Keating, lawmaker differ on tax cut issue in upcoming session

OKLAHOMA CITY (AP) -- Gov. Frank Keating believes cutting taxes should be the state Legislature's priority when it convenes in February, but one lawmaker suggested that Oklahoma should meet its obligations before reducing revenues.

Keating and state Sen. Cal Hobson both spoke Wednesday at The Oklahoma Academy, a citizen think tank comprised of state leaders.

"We need to reduce taxes, remove artificial barriers to growth but also fund education," Keating said.

He said his priorities this session again will be right-to-work legislation as an incentive to businesses locating here, and reduction of workers compensation rates that employers have to pay for on-the-job injury insurance.

Hobson said revenues are increasing in Oklahoma because natural gas prices are high, and that might only be temporary. He fears the state could get into a tax-cutting mode like it did in the early 1980s during an oil boom. The state had to go back and raise taxes, he said.

Hobson, D-Lexington, also said the past few legislatures and the governor have approved two huge bond issues, committing sizable amounts of money to be paid, much of it out of the general revenue fund.

State leaders have approved a $1 billion road-building program and another $300 million capital improvements bond issue.

"We have stacked up very significant bills that we now have to pay," Hobson said.

Hobson noted that the state Corrections Department alone wants another $28 million in supplemental funding in its current budget to fund a 300-bed private prison coming on line and also to pay for housing more criminals.

State revenues are projected to grow by about $284 million next fiscal year, which is the amount of additional money expected to be paid through various state taxes. But legislators and Keating already have committed $107 million of this to make the annual bond payment for the huge road program.

In all, $232 million from the new money already is committed, Hobson said.

State Rep. Russ Roach, speaking for the Democratic House leadership, said that early childhood development is a top priority of state representatives.

Roach, D-Tulsa, called for providing capital gains and investment credit along with reducing property taxes, which he said have been jumping by 5 percent a year for the past four years.

The academy is a private, nonpartisan organization that identifies issues in Oklahoma's future. Its members make recommendations on how they think those problems should be addressed.

The academy has been concerned about reducing the length of the Oklahoma Constitution, believed the longest in the nation. It also supports abolishing term limits.

The group also is concerned about implementation of House Bill 1017, the education reform bill approved in the early 1990s.