Monday, February 24, 2014
PRACTICE WHAT YOU PREACH!
Weekly Opinion Editorial
PRACTICE WHAT YOU PREACH
by Steve Fair
Last week, the Oklahoma State Senate Finance Committee voted 8-2 to move forward SB #1246, a bill that would reduce the top marginal individual state income tax rate from 5.25% to 5% starting January 1, 2014. The proposal would also reduce taxes to 4.85% starting in 2015. In its fiscal impact statement, the Oklahoma Tax Commission projects the cuts will decrease revenue to state coffers by $53 million in 2015 and up to $172 million in 2016. Over a three year period, the OTC says the proposed cut would allow Oklahoma taxpayers to keep $238 million of their hard earned dollars that otherwise would have gone to state government.
But the devil is in the details. According to some sources, not ALL Oklahomans will be getting a tax cut- some will actually see their state income tax bill increase. There are some deductions that will be eliminated, increasing some citizen’s tax liability. Lawmakers are calling that portion of the bill ‘reform.’ The next stop for the bill is the Senate floor.
“This is a common sense reform that will bring us into line with what other states are doing,” Senator Kyle Loveless, (R-Moore), the bill’s author, said. “By combining this reform with a tax reduction, we’re taking a prudent approach that will help our citizens and create jobs while still remaining sensitive to the current budget dynamics we’re facing.” Three thoughts about the income tax reduction proposal.
First, Oklahoma state government can be leaner. According to the Oklahoma Office of Management and Enterprise Services, from 2003 to 2013, total Oklahoma state government spending has increased by $6.37 billion, or 59.75 percent. That rate of growth substantially outpaced inflation, population growth and personal income growth in the state during the same period. State collected tax revenue is up over 62% during that same period. How can state government, under Republican control, spend more than liberal Democrats did? Disappointing!
Second, there is no doubt Oklahoma government should be leaner. The real problem is finding the waste. Conservative lawmakers appear to lack the political will to take on bureaucrats and state agency heads when it comes to their budgets. The first step would be to simply require them to start from zero in their budget requests. Agency heads should be justifying every dime they request from the taxpayers. Third, the legislature needs to give the State Auditor the statutory authority to perform comprehensive performance audits on every agency that gets a penny of state taxpayer money. And finally, they need to have the courage act on the findings. That’s where the ‘political will’ part comes to play. Fat is fat even when it’s in your district. They need to cut the fat. Elected officials have to start thinking about the next generation, not the next election if they want to get Oklahoma’s fiscal house in order long-term.
Third, Oklahoma taxpayers should keep more of their money. While flawed, this tax cut proposal should be passed and signed into law. Oklahoma taxpayers need the relief. According to taxfoundation.org, Oklahoma ranks #40 in the U.S. in overall per capita tax burden. While that doesn’t sound too bad, you must remember Oklahoma ranks #43 in per capita income nationally. We are a poor state and while we’re doing better than we have in the past, we are still underpaid and overtaxed. It’s time to let Oklahoma taxpayers keep more of their money. After all, it is THEIR MONEY.
Critics of the state income tax cut will say that state government needs the money for public schools, roads, bridges, law enforcement, etc. They will moan and cry that any tax cuts will hurt the children and that cuts are the work of heartless, selfish people who don’t care about the ‘little guy.’ But who among us believes the state government budget should have ballooned nearly 60% in the past ten years, while during that same period the average salary in the U.S. only increased half that amount?
Fiscal responsibility is not just a great campaign position statement that looks good on a push card- it’s great policy. Sadly, many Republicans in Oklahoma haven’t practiced it as much as they have preached it.