State coalition urges rejection of big tax cuts

Thursday, May 12th 2005, 6:27 am

By: News On 6

OKLAHOMA CITY (AP) A coalition of 51 organizations urged lawmakers on Wednesday to reject large permanent tax cuts now under consideration, saying such reductions could cripple state services once the current boom in oil and natural gas revenues has ended.

``We are alarmed that the tax-cut package promoted by leadership, with a $58 million impact next fiscal year, could lead to a loss of $425 million to $500 million annually when fully phased in over five years,'' the groups said in a letter to Gov. Brad Henry, Senate President Pro Tem Mike Morgan and House Speaker Todd Hiett.

Those signing the letter included such diverse groups as the American Association of Retired Persons, the Oklahoma Parent Teacher Association, the Oklahoma Council of Churches and several education, labor and health groups.

Opposition to a large permanent tax cut was coordinated by the Tulsa-based Community Action Project, an anti-poverty agency that receives federal government funding for its Head Start and public housing programs.

``Lawmakers should take very seriously that so many respected organizations representing such a diverse cross-section of the state are alarmed at the prospect of our leaders blowing a $425 million hole in the state budget,'' said David Blatt, director of public policy at CAP.

Two weeks ago, an analysis by CAP said tax cuts anywhere near the magnitude of those under consideration could lead in future years to double-digit tuition increases, less competitive teacher pay and reductions in health coverage and social services for children and the elderly.

Blatt said Oklahoma is barely breaking out of a state financial crisis that led to huge budget reductions in 2003 and should not undermine its future by ``unaffordable tax cuts.''

Instead, Blatt said surplus funds should go toward better schools, fixing roads and making sure children and senior citizens have needed services.

In February, Henry proposed $100 million in income tax rebates this year, plus cuts in other taxes totaling $63 million. House Speaker Todd Hiett is proposing $163 million in permanent cuts, including reducing the maximum income tax rate from 6.65 percent to 6.25 percent.

A variety of other proposed tax cuts have passed the House and Senate and are now in joint conference committees, including tax breaks for the booming oil and natural gas industry.

Hiett, R-Kellyville, called the letter from the 51 groups ``another publicity stunt.''

``Oklahoma has a $700 million budget surplus,'' Hiett said. ``I'm shocked that anyone would suggest we should spend all the money without considering the taxpayers.''

``The tired liberal rhetoric of revenue shortage that is being used to oppose tax cuts is simply wrong,'' the GOP speaker said.

Responding to Hiett's comments, CAP spokeswoman Heather Ann Hope said the organizations signing the letter represented a broad cross-section of Oklahomans, from parents, to firefighters, to church leaders and senior citizens.

``The speaker did not address the central claim of the letter, which is that the ballooning cost of the tax cuts and how will they be paid for when the current increased revenue collections end,'' Hope said.

Senate President Pro Tem Mike Morgan, D-Stillwater, said next year's budget will contain record funding for education and health care and make a significant new investment in roads and bridges, as well as in mental health and public safety.

He said he respected agencies and ``special interest'' groups lobbying for more funding, but ``I also believe that targeted tax cuts can improve the quality of life for Oklahoma's working families and help boost economic growth.''

Morgan said less than 1 percent of the budget had been set aside for tax cuts next year and he recognized that figure will grow in future years when the reductions are fully implemented.

``I will not, however, support tax cut programs that don't ensure that state revenues will be sufficient to meet the needs of Oklahoma citizens who depend upon state services as a critical part of daily lives,'' the Senate leader said.