Budget & Tax, Law & Principles

Special sessions routine for Oklahoma Legislature

February 1, 2024

Ray Carter

Although Gov. Kevin Stitt called a special legislative session on Jan. 29 to consider a quarter-point reduction in Oklahoma’s personal income tax rate and House lawmakers have now passed a tax cut, Senate leadership has balked at voting on any legislation, choosing to adjourn to the “call of the chair” and indicating no action would occur anytime soon.

In the leadup to the session, Senate President Pro Tempore Greg Treat, R-Oklahoma City, dismissed the special session as “political theater and a waste of taxpayer dollars.” He questioned if state revenue would allow for a tax cut and also said a special session was pointless without an agreement between the governor, House, and Senate.

But records show that members of the Oklahoma Senate have routinely convened in special session in recent years, regardless of the extra expense to taxpayers—even in situations where there was not full agreement between the House, Senate, and governor, and even in situations where lawmakers were advancing legislation with enormous potential (and not fully quantified) financial consequences for state revenue.

In 2023 alone, lawmakers convened in the first special session of the current 59th Legislature for 10 separate days, according to the Senate journal.

That special session was originally convened so lawmakers could spend $1.8 billion in federal money provided by the Biden administration through the American Rescue Plan Act (ARPA). The expenditure of those funds has played a key role in driving up inflation to historic rates not seen in decades, according to financial experts.

But state lawmakers rushed to spend the money anyway.

The 2023 special session also included lawmakers’ efforts, ultimately successful, to override Gov. Kevin Stitt’s veto of legislation effectively creating new, one-year tobacco compacts with several tribal governments.

Stitt warned that language in the one-year compacts authorized by the legislation could allow a dramatic expansion of territory subject to the compact, which could ultimately include 42 percent of the state and divert millions in current state-government tobacco-tax collections to tribal governments that currently go to state government.

Lawmakers chose to advance the compacts anyway, regardless of the potential unknown financial impact on state government.

Senate lawmakers also convened in special session for nine days in 2022 in another session focused on ARPA funds and a nearly $700 million, corporate-welfare style program to subsidize with taxpayer dollars one company’s potential relocation to Oklahoma.

Senate lawmakers also met for five days in special session in November 2021 to vote on redistricting legislation.

While senators rushed to spend $1.8 billion in Biden-administration funds and approve compacts that could reduce state tobacco tax collections by millions to the benefit of a few tribal governments (that have been a source of campaign donations for many lawmakers), the proposed tax cut under consideration in the current special session involves far less money.

Reducing Oklahoma’s personal income tax from the current rate of 4.75 percent to 4.5 percent, as proposed by Stitt, would (on paper) eventually reduce state tax collections by up to up to $345 million according to one fiscal estimate.

But the true impact could be even less since prior income-tax cuts have generally produced increased tax collections the following year due to their stimulative economic benefit.

While Senate leadership has flinched at passing pro-growth tax cuts this year, several Republican senators have publicly vowed to cut the income tax, and state Sen. Micheal Bergstrom, R-Adair, has filed Senate Bill 1, which would allow for a quarter-point cut in the personal income-tax rate and its gradual elimination in future years. That bill is eligible to be voted on in the current special session called by Stitt.

Officials have said special sessions cost about $34,000 per day. At that rate, even excluding special sessions on tax cuts, the 24 days spent in other special sessions that the Senate has participated in since November 2021 translate into a combined Oklahoma-taxpayer cost of about $816,000.

The actual cost is likely less than that figure, however, since some special session days have coincided with days that regular legislative session activity has also been conducted. However, the same thing holds true for the current special session on taxes, which coincides with at least one day that Senate lawmakers are conducting a committee meeting in the lead-up to the regular session, meaning there is less additional expense created by the special session.

Although Senate leaders today are declining to hold a special session to cut taxes, the Senate convened in special session in 2017 to consider tax increases. Nineteen current members of the Oklahoma Senate also served in 2017.

Given the Senate’s penchant for routinely convening in special sessions to spend taxpayer money, the governor has argued the Senate should be willing to vote in special session to give money back to state taxpayers.

“The Senate is refusing to do what 65% of Oklahomans support: cutting taxes,” Stitt recently tweeted. “If anything is a waste of taxpayer money, it is the refusal of Senate leadership to give Oklahomans a well-deserved pay raise.”