To Comfort The Afflicted
And Afflict The Comfortable

To Comfort The Afflicted And Afflict The Comfortable

Friday, February 26, 2021

Observercast

When The Going Gets Tough

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BY DAVID PERRYMAN

In May 2003, when the price of oil was just under $40 per barrel, Oklahoma’s state government enjoyed relatively dependable streams of recurring revenue. Property taxes and gasoline taxes were both comparatively low. Legislators were well aware of the necessity of keeping income tax rates at a level that would not harm the state. While Oklahoma’s income tax rate had been lowered to 6.65% a few years earlier, the decrease was coupled with a trigger mechanism that would restore the rate to 7% in the event of revenue shortfalls.

These were the prudent measures that allowed the state to properly fund education and actually placed the state in a position to give teachers and state employees a raise.

But that was over a decade ago. Since then, much has changed at the state Capitol. A different party holds the majority in both houses of the Legislature and the Mary Fallin-Todd Lamb plan to continue income tax and gross production tax cuts has become reality.

The combined income tax cuts of SB 435 and HB 1547 in 2005; HBs 1172 and 3139 in 2006; SB 861 in 2007; HB 2032 in 2013; and SB 1246 in 2014 account for more than $1.022 billion in lost revenue and form the primary basis for Oklahoma’s financial crisis that undermines the state’s ability to provide core services, is damaging to our infrastructure and threatens our economic well-being now and for generations to come. That damage is in addition to that caused by oil and gas gross production taxes.

Last week we observed how it seems like more than a mere coincidence that the lost revenue from income tax cuts over the past 12 years [from 6.65% to 5%)] is roughly equal to the budget hole that we are currently experiencing. It seems so logical to simply restore the top income tax rates to the levels that they were in 2004 and restore the recurring revenue stream to properly fund education and other core services.

Instead, Gov. Fallin’s plan to increase taxes on gasoline and cigarettes and by imposing sales taxes on 164 different types of services [i.e. gas, water, electricity, sewer and trash; car washes, mowing and yard work; day care services; laundry and cleaners; doctor, dentist and optometrist visits; nursing home, home health care and skilled nursing services; dialysis and hospital bills; cemetery lots; funeral expenses; life, health, accident and property insurance; abstracts and realtor fees; legal fees; tax preparation and surveying; banking, mortgage, lending and deposits; pension, health and welfare funds; automobile lease payments and haircuts and styling salons] raises nearly $2.6 billion and shifts the burden of state government from the wealthy to working and poor Oklahomans.

Even though the Oklahoma Policy Institute estimates that the total elimination of the state’s income tax would cost the state an additional $2.5 billion per year, Gov. Fallin, Lt. Gov. Todd Lamb and a host of current state representatives and senators want to continue toward that end and now Oklahomans were informed last week that Lt. Gov. Lamb, whose history of supporting income tax cuts and was the tie-breaking vote in the Oklahoma Senate when the gross production tax on oil and gas was slashed, has jumped ship and resigned from the governor’s cabinet.

Oklahoma is in a crisis as a result of the Fallin-Lamb plan of cutting income taxes and gross production taxes. Lamb’s decision to distance himself from the governor’s plan comes at a time when there is speculation that he is preparing to announce a run for governor next year. At least Gov. Fallin has a plan.

Oklahomans don’t get to quit their jobs when the going gets tough. If Lt. Gov. Lamb wanted to show leadership, he should have remained at the table to present his vision of a way to make Oklahoma great again.

David Perryman, a Chickasha Democrat, represents District 56 in the Oklahoma House

David Perryman
David Perryman
David Perryman has deep roots in Oklahoma and District 56. His great-grandparents settled in western Caddo County in 1902 as they saw Oklahoma as a place of opportunity for themselves and for their children. David graduated from Kinta High School then earned degrees from Eastern Oklahoma State College, Oklahoma State University, and the University of Oklahoma College of Law where he earned his Juris Doctorate. He has been a partner in a local law firm since 1987 and has represented corporations, small businesses, medical facilities, rural water districts, cities, towns, public trusts authorities and non-profit entities for more than 29 years. – David Perryman, a Chickasha Democrat, represents District 56 in the Oklahoma House