Gov. Mary Fallin, in what is becoming another desperate search for a tax cut, has dropped her demand for a tax decrease this coming year and says she’s open to proposals that would slash rates in 2015 and in subsequent years.
House Speaker T.W. Shannon, a Lawton Republican, has also joined Fallin in a new show of openness and compromise over a Senate tax cut proposal. Both Shannon and Fallin had previously insisted on a tax cut for 2014.
This is mixed news. While it’s encouraging Fallin and Shannon might be open to a delay in a cut and support some reform of the tax code, including the elimination of unneeded credits, it also begs this question: Why not just wait until next legislative session to cut taxes since the initial decrease wouldn’t go into effect until 2015? Wouldn’t it be more responsible to just wait and see how well the economy is doing next year?
Of course, the real GOP elephant in the living room is that Oklahoma is still recovering from the Great Recession, recent budget cuts have devastated education funding and the tax cuts will primarily benefit only the wealthiest Oklahomans.
Are Republicans at this point just trying to pass a tax cut only for the sake of saying they cut taxes? I think so. Beyond sweeping generalizations-people need more money in their pockets, tax cuts will attract businesses, etc.-Republicans have offered no rational reason for a tax cut at this time, especially given recent budget cuts and pressing infrastructure needs.
Here’s where we stand. The House passed a Fallin-supported bill that would lower the tax rate from 5.25 to 5 percent in 2014 without any offsets. They also killed a Senate proposal that delayed a tax cut until 2015 and also dealt with deductions and credits. When the Senate got the House tax measure, contained in HB 2032, a committee inserted new language in it that would delay a tax cut from 5.25 to 4.95 percent until 2015 and sunset some tax credits.
What has transpired since is the type of Republican infighting that doomed a tax cut last legislative session. At first, Fallin and Shannon insisted on a 2014 tax cut. Now, they’ve backed off the rhetoric, and are indicating they could accept delaying a cut, especially if it’s larger. So it’s back to square one.
As expected, the trashy spectacle of the crumbling state Capitol building has become an important part of the GOP intraparty fight. Sometimes symbols-state Capitol buildings are about as symbolic as you get-are extremely important. Republicans are considering tax cuts in a building that has to be fenced off in places because pieces of it are falling to the ground. Scaffolding is in place to protect people from getting hit from dropping limestone fragments. The building needs major electrical and plumbing work as well. The building is now listed as an endangered historic place by Preservation Oklahoma, Inc.
It could take more than $200 million to repair and renovate the building, but it appears Republicans would rather give big tax breaks to millionaires than fix the house. State Senate President Brian Bingman, a Sapulpa Republican, and Shannon can’t even agree on whether the issue should be studied, much less on an aggressive plan for repairs. A bond issue to repair the building, even supported by the ultra-conservative editorial board of The Oklahoman, was deemed out of the question by House Republicans even before the session began.
It will probably take a major accident and ensuing lawsuit to get the current Republican majority at the Capitol to take action on the building.
Meanwhile, under Fallin’s initial tax cut proposal, 43 percent of Oklahomans wouldn’t even get a tax cut, according to the Oklahoma Policy Institute. The median cut would be just $39 annually. The real breaks go to those with household incomes in the top 1 percent. The plan would reduce revenue by more than $100 million a year. The current Senate plan would reduce revenues even more.
Let’s get back to education, which is just one area of government that has faced decreased state support in recent years. Gene Perry, an analyst with OK Policy, points out that funding for state schools has decreased by $200 million in the last four years and that higher education has seen its state support drop by 26.2 percent in the last five years.
It is fundamentally wrong to reward millionaires with tax breaks while systematically defunding state educational institutions. All of us who live here are going to pay the price for this ideological error.