HOUSE speaker says special session probably won't include tax reform

OKLAHOMA CITY (AP) _ A proposal to overhaul Oklahoma's tax system probably won't be taken up during next month's special session, according to House Speaker Larry Adair. <br><br>``If we're

Monday, August 20th 2001, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ A proposal to overhaul Oklahoma's tax system probably won't be taken up during next month's special session, according to House Speaker Larry Adair.

``If we're going to do some major changes in the tax code and our source of revenue, we need to spend more time on this,'' said Adair, D-Stilwell. ``I've talked to a lot of people including those here at home. They've told me we need to be very careful. We don't need to be hasty.''

Gov. Frank Keating and legislative leaders have discussed finding a way to abolish the income tax and state sales tax on groceries, modify the estate tax and still finance state government.

Keating wants to also abolish the business franchise tax and the corporate income tax.

Keating and Senate President Pro Tempore Stratton Taylor, D-Claremore, have advocated tax reform for some months, but Adair has remained lukewarm to the idea.

``My recommendation will be we continue working on this measure. If we're going to do something, do it in regular session,'' Adair said. The regular legislative session begins in February.

Adair said a number of southern states including Mississippi are experiencing problems with their revenue sources. Also, Missouri had to cut $500 million because of revenue shortfalls and probably will have to cut another $200 million next year, Adair said.

If similar problems hit Oklahoma government, the Legislature will have just one option _ cut spending, which means cutting government services, Adair said.

A 1992 constitutional amendment has made it difficult for the Legislature to raise a tax without submitting it to a vote of the people, Adair said.

Taylor and House Republican leader Fred Morgan, R-Oklahoma City, believe a plan can be prepared long before the 2002 Legislature convenes.

``I would definitely think we'll have a plan ready before the regular session,'' Morgan said. ``I have urged the governor to try to have a plan ready by the first week of October.''

Taylor thinks legislators will take up tax reform issue ``in the very near future,'' long before the regular session begins.

A special session originally called to consider tax reform will take up other issues when it resumes Sept. 7.

Adair said Rep. Clay Pope, head of the House Revenue and Taxation Committee, has been holding meetings to review the tax code.

Pope, D-Loyal, sent Keating a letter, asking him whether he intends to act on recommendations made to Keating and legislative leaders by economists from the University of Oklahoma and Oklahoma State University or if he has another plan.

A team of economists from OU and OSU was asked to study several states and report on how this could be accomplished.

The report by OU and OSU economists listed options including raising the property tax, expanding the state sales tax to other services, levying a gross receipts tax on producers of products and services or increasing motor fuel taxes, or a combination of increases.

The governor, Adair and Taylor all ruled out raising the property taxes.

Although Adair and Taylor want other issues added to the special session agenda for Sept. 7, the only ones currently on the agenda are congressional redistricting and a tax matter which is not part of the tax reform discussions.