Budget & Tax

| February 11, 2018

OCPA offers ‘a plan that can pass’

OCPA offers ‘a plan that can pass’

OKLAHOMA CITY (Feb. 12, 2018) — On Monday, the Oklahoma Council of Public Affairs (OCPA) offered a revenue plan in hopes of breaking the tax-and-budget impasse at the state Capitol.

“Oklahomans want to see teachers receive a $5,000 pay raise, but they know this can be done without unnecessarily heavy tax increases on working families and small businesses,” OCPA chairman Larry Parman said.

“Many people have asked OCPA for, in their words, ‘a plan that can pass,’ something that doesn’t raise taxes on working families, something simple that doesn’t require lawmakers to go through much gnashing of teeth from state government bureaucrats and tax consumers, but that still funds a $5,000 teacher pay raise and prevents nursing homes and other critical services from going under.”

OCPA’s “plan that can pass” includes:

  • A gross production tax increase to 5 percent for existing wells taxed at 2 percent and for all future wells for 36 months, and 7 percent thereafter—$199.5 million in new annual revenue
  • A $0.75 per pack cigarette tax increase—$121.9 million in new annual revenue
  • A cap of $10 million on the zero-emission tax credit for wind—$60 million in new annual available revenue
  • Send to Oklahoma voters a ballot measure dedicating all new tobacco settlement payments that currently go to the Tobacco Settlement Endowment Trust (TSET) to the state’s Medicaid budget—$57 million in new annual revenue
  • Tribes in Oklahoma step up and decline to accept any future rebates from the state for the sale of cigarettes and tobacco products—at least $67 million in new annual revenue

The OCPA plan provides the revenue necessary—$505.4 million annually—to address a $5,000 pay raise for every classroom teacher in Oklahoma public schools statewide.

“It’s time to give teachers the pay raise they deserve and provide the funding for it and stop the rest of the bureaucracy from using teachers as pawns while state agencies refuse to reform,” OCPA president Jonathan Small said. “This plan, once passed, would make revenues available within 90 days. We believe this plan is the fastest way to get our teachers the raise they deserve.”

A close reading of Gov. Mary Fallin’s Fiscal Year 2019 budget, released last week, reveals that the gap between base agency appropriations and estimated certified revenue has been completely eliminated. Gov. Fallin’s budget also indicates that recurring certified revenue exceeds last year’s recurring appropriations by $59 million.

Small said that with the budget deficit now resolved for Oklahoma’s state government, it’s time to focus on a narrowly tailored package that solves the teacher pay raise challenge and doesn’t include cumbersome, damaging tax increases on working Oklahoma families.

“We acknowledge there is not currently the political will at the state Capitol to enact targeted reform of nonessential spending or to rein in the mismanagement that has taken place at state agencies like the Health Department, the Health Care Authority, and elsewhere,” Small said.

Small added that several proposals from state lawmakers this legislative session should also be approved to ensure that existing taxpayer resources are directed to areas of highest priority.

“Each legislative session should be devoted to reforming government and exploring the expenditure of every penny paid in by taxpayers,” Small said. “Unfortunately, this hasn’t happened.”

A few such proposals under consideration in the current session include:

  • A proposal to dedicate Commissioners of the Land Office funds for salary increases for teachers and other public-school personnel
  • A proposal to place on the 2018 ballot a measure allowing public schools to utilize a larger percentage of ad valorem funds for teacher and staff compensation and other classroom-related expenditures, as opposed to being restricted to facility and technology upgrades
  • A proposal to institute more thorough and frequent eligibility audits of the state’s Medicaid rolls, as has recently been done in Arkansas
  • A proposal to model successful reforms in other states by implementing work requirements for able-bodied adults to empower them and protect Oklahoma’s exploding Medicaid program for the most vulnerable
  • A proposal to end Oklahoma’s Hollywood film credit subsidy, which paid $4.6 million to Harvey Weinstein

Parman also called for a return to oversight and responsible governance.

“This plan solves the state government problem with which there is consensus and allows for a clean slate for the rest of special session and the regular session to focus on structurally reforming and transforming Oklahoma’s structurally flawed government,” Parman said. “It is a violation of the Oklahoma Standard for policymakers and government personnel to neglect their number one responsibility which is to responsibly govern and protect the most vulnerable and taxpayers.”

“Not another penny in tax increases after this package passes should be considered at least until all of Oklahoma’s top twenty appropriated agencies have thorough financial audits, thorough performance and process improvement audits, and government personnel employment structures are reformed.”


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