these important reforms are implemented.”

“It’s time for our state to come together around a workable solution,” said State Chamber Board Chairman Sean Trauschke. “The Step Up Oklahoma plan will allow our state to refocus its energies on growing our economy and providing the quality of life, health and education that Oklahomans deserve.”

Brogdon: the tax hike band is back together

The Band is Back Together

by former State Senator Randy Brogdon

Yes, the band is back together and like most Oklahomans, I’m not crazy about the song they’re singing.

I’m talking about the band of billionaires and millionaires who created “Step Up Oklahoma.” The name alone is highly offensive suggesting we taxpayers need to step as if we’re not stepping up enough already. And of course their step up plan always plays the same tune: Money…….. Money……… Money………. More Money.

In other words, grab your wallets and purses, because when these billionaire and millionaire limousine liberals get done with you, your wallets and purses are going to be considerably lighter. Of course, for your own good.

But let’s look a little closer at who the supporters of Step Up Oklahoma are. Step Up Oklahoma is not filled with average hardworking taxpayers like service technicians, bakers, auto mechanics, electricians, and small business owners etc., you know, average salt of the earth people. No, these are uber-wealthy men and women many of whom are politically connected and ready for action. Right now in the legislature, plans are being drawn to tap into your personal income.

I faced these people in the past so I know them and their tactics well.

Let me tell you a little story. Back in 2006 I led a statewide initiative called the Taxpayer Bill of Rights (TABOR). The legislation simply limited how fast government spending could grow based on inflation and population increases. A pretty reasonable proposal that was undermined politically, by some of the same people who now support Step Up Oklahoma. Imagine that! They oppose limiting government spending but support raising taxes. Well, at least they’re consistent!

Let me give you an example to illustrate who some of these folks are. Consider current Republican House Majority Leader Jon Echols, the attorney that represented the group that worked to defeat TABOR. Leader Echols “talks” about lower taxes and efficient government. In fact, Leader Echols told me personally during the last Special Session that he was committed to fight back Fallin’s tax increases. Let the record show this same Jon Echols ended up voting for all of Fallin’s tax increase proposals. And now, the second coming of Leaders Echols told NewsOK that the Step Up Oklahoma proposals would be at the top of the House agenda in February when session begins.

This has now spilled over into gubernatorial politics as Oklahoma prepares to elect a new governor this year.

As of the 4th Quarter 2017, members of Step Up have donated $49,200 to Todd Lamb’s gubernatorial race. Now Todd is quick to point out that he is against any new taxes. But just this week he said he does support Fallins idea of removing tax exemptions on some current goods and services which could add up to over $6 Billion in new taxes.

Let us consider Lt. Lambs carefully chosen words. He is not for any “new” taxes he forcefully states. Fair enough. But when a product or service is exempt from taxation, and the tax exemption is removed, well as you probably guessed the tax just increased and the cost of a product or service will go up. In other words, you will now pay more for that product or service in the form of a new tax. It will actually be a new tax and Lt. Gov. Lamb and Gov. Fallin are hoping to add billions of your dollars to the State bank account. Don’t be fooled by clever and misleading language, Lt. Gov. Lambs/Gov. Fallin’s proposal is a new tax.

When will these clever politicians learn that we’ve figure their game out?

One wonders who might have Lt. Gov. Lambs ear on this one? Could it be his Campaign Chairman Larry Nichols, (CEO Devon Energy) who surprise, surprise is one of the funders of Step up Oklahoma and a long time financial supporter of Lt. Gov. Lamb? This is the same duo that kept hundreds of millions of dollars flowing to the oil and gas industry with special tax credits while Lt. Gov. Lamb was in the senate. I bet Lt. Gov. Lamb won’t be too eager to remove those million dollar deals as governor. Just a guess.

But wait, there’s more!

Mick Cornett has received $32,300 from Step Up members in his race for governor. Mick said on KFAQ that tax increases are on the table for consideration. At least Mick is frank about raising taxes. He might as well be because that is what he has bragged about throughout his tenure as Mayor of OKC. Wonder where he got his tax increase ideas. Maybe it was his Campaign Treasure, financial supporter, and funder of Step up Oklahoma, David Rainbolt.

Many of the same people who are blatantly out front trying to raise your taxes are financing Lt. Gov. Lamb’s and Mayor Cornett’s campaign for governor. In fact, some are hedging their bets by donating to both campaigns. Make no mistake though, their ultimate goal is to raise taxes and eliminate any constraints on spending. The more tax dollars they get their hands on the more politicians they can “support.”

Here is what we know for sure from the quarterly financial disclosures from each campaign for governor. Supporters of Step Up Oklahoma have donated the following amounts to the campaigns:

• Todd Lamb - $49,200
• Mick Cornett - $32,300
• Kevin Stitt - $4,950
• Gary Jones - $2,700
• Gary Richardson - $500
• Dan Fisher - $0.00

I encourage you to look up Leader Jon Echols financial disclosure forms. I think you may be shocked to see how much PAC money he gobbles up including $2000 from the Devon PAC. You can find financial disclosure forms for ALL candidates at: Guardian.ok.gov

It’s simple just look under Search then Candidate Committee and you’ll see everything.

Here’s the bottom line. Step up Oklahoma is a horrible step in the wrong direction. It isn’t for the people, it’s for the politicians and the rich individuals who fund them.

Step Up is more like a giant Step Back for all Oklahomans. I hope the legislature comes to its senses and takes the Nancy Reagan approach when it comes to Billion dollar tax increases... just say No.
But if they don’t, it will be up to you to flood the Capitol in protest. This is a bad and raw deal for Oklahoman’s. Make no mistake, this band is playin' the wrong tune.

This column was originally posted on the Oklahoma Constitution Newspaper's Facebook group.

Richardson running radio ad against Step Up Oklahoma tax hikes

Tulsa Attorney Gary Richardson, Republican candidate for Governor, is out with a radio ad attacking the Step Up Oklahoma plan to raise taxes.

Here's an audio version of the radio ad:


Richardson's campaign also has a video version of the ad, with a slightly different ending (due to the constraints of campaign rules for radio ads):

House to move swiftly next week on Step Up Oklahoma tax hikes

In comments to the Oklahoman, House Speaker Charles McCall (R-Atoka) anticipates that the State House will move quickly to take up the "revenue raising" (i.e. tax increasing) portions of the Step Up Oklahoma plan put forward by Governor Fallin's oligarchs community and business leaders' group.

The Step Up Oklahoma plan includes about $750M in new taxes, raised via increasing the cigarette tax ($243M), GPT ($133M), gasoline and diesel tax ($170M), income tax ($144M), and a vareity of smaller tax increases and expansions.

Session begins on Monday, and McCall believes they will begin voting sometime during the week on elements of the Step Up plan.

Bloggers Organized for Oklahoma Taxpayers

As media and political leaders in Oklahoma are cheerleading efforts to increase taxes and undermine taxpayer provisions in the state constitution, some voices are standing up to say "Stop!"

Bloggers Organized for Oklahoma Taxpayers is a grassroots network of bloggers and writers dedicated to defending Oklahoma taxpayers against the onslaught of higher taxes and "reforms" that would strip taxpayer protections from the Oklahoma Constitution.

We pledge to be the voice for the working-class majority in Oklahoma who don't have lobbyists at the Capitol to counter the access of the powerful and influential who seek to undermine the consent of the governed.

While the mainstream media in this state pushes oligarchy-style schemes to make it easier for government to take more of Oklahomans' hard earned income, we will fight to stop these economically detrimental plans.

From articulating arguments against these ideas, to publishing important information and supporting elected officials who are defending the People, we plan to answer the call to defend Oklahoma taxpayers.

Over the coming days and weeks, I will be joining several other writers and bloggers in this effort to defend the Oklahoma taxpayer. Want to come aboard? Contact me to join the cause.

Tax Foundation: Step Up plan makes taxes "more complex and progressive"

Oklahoma Considering Income Tax Changes to Address Budget Shortfall

by Erica York, TaxFoundation.org

A new proposal in the state of Oklahoma would increase state income tax collections by $175.7 million. The income tax changes are part of a larger package of proposed tax increases to cover the state’s estimated $100 million budget shortfall, increase pay for educators, and fund other expenditures. The proposal would make several changes to the structure of Oklahoma’s personal income tax, resulting in some families seeing tax cuts and others seeing tax increases.

While the two lower intermediate brackets would reduce tax liability, they would also add more complexity and progressivity to the state’s income tax structure. If adopted, this proposal would give Oklahoma eight income tax brackets as opposed to its current six brackets. The nonrefundable, per return credit would also reduce tax liability for families within the income ranges outlined above.

The remaining components of the proposal would result in tax increases, as they subject more income to taxation. Capping itemized deductions would likely increase tax liability for higher income earners, as high-income earners tend to itemize rather than take the standard deduction. Reducing the standard deduction, then, would primarily affect lower income earners and likely lead to more households having income subject to the tax. Disallowing the personal exemption would likewise make more income subject to the tax.

Altogether, the proposal is estimated to increase tax liability for 45 percent of filers, to the tune of $175.7 million in new revenue. Households with AGI of $70,000 and higher would account for more than 75 percent of the increase.

These proposed changes make the tax structure more complex and progressive, not simpler or more neutral. Oklahoma has an opportunity at true tax reform that broadens bases and lowers rates to make the state more competitive. This plan falls short of that ideal.

Coburn: Oklahoma needs fiscal responsibility, not tax increases

In Oklahoma, treat the cause of the problem

by former U.S. Senator Tom Coburn, M.D.

As a doctor, I investigated the root cause of problems. Some doctors have fallen into the trap of just treating symptoms — this is the major reason for the overdose epidemic.

In government, the prime way politicians, bureaucrats and some advocates approach government is to throw your hard-earned money at it. The answer to state government's failures isn't more money — it's fiscally responsible governance.

Recurring revenues have been raised more than $700 million the past several years. State reports show the budget gap at less than $200 million. State government operational dysfunction abounds — for example, the scandal of at least $30 million squandered at the state Health Department. Oklahomans are striving to get out of a recession. Working Oklahomans need $800 million in annual tax increases like a hemorrhaging patient needs leeches.

Opportunities are numerous for fiscally responsible governance, so tax increases are unnecessary. Robust Medicaid enrollment audits are saving states billions — Oklahoma can implement this and save more than $80 million in state-share funds annually.

Oklahoma state government cries poverty yet has subsidized, over a period spanning the last two recessions, $20 million for Hollywood and film production, including $4.6 million to producer Harvey Weinstein.

The state piggybacks the federal giveaway of subsidizing wind with state subsidies exceeding $100 million annually.

The state cheats itself by more than $100 million annually in state tribal gaming tax revenue because of its below-market gaming tax rate. Oklahoma pays tribal governments more than $50 million annually to sell cigarettes.

Patronage and mission creep created the fundamental flaws of K-12 and higher education; empowering parents, students and teachers is the solution.

Government employment reform, so good employees are compensated more and underperforming employees are moved on, is necessary.

State pension administration reform can save $15 million annually.

Smarter and healthier spending of the more than $75 million annually controlled by the billion-dollar Tobacco Settlement Endowment Trust is long overdue.

A bipartisan, bicameral oversight committee with subpoena power to conduct performance and process improvement audits and reviews of every dollar spent, with full-time and independent staff that works transparently year-round, is a must.

Plans to throw a bomb of tax increases at the problem of lack of structural and transformational reform, while well intended, will fail like previous attempts. More money and appointing better managers to a flawed structure that was built by corrupt, good-ol'-boy politicians, isn't transformational. The $800 million package of tax increases being discussed at the state Capitol includes more than $175 million in sham income tax "reforms" that are just a backhanded way to increase taxes on working Oklahoma families. This must be stopped.

Oklahoma's most vulnerable and Oklahoma taxpayers who don't have an army of lobbyists deserve for politicians to take the true steps to do the tough work of responsible fiscal governance, structural reform and transformational policy solutions that end the failed status quo of government operation — as promised.

Anything less is a step off a cliff into the folly of just throwing more money at government.

Coburn, a former Republican U.S senator, lives in Tulsa.