The new Oklahoma House tax-cut plan may already be dead as I post this, but it seems modeled, in some respects, on the philosophy underlying the Taxpayer Bill of Rights (TABOR) movement.
Under the TABOR philosophy, state government spending should be capped each year under a formula based on inflation and population growth. Additional revenue is then given back to taxpayers.
Under the new House tax-cut plan, triggers are put into place to lower the top state income tax of 5.25 percent over several years if revenues grow by 5 percent in a previous year. In essence, taxpayers also get the additional revenue.
Both plans place draconian limits on government spending and ensure it’s virtually impossible or at least extremely difficult to change it. They also tie the hands of future legislators to respond to pressing needs in infrastructure, education and health services.
A 2006 push to make TABOR a state constitutional amendment failed here in the courtroom, and its implementation in Colorado became a disaster that voters had to later rectify so core government services could continue.
The initial House tax cutting plan, endorsed by Gov. Mary Fallin, would have cut the top income tax rate from 5.25 to 4.8 percent next year. It also would have triggered another tax cut in 2015 if revenues grew by 5 percent the previous year.
But because the plan eliminated the $1,000 personal exemption, many middle-class Oklahomans would have paid more in taxes. In other words, the tax cut was really a tax increase for many people.
As of Wednesday, House leaders had decided against hearing the Fallin-endorsed tax bill, and put forward the tax-cut trigger bill, which was not met with any special enthusiasm by either Fallin or the Senate. Legislators have until Friday to finish their work. Both plans are presumably still under some form of consideration as I post this.
Beyond the comparison of the new House plan to TABOR, here are some criticisms of the current tax-cut political debacle at the Oklahoma Legislature:
(1) It is extremely irresponsible and borderline dishonest to propose major tax cuts and tax-code adjustments in the last few days of a legislative session. This doesn’t give the number crunchers enough time to determine the fiscal impact on individuals and state government funding nor does it allow for extended public debate and media coverage.
(2) The GOP controls state government. If Republicans want to cut taxes, then they should cut taxes and specifically cite how much state government spending will be cut in the process. I’m adamantly opposed to any tax cuts right now, but at least this would be an honest and transparent approach. It would allow people to plan their lives. For example, if teachers know they’re going to lose their jobs, then at least they can take action. The frenzied, disarrayed GOP approach to the tax-cut issue in the final days of this session lacks basic integrity and human decency.
(3) Let me repeat: Most government agencies and education have faced drastic cuts in their funding in recent years because of the economic downturn that began in 2008. Teachers and other workers have lost their jobs. Cutting taxes immediately after a relatively slight rise in revenues is as irresponsible as TABOR. The recently announced standstill budget for next year, which the House has now voted down, is another classic example of ideology trumping sound fiscal policy.
The Oklahoma Legislature needs to adjourn without acting on any tax-cut proposal this year. At this point, that’s the most responsible action or non-action it can take.