Hobson says agencies facing 12% cut

Saturday, December 29th 2001, 12:00 am
By: News On 6

NORMAN, Okla. (AP) _ Some state agencies could face budget cuts of up to 12 percent if lawmakers try to protect education from the budget shortfall, a state senator said.

The state Equalization Board on Friday unanimously approved the state's projected revenue for fiscal 2003 as being about $105.3 million less than the current fiscal year, which by law automatically triggers a tax increase.

The income tax rate, now at 6.75 percent, reverts to the 1998 level of 7 percent instead of dropping to 6.65 percent as planned. The tax increase will raise Oklahoma's revenue by about $87 million.

``For the first time since 1983, we are in a clear deficit shortfall, and that will be new to most members,'' said state Sen. Cal Hobson, D-Lexington, chair of the Senate Education Appropriations Subcommittee. ``For those who have been clamoring for the chance to cut programs and services, they're going to have a gut full of it by the time were through.''

Gov. Frank Keating, chairman of the equalization board, said the automatic trigger does the opposite of what it should, and further hampers Oklahoma's ability to prosper.

``Taxes ought to go down when revenues go down. This, in my judgment, is all the more reason to discuss the elimination of this tax entirely,'' he said Friday.

``So, strap on your armor. We're ready to do battle on the subject of tax rates.''

Hobson, like many Democrats, disagrees.

``If having low taxes is the key to having the strongest economy or a great education system, Oklahoma would be right there. Trickle down economics has never worked.''

Keating has proposed a plan to abolish the income tax, the sales tax on groceries and the corporate franchise tax.

Lost revenue would be replaced by a 5.9 percent sales tax on services, but Keating said the cost would largely be absorbed by ``upper income taxpayers'' who purchase more services.

Hobson said Keating's plan won't work now that the state faces a budget shortfall.

``When people are not buying things, you dig yourself into a deeper and deeper hole,'' he said. ``What you want is a diversified economy and tax structure.''