Does Oklahoma really have a balanced state budget for next fiscal year, anyway, and how much more will middle-class Oklahomans have to pay in taxes while dealing with reduced appropriations in areas such as education?
— Crain's (@crains) May 23, 2016
There’s growing speculation that segments of the recent budget agreement, passed by the Oklahoma Legislature, could be challenged in court as unconstitutional on the grounds they are tax increases that were not approved by a three-fourths majority of legislators as prescribed by law.
The main issue, and this came up at the time of legislative debate, is the segment of the overall agreement that eliminates what’s called the “double deduction,” which allows Oklahomans who submit itemized tax returns to deduct state taxes on both federal and state tax returns. The measure, Senate Bill 1606, received a three-fourths majority in the Senate but not in the House, and is or maybe “was” expected to generate an estimate $97 million to help fill the $1.3 billion budget shortfall.
So is it a tax increase when an estimated 300,000 people pay higher state income taxes because of a bill passed by the legislature?
That question answers itself. Republicans, who control Oklahoma government right now and who created the disastrous $6.8 billion budget, absolutely know there are constitutional restrictions on tax increases that require a three-fourths vote in the legislature or a popular vote. It was, after all, conservative anti-tax ideology that helped create the three-fourths requirement in the early 1990s, which voters endorsed.
Under the tax and appropriation scenario created by Republicans, those middle-class Oklahoma parents with students in both public schools and public colleges will face a draconian situation. First, their children in K-12 will face cuts in programs and larger class sizes. Second, if the parents are helping their children financially attend a public college here, they will face a new tuition rate in the fall that’s going to skyrocket because conservatives have cut funding to higher education by nearly 16 percent. Third, the parents will lose the double deduction on their state taxes so they will have less money to pay for the tuition increase.
Some of these hypothetical parents work in education and could be impacted as well by possible salary and benefits cuts. So it’s clear that many people in the progressive or the intellectual segment of our population will suffer the most under the budget in terms of the basic dollar amount. They’re going to pay more money for a reduced quality of life.
The double-deduction might be archaic, and most states don’t allow it, but eliminating it this year places a particular and specific burden on middle-class Oklahomans.
The recent income tax cuts here have primarily benefited the rich while tax breaks given to oil and gas companies have devastated the state finances. This is a deliberate conservative strategy to break Oklahoma financially until it’s no longer viable in terms of education, health and social services. It’s a Republican plan, not a result of a downturn in the oil patch.
Priorities. Tax breaks for oil companies and the wealthy, tax increases for the poor, layoffs for teachers. https://t.co/lvgltgG5ao
— Teach2Progress (@Teach2Progress) May 30, 2016
It’s probable at least one segment of the budget will receive a court challenge, and it should just in order to establish more fully the definition of a tax increase in Oklahoma so there’s no or at least less uncertainty. There’s also an argument to be made that ending or reducing tax credits, such as the legislative vote to reduce the Earned Income Tax Credit this year, could be construed as a tax increase. That specific measure also didn’t receive a three-fourths majority vote from both the House and Senate.
The legalese of taxation, in general, always seeks to obscure this truth: If you’re suddenly paying more in taxes or getting less in a refund because of an elimination or reduction in a program, then, yes, your overall tax burden has increased. You’re paying more or you’re getting less money.