Oklahoma Republicans trying to eliminate automatic tax increase

Wednesday, January 2nd 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Some Republicans in the state House suggest rolling back a state income tax increase that took effect Tuesday.

The state Equalization Board on Dec. 28 unanimously approved new revenue estimates that gives lawmakers $105.3 million less to spend this year than they spent in 2001.

By law, the board's action automatically triggered the tax increase.

House Minority Leader Fred Morgan, R-Oklahoma City, said the increase is a ``wake-up call'' for legislative leaders to get serious about tax reform.

Morgan suggested immediately cutting the legislative service bureau's budget.

``We must wake up to the reality that if regular citizens have to cut their budgets, so should government,'' he said. ``We ought to set an example for the rest of state government here at the Legislature.''

House Speaker Larry Adair, D-Stilwell, said he has asked the House's fiscal staff to provide legislators with the latest financial information involving state government.

Rep. Bill Graves, R-Oklahoma City, said he wants legislative leaders to reconvene a special session in January to repeal the legislation that automatically triggers the tax increase.

On Tuesday, the income tax rate went from 6.75 percent to the 1998 level of 7 percent. The rate was supposed to drop to 6.65 percent.

The tax increase will raise Oklahoma's revenue by about $87 million.

State legislators passed a bill in 1998 that cut the state income tax from 7 percent to 6.75 percent. But the bill included a provision that, if revenues decline, the rate would go back up.

The law also reduces the number of people qualified for a state sales tax rebate.

Lt. Gov. Mary Fallin has asked Attorney General Drew Edmondson to issue a legal opinion on the automatic tax increase.

Fallin asked if the Constitution permits the Legislature to delegate to the Equalization Board the responsibility for levying income taxes and raising revenue.

She also wants to know if the board's action is a violation of a constitutional provision requiring a specific, separate vote of the people or a three-fourths majority of the Legislature before revenue can be raised by the state.

Edmondson and Fallin are both members of the board, as is Gov. Frank Keating.

Other board members are Treasurer Robert Butkin, Auditor and Inspector Clifton Scott, state schools Superintendent Sandy Garrett and Agriculture Commissioner Dennis Howard.

Denise Bode, Corporation Commission chairman, has formed a group to study the law providing for the automatic tax increase.

Bode, who has announced plans to run for attorney general, pointed to a constitutional amendment approved by voters that restricts tax increases.

``We have grave constitutional concerns about this tax increase,'' said Bode. ``The people of Oklahoma have enacted strict constitutional requirements on how tax increases may be imposed.''

The Equalization Board acted because revenues are not coming into the state treasury as expected, mainly due to declining natural gas prices.

The automatic tax increase triggered by the state revenue problem will remain in effect throughout 2002 unless it is repealed.