State Budget Negotiations Are Certainly a Class Warfare Issue, Such as Suspending Sales Tax ‘Holiday’
By State Rep. Brian Renegar, DVM
OKLAHOMA CITY (19 May 2017) – We are waiting anxiously to see whether the tortoise catches up with the hare! It is a hurry-up-and-wait game.
Usually during the last two weeks of the legislative session, starting on Monday, we go from 9 a.m. to 10 p.m. every day and typically debate and vote on 30 to 40 bills each day.
During the first four days of this week, the House of Representatives considered 22 bills (18 House bills and 4 Senate bills) plus three resolutions (two House resolutions and one Senate concurrent resolution).
Appropriation bills must be disposed of no later than May 21, because the state Constitution decrees that no revenue measures can be considered during the last five days of the legislative session. In accordance with another constitutional mandate, the Legislature must adjourn its regular session by no later than 5 p.m. May 26.
We finally considered House Bill 2414 by House Appropriations & Budget Chair Leslie Osborn (R-Mustang), which was an all-encompassing revenue bill. This bill included a $1.50 cigarette tax, six cents a gallon gasoline tax, a wind energy tax and, finally, a gross production tax that reduced, from 36 months down to 18 months, the period of time in which a new oil or gas well would be taxed at the low 2% rate. That proposal would not bring any money into our state for 18 months from the moment when a well starts producing.
If HB 2414 had passed, it would have brought in $340 million in taxes from working Oklahomans and zero from oil and gas companies. This bill failed to get 76 votes needed for passage; the final vote was 51-46.
Folks, I have enjoyed keeping you informed about what is happening at the State Capitol. As you know, I do not sugarcoat my comments and I am all about what’s best for the working class, school children, veterans and seniors. I do understand the importance of incentives to create jobs and I can see when we overdo these incentives.
Regardless of the headlines, I want you to know that this budget struggle is not a Republican vs. Democrat issue, or an urban vs. rural issue; it is a class warfare issue: a debate about whether corporations pay their fair share or whether working Oklahomans must pay for the massive state budget hole.
Personally, I don’t feel that our budget is in this billion-dollar hole because an Oklahoma working mom is not paying enough tax on gasoline or my constituents are not paying enough for cigarettes. Instead, our budget hole is due to the tax cuts to the wealthy ($1.2 billion) and corporate giveaways. The Legislature has tried to balance the state budget by cutting all agencies by at least 25%; some, like colleges/universities, have been cut almost 40%. (That’s one reason why tuition has skyrocketed)! Sadly, the most powerful person at the Capitol is not the Governor, the Speaker of the House or the Senate President Pro Tem; it’s Harold Hamm, the CEO of Continental Oil.
Here are some of the ideas that have been presented by the majority party of both the House and Senate:
- HB 2364: If you die and your car passes to your child or spouse, they would have to pay a new excise tax on it even though you already paid an excise tax when you first bought the car. Same applies if you give your car to a family member or just want to add another family name to the title. This would generate around $16 million.
- HB 2404: Currently the State itself and all of its agencies and subdivisions are exempt from paying sales tax. HB 2404 would eliminate that exemption. So under this bill, when EOSC, the Department of Human Services, the district judge, or McAlester Public Schools buys a case of paper or cleaning supplies, they would have to pay sales tax on it. Obviously you see we would generate more tax dollars that way. Then the state would have more money to allocate to those entities, so they could afford to pay this proposed new tax.
Well, actually not quite; you see, this would only generate the 4.5% sales tax that goes to the State of Oklahoma, but they would also have to pay all the city and county taxes on top of the state portion of the tax. So all we really would be doing is churning money, to the detriment of the state and its subdivisions, but to the benefit of cities and counties.
However, a non-appropriated agency (an agency that raises 100% of its own funding) such as the Wildlife Department would get the double whammy: no money from the state and have to pay all of the sales tax. This would produce about $106 million each year, but leadership would pat itself on the back for raising so much new tax money.
- How about Senate Bill 862? Since we can’t touch the wealthiest Oklahomans because the legislative leadership is so beholden to them, we would take it out on working mothers who are struggling to survive. This bill – which is a “live round” waiting to be added to the legislative calendar and brought up for floor votes in the House and Senate – would eliminate (for the next three years) the sales tax “holiday” that many families use right before school starts to buy their kids new clothes and classroom supplies – to the tune of $7.4 million. My sympathies to all the clothing stores in our area, and all the nearby Texas stores send their sincere appreciation to the Oklahoma Legislature.
(Representative Renegar is a Democrat from McAlester.)
MIKE W. RAY
Media Director, Democratic Caucus
Oklahoma House of Representatives
(405) 962-7819 office
(405) 245-4411 mobile