Even as state agencies face more budget cuts and state employees face possible layoffs, continued furloughs and benefit reductions, some Oklahoma legislators are pushing for tax cuts.
As I’ve written before, an automatic decrease of the individual income tax from 5.5 percent to 5.25 on this coming Jan. 1, will overwhelmingly benefit the state’s wealthiest households while giving paltry or no cuts whatsoever for middle-class residents.
The legislature should delay the cut until the state’s budget situation is more stable.
Proposed legislation would also work to lower property tax increases, which will affect local budgets. According to the Oklahoma Policy Institute (OPI), state property taxes are some of the lowest in the country, yet “several proposals being considered by the Legislature this session would lower the annual cap on property tax increases from 5 percent to 3 percent for all homestead properties and agricultural land . . .” The proposals do require a vote of the people. One bill would create a ballot measure to decide whether ALL property tax increases for seniors here should be stopped no matter what their income.
An OPI fact sheet on the issue notes: “Oklahomans’ property taxes, in 2007, were just 42 percent of the national average and the 4th lowest of the states. Oklahomans paid $535 per person in property taxes, well below the national average of $1,270.”
So what’s the issue? The legislature should vote down these measures, and, if it doesn’t, Gov. Mary Fallin should veto them.
As the GOP continues to demonize government and its employees here and with the general popularity of tax cuts, the property tax measures would probably pass by wide margins here if the legislation were approved. This is fiscal irresponsibility on the part of some legislators and could do a lot of damage to local institutions. It also skews the whole argument for eliminating the individual income tax.
The Oklahoma Policy Blog states:
Ultimately, we depend on the property tax to help fund the vital local services our communities depend on, like schools, community technology centers and public safety. Basing the tax on the properly appraised value of people’s properties, with some targeted help for those most in need, is a fairer and more honest approach than arbitrary caps and freezes.
Meanwhile, some state employees-notably in the Oklahoma Department of Corrections-continue to face furloughs even before new budget cuts for next year go into effect. Here’s a statement that was posted recently on the DOC’s web site: “Due to state budget reductions, DOC Headquarters/Offices will be closed on Friday, March 11, 2011 and employees will be in furlough status. Regular operations will resume on Monday, March 14, 2011 at 8:00 a.m.”
The state retirement systems are also under scrutiny and part of the discussion has focused on benefit reductions and raising the retirement age.
In her State of the State address, Fallin called for 3 to 5 percent cuts for all state agencies because of the continuing financial crisis, which will only be exacerbated by another income tax cut that benefits the wealthy and lowering the amount of property tax increases.
The GOP has made much of the whole “shared sacrifice” argument during the budget crisis, but apparently it only pertains to middle-class people or the impoverished. As usual, wealthy people here and elsewhere are benefiting from the suffering of ordinary working people. Where’s the breaking point?