Oklahoma House Democrats Propose Budget Plan
TULSA, Oklahoma - “A state in crisis” is what five Oklahoma House Democrats say our state is in.
They’re proposing a budget aimed at increasing taxes on oil and gas companies as well as some of the top earners in the state with the hope of properly funding public safety, public education and healthcare.
News On 6’s Marty Kasper sat down with the group today.
Desperation is what they are feeling. Wednesday night, they heard and saw the pain that Tulsa Public Schools is going through while dealing with a state budget shortfall. Their solution is restored tax levels in Oklahoma.
“We are doing the exact opposite of what will attract business here,” said Rep. Meloyde Blancett.
Faced with a nearly $900 million budget shortfall, these state house democrats are hoping party lines isn’t what tanks Oklahoma.
“It doesn’t have to be this way,” said Rep. Monroe Nichols. “This didn’t happen because of something we can't control.”
And taking control, to these democrats, means establishing reoccurring revenue.
“Recurring, recurring revenue,” stated Rep. Regina Goodwin. “
Rep. Eric Proctor added, “The problem is we do not have the revenue we need to properly invest in education, public safety, and healthcare.”
Their plan, Restoring Oklahoma, in part seeks to restore the Gross Production Tax on oil and gas from two percent to five percent, collecting more than $300 million annually.
“We’re asking for the oil and gas industry to pay what janitors and teachers pay, five percent, what you and I pay, five percent,” Proctor explained.
They also want to restore the top income tax rates for the state’s highest earners to six and seven percent.
“Nobody had a huge win fall that changed their life completely because of tax cuts,” said Nichols.
The group doesn’t believe the increases would chase business to other states.
“Their real advantage over Oklahoma is not incentives or tax breaks,” Nichols said. “It’s the fact that they are investing in education.”
Rep. Matt Meredith added, “They’re not going to want to come to Oklahoma, no matter the tax breaks or whatever. We are dead last in almost everything.”
They stated the lack of investment is already hurting business and education here.
“We’re not honoring the profession,” said Goodwin. “Folks are not wanting to go into teaching. They’re having to get two jobs; that’s real.”
And that’s why this group says inaction now will spell disaster for our children and grandchildren.
“If the legislature was a football team, we’d have 90 putters in the house of representatives and that doesn’t get the job done,” explained Proctor.
All five of the lawmakers say more people need to get involved with this process.
Listed below is the Restoring Oklahoma budget proposal for you to review, and links that will help you email or call the people that represent you.
Restoring Oklahoma: A Plan for a Forward Thinking Budget
House of Representatives Democratic Caucus
Increasing Gross Production Taxes currently set at 1%, 2%, and 4% to 5%.
Restore the top income tax bracket at 6% for income over $100,000 for single filers and $200,000 for joint filers and add a top bracket at 7% for income over $200,000 for single filers and $400,000 for joint filers. These brackets will only affect 3% of all taxpayers. The average income in the new top bracket is $1.4 million annually.
Eliminate Capital Gains Exemption. The state allows an income exemption for profit on the sale of real estate, investments, and stocks. Studies have shown limited to no benefit of this exemption to the state.
Convert Itemized Deductions to a credit. This would require taxpayers to configure their Adjusted Gross Income prior to itemized deductions.
Cap the New Jobs Tax Credit at $25 million annually. An income tax credit is allowed for investment in depreciable capital for manufacturing or processing facilities. The credit has unlimited carryover, allowing investors to hold onto the credits and cash them out on an unpredictable schedule. Capping the credit assures that the state will not be required to pay larger than expected amounts in years of downturn. The state paid over $57 million in 2016.
End the Coal Credit. The credit has been known to be one of high rates of transferability, allowing other companies not related to the industry to reduce their state tax burdens.
Eliminate the Vendor Discount on sales taxes. Vendors are allowed to retain a portion of state sales taxes collected in relation to the proportion of their overall sales. This “discount” was placed into law to help mitigate costs of employing or contracting personnel to calculate and remit state sales taxes. This discount no longer applies due to electronic calculation and remittance of taxes. Big box stores that are headquartered out of state receive the largest discounts.
Require Combined Corporate Reporting. Oklahoma does not require businesses with a nexus in the state to report all profits on state income tax forms, effectively allowing large, multi-state corporations to harbor profits made in Oklahoma in other states with lower corporate income tax rates.
Eliminate the Equal Opportunity Education Scholarship Credit. The state should not allow the credit to be claimed in any year where any fund for public education experiences a shortfall or failure, or when the amount of state appropriations is not sufficient to meet the needs of a majority of public schools students.
Select Service Taxes on Industry. Remove sales tax exemptions on services to specific industries: oil and gas, construction, and certain entertainment productions such as motion picture production. These exemptions are offset by tax credits that are available to these industries.
Increase the Cigarette Tax as a part of the larger budget package. Consider a proportional increase in all tobacco products.