What in the world is going on in OKC? I get that question all the time from constituents. My somewhat flippant answer lately has been, “When I find out, I’ll let you know.” In truth, if I wasn’t trying to be funny, my answer would be the same. I continue to start writing this column and before I can finish it, things change, leaving me scratching my head, wondering, “What IS going on in OKC?” So, I start rewriting the column and the process just continues to turn over and over.
Here is a brief review of where we are, as a State. The Governor started our regular session back in February, declaring that the legislature needed to come up with some significant, recurring, sustainable revenue raising measures (tax increases) to address our ongoing, systemic budget crises.
The good Republican proposed some whopping regressive tax increases that would be paid primarily by middle-class and working poor Oklahoma families. Her proposals never went anywhere. We Democrats proposed a package deal that would have distributed tax raises across the board to everybody in the State. It never went anywhere. We were allowed to participate in a few of the regular session budget negotiations, although none of the major components of our proposals ever made it into a single bill that was actually considered by the legislature. But some bad bills and some worse bills were voted on, one of which (a bad bill), SB 860, passed the House by a vote of 57-42, the Senate by 33-13, was signed by the Governor and became our budget for FY2018. Most state agencies were cut, little was done to raise new revenues and two of the three components of that budget that did raise revenue (and were called “fees” instead of “taxes”), were later declared unconstitutional. That left a $215 million hole in the budget, which is also unconstitutional, as we are required to have a “balanced budget.”
Consequently, Governor Fallin, called us back into Special Session, again telling us to come up with some significant, recurring, sustainable tax increases. This time, Democrats were not allowed to participate in the negotiation process as the Governor and House and Senate leaders came up with a bill, HB1054x, which again failed to contain a single component of what we D’s really wanted. Regardless, Democrats in the House overwhelmingly supported it (82% of the caucus) but not enough of the Republicans did, so it fell short of the required 75% of the House (71-28), as this bill did include some tax increases. This was another bad bill, but better than not approving anything. Therefore, the Governor and House and Senate leaders (Democrats were not allowed, again) went back to the drawing board and negotiated a worse bill, HB 1019, which was called “Cash and Cuts.” This just consisted of stealing money from wherever it could be stolen (like an additional $50 million from county roads and bridges, on top of the $30 million and the other $50 million already taken) and the balance of the hole ($60 million), was filled by cutting all state agency budgets. As there were no new tax increases in this bill, it could be passed by a simple majority, which it was: 65-25 in the House and 29-14 in the Senate, eight weeks into the Special Session. But, then, to the surprise of just about everyone, the Governor line item vetoed 165 of the 170 sections of the bill which she had negotiated, again saying we needed significant, recurring and sustainable revenue raising measures.
She has now negotiated a new deal with “business leaders,” so, I guess, this time the House and Senate leadership as well as the Democrats were excluded. She has called the legislature back into a second Special Session, which will start Monday. But, in her Executive Order, issued Friday, which officially makes the call, she simply instructed us “To provide funding for FY18 to the Oklahoma Health Care Authority to avoid provider rate cuts.” Please note, we are limited to doing what she put in the call, so I guess we will not look into coming up with any significant, recurring, sustainable revenue raising measures. At the expense of $30,000 a day of your tax dollars for Special Sessions, that is what we will attempt to do. Yes, I am still scratching my head.
Did I mention while all of this was going on, the state Incentive Evaluation Commission? If you will recall, this is a commission set up by law in 2015 to have independent, professional-minded experts (all appointed by the Republican state leadership) to determine if the State is getting its money’s worth from all the billions of dollars we give away to corporate America and wealthy individuals. They examine a handful of incentives each year (12 this year) and one of them was the capital gains tax exemption. I seriously doubt a large portion of my constituents have ever claimed a capital gains exemption, as this is a deduction that a taxpayer gets on the profits from the sale of Oklahoma business property and stocks. The Commission employs an independent outside research outfit, PFM Group Consulting, to figure out how much of a benefit each deduction actually is to the State of Oklahoma. PFM reported, “The incentive overall cannot, with the data available, be credibly shown to have significant impact or a positive return on investment for the state.” The report informed the Commission that from 2010 to 2014, this tax break has created an estimated $9 million in additional tax revenue while costing the State $474 million, for a net loss of $465 million. But, instead of voting to eliminate the exemption, as recommended by PFM, in the report released this week the Republican-controlled Commission voted (3-1) to retain the deduction. Why? Because 86% of the tax break went to residents making at least $200,000 annually.
And you wonder why the State of Oklahoma withers on the vine, teachers leave, hospitals close, waiting lists grow longer and services are cut across the State?
Isaiah 3:12, 14-15 - My people, your leaders deceive you, they confuse the paths you should follow. The Lord enters into judgment with the people’s elders and princes: You, you who have devoured the vineyard; the loot wrested from the poor is in your houses. What do you mean by crushing my people, and grinding down the faces of the poor?
Rep. Ben Loring (D-Miami) represents District 7 in the Oklahoma House of Representatives. For more information, contact him at email@example.com or 405-557-7399.