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Does Tax Cut Measure Contain ‘Poison Pill'?

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After watching the Oklahoma House debate and then pass future income tax cuts for 2015 and 2016 on Wednesday, I almost have to wonder if Republicans haven’t intentionally placed a poison pill in the legislation through the process of logrolling.

The overall GOP argument for the cuts—basically, let’s cut taxes to make businesses locate here—was as vague and sloganeering as it gets and lacked any real, accepted empirical evidence beyond right-wing distortions and wishful thinking. The overall, rhetorical defense of the tax cut on Wednesday lacked basic conviction.

Meanwhile, the tax-cut legislation, according to Republican state Rep. Scott Martin, a Norman Republican, does “two fantastic things.” (Note the word “two.”) Those two things: (1) It cuts the top income tax rate from 5.25 percent to 5 percent in 2015 and then, perhaps, to 4.85 percent in 2016 if revenues go up enough to pay for the cut, (2) and it provides $120 million funding for repairs of the state Capitol building, two diametrically opposed initiatives.

The process of adding unrelated subjects to legislation in an attempt to circumvent the democratic process is called logrolling, and it’s unconstitutional here in Oklahoma. No matter how the Oklahoma Supreme Court eventually rules on this legislation, Republicans by their own admission and rhetoric have clearly separated it into two—shall we count it again, two, two subjects in one--different initiatives. It seems, forgive the word play, almost “two” obvious.

How many Republican legislators were willing to buck the bullying of the GOP leadership and vote no, either because they oppose the tax cut or the immediate allocation of money to repair the crumbling Capitol building? To be sure, seven Republicans did stand up, but in the end the vote was 65 to 35 to approve the measure, and now Gov. Mary Fallin will sign House Bill 2032 into law.

Fallin and the rest of the GOP leadership had to know the legislation would eventually face a constitutional challenge in the courts because it contains more than one subject so their overall reasoning deserves any speculation it can muster. Either they intentionally poisoned the legislation knowing it would never become law or, probably more likely, they’re simply rolling the judicial dice, knowing they can always come back next legislative session and pass the same or even larger tax cut for 2015.

Either way, Republicans can proudly say they passed a tax cut in 2013, which seemed to be the main purpose of the legislation, anyway, since no cut would go into effect until 2015. Remember, there’s still the next legislative session to undo or revise the whole thing. The entire GOP tax-cut spectacle this session could easily become meaningless next year.

This arcane political process means little or nothing to most ordinary Oklahomans. More than 40 percent of them won’t even get a tax cut under the legislation, and the average cut is only $88 annually. Those with the highest incomes fare much better, of course, because it’s a flat, regressive income tax cut. This is absolutely a tax cut for Oklahoma’s wealthiest citizens, though Fallin insists it “will let Oklahoma families keep more of their hard-earned money.” Well, frankly, governor, only some Oklahoma families, and it isn’t much money at all.

Meanwhile, the 2015 and 2016 tax cuts would cut $237 million from state revenues after a time period of drastic budget cuts to education. The proposed state budget, released yesterday, doesn’t even begin to address inadequate education funding in Oklahoma.

On the brighter side of Wednesday’s action, House Democrats held together and voted unanimously against the tax cut, and state Rep. Scott Inman, a Del City Democrat and the House minority leader, delivered the day’s most passionate and intelligent remarks about the issue.

Here’s to Inman, and his "it's important" speech. It’s difficult to rouse energy and compassion in one losing cause after another in one of the reddest states in the country, something this blog has tried to do for nearly 10 years now. Inman gives us inspiration to keep up the progressive fight.

Teachers Beware: Pension Politics Could Jeopardize Retirement Benefits

Satirical image from Old American Century

With so much at stake for so many, it’s simply wrong that Republicans Gov. Mary Fallin and Oklahoma Treasurer Ken Miller are working together at the last minute to streamline Oklahoma’s pension plans this legislative session without allowing adequate input from stakeholders.

The Oklahoma Legislature adjourns at the end of the month, and leaders are even hinting at an earlier conclusion, but news reports are only now surfacing that Fallin and Miller have nearly reached a deal or developed a proposal.

What that deal might be is a little bit difficult to ascertain, but it’s highly probable that any proposal would try to reduce the state’s costs in some manner and, given the current ideology in power at the Capitol, possibly shift more costs to pension holders and/or reduce their benefits. At the state Capitol these days, “reform” always means less for ordinary Oklahomans and more for the state’s wealthiest citizens.

In other words, what won’t happen is the honorable thing, and that is for the state government to simply meet its basic commitment to adequately fund the state’s seven pension plans, which now face an $11 billion liability.

Two major contentious issues have emerged. One is to streamline the management of all the plans under one board, an idea that is adamantly opposed by the Oklahoma State Firefighter’s Association. The second one is to somehow begin to change the overall system for new workers from a defined benefit plan to a defined contribution plan, which should worry anyone with a sense of logic. How can you change the system in this way for new workers in a state like Oklahoma without jeopardizing the future benefits of those currently enrolled in one of the systems?

The Oklahoma Education Association has issued a legislative alert about the matter because teachers fall under the woefully underfunded Oklahoma Teachers Retirement System (OTRS), and, on a personal note, I’ve had discussions with current teachers who are extremely concerned they will face reduced benefits when they retire. (Full disclosure: As a professor, I currently pay into the OTRS.) Our state teachers, some of the lowest paid instructors in the nation, working in some of the most underfunded schools in the nation, SHOULD be concerned.

There is no question that the overall liability of the pension plans is a problem, but the real culprit has been the lack of funding for the plans over the years. Our legislators have been more interested in cutting taxes for the state’s wealthiest citizens than honoring basic commitments to teachers, first responders and social workers.

Even as Miller, in particular, talks about the dire need for pension change, the legislature is considering tax cuts spread out over two years beginning in 2015.

Miller, in one news report, claims he and Fallin have been transparent and should have some specific legislation to offer next week.

But why wait until the last minute? It appears to be a political tactic to prevent groups interested in the issue to mobilize in protest. Politics has always been a dirty business in Oklahoma, but this political move, if it happens, is extreme by any standards, especially given Fallin’s undying support for a tax cut.

Boren’s Lament

Image of David Boren

University of Oklahoma President David Boren published a passionate and insightful op-ed last week that encapsulates perfectly the seismic decline of state government funding for public higher education in this country.

I want to first praise Boren’s commentary, and then add some of my own points.

In an aptly titled editorial, “Will public higher education disappear?,” Boren calls the funding crisis of higher education a major threat to our country. “The result of declining state support for public higher education and cost shifting to students,” Boren writes, “is threatening America's role in the world.”

As OU’s president since 1994, Boren makes his argument with good authority. He notes that state funding for OU has declined from 32 percent of its overall budget when he became president to just 15 percent now. Costs have been shifted to students, who often go into debt with loans secured by the federal government.

As a long-time professor in this state I’ve followed Boren’s comments about higher education since he became president, and I’ve read his pleas before for more state funding for higher education. I can’t recall reading a more passionate call for more state funding by Boren, and his points are succinct and convincing. We can’t ruin our public education system in this country without, essentially, ruining our country. I agree with that.

But I would like to add to Boren's comments because I believe he leaves a couple of important things out of his arguments, which need to be addressed in any discussion about funding for higher education.

(1) I couldn’t even pretend to know the influence of the “corporate model of education” on OU, but the philosophy underpinning it has been a complete disaster for more than two decades on the country’s overall public higher education system. The corporate model of education argues that students are consumers and instructors are providers, and their supposed free-market interaction will result in thriving universities. That hasn’t happened. Across the nation, universities face severe budget problems. In fact, the corporate model can be directly blamed for beginning to take the “public” out of “public education,” turning it into a consumer-driven product rather than the sustaining of deeply-needed centers of intellectualism and critical inquiry.

Those of us, like myself, who have spoken out against the corporate model of education have been ignored while powerful higher education advocates, such as Boren, more often than not simply ignore the issue. I can only guess it’s because of political expediency. Conservatives, which now control our own state government, believe in the moral viability of the free market and privatization of government. Some may well see the drop in OU’s state funding as a great victory of the free enterprise system and conservative values. Higher education leaders obviously have to be careful how they phrase their requests for more funding, but nothing can be systematically changed until the corporate model of education is exposed as one of the main culprits in what Boren calls the move to “dismantle public higher education.”

Let’s be clear: Students come to universities to learn, discover and create. They are not coming to buy a pair of shoes at the best price possible nor are universities trying to make the best profit possible by selling shoes. Conflating the academic mission with corporate ideology will result in exactly what we have now: Corporations and the rich people who control them pay less in taxes and students pay more in tuition in a system that is not even remotely sustainable. Both Boren and I will be long retired when it happens, but it’s conceivable given current trends that many of our public universities, especially in Oklahoma, could become private enterprises in the decades to come. Students will get priced out, and the country will rot in its conservative debris.

(2) My second point is that depoliticizing the call for more education funding hasn’t worked here. It’s true that both Oklahoma Republicans and Democrats have participated in creating budgets that have defunded higher education in recent years, but it’s the liberals who have stood up here consistently and argued for more education funding for universities and schools. It’s also the “movement” conservatives, or Republicans, who are most apt to argue in favor of the corporate model of education and tax cuts for the wealthiest among us, which leads to smaller or stagnant state budgets during poor economic times.

Gov. Mary Fallin and the GOP-dominated legislature are even on the verge of cutting income taxes once again under the dubious Republican argument that this will create a better economy here, but it’s probably going to mean less money for higher education down the road.

So my point is that there’s no hiding the fact that education funding issues, with some exceptions, are as politically partisan as anything else in our culture today. Nothing will get done by ignoring this obvious dilemma, as Boren, a former Democratic U.S. Senator, does in his commentary, whether the omission was intentional or not.

For years, universities have been under attack by conservatives, such as David Horowitz, for supposedly embracing liberal values across disciplines, which is a myth. I think many universities, perhaps even at OU, have been overly sensitive to this reductionist argument. The truth of the matter is that liberals actually need more space, freedom and recognition on our state’s campuses, in our culture and in our media here. If that doesn’t happen, then the funding issue for higher education won’t get seriously resolved anytime soon or ever.

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