Tax Cut Forces Regroup

 Image of Oklahoma State Capitol

The state’s tax cut forces are already posturing and signifying their intentions several months away from next year’s legislative session.

Last week, Oklahoma Gov. Mary Fallin, who leads a Republican-dominated state government, told the Wall Street Journal that her party would again push for an income tax reduction, a proposal that failed to pass the legislature last session.

According to StateImpact, Fallin would like to see at least a cut from 5.25 percent to 4.8 percent in the income tax. Such a cut, if not offset by raising other taxes or increasing other revenues, would devastate the budgets of state agencies and educational institutions, which have faced severe cuts in recent years.

It’s important to note that tax revenues remain significantly below what they were before the 2008 economic downturn. It’s simply unconscionable and irresponsible to cut taxes under these conditions unless there are replacement revenues or a specific plan that spells out the ensuing budget cuts. If the GOP wants to continue to layoff teachers and eliminate teaching positions in public schools to give rich people tax cuts, then that’s its prerogative as the party in power, but it shouldn’t hide behind the flimsy argument that a cut will attract more businesses to Oklahoma, making up for any lost revenue.

I know we’re several months away from the renewed tax-cut effort, but reporters and editors for local corporate media outlets should begin discussing how to cover the tax-cut plans that will undoubtedly emerge next session. Here are three areas to consider:

  • How much will it cost? Last session, it was often difficult to determine the cost of the individual tax-cut plans. One problem, as I mentioned, was the impossible-to-determine idea that a cut was going to generate new tax revenue. The corporate media can duly report this GOP myth, but it needs to press for specific numbers from the tax cutters. Obviously, the Oklahoma Policy Institute (OK Policy), a Tulsa-based think tank, has proven itself as a reliable source for tax information, and it needs to be consistently cited in the process, but Fallin, her surrogates and legislative leaders need to be pressed for the exact loss in revenues a tax cut would generate. If they cannot produce a reliable figure—accepted as accurate by OK Policy and others—then the plan should be considered irresponsible.

  • What will get cut? If the tax cut is not offset by other revenues, such as eliminating certain tax credits or raising sales taxes, and there will be budget cuts, then those cuts need to be specifically outlined by the tax plan. The corporate media should demand Fallin and legislative leaders present this information. It’s simply irresponsible not to have a budget-cutting plan that corresponds with any given tax-cut plan. I’m not in favor of more budget cuts, of course, but I also know the Republicans control the government. If the Republicans are going to partially pay for tax cuts by, say, laying off educators and other state workers, then they should be held accountable to it before the plan gets a vote.

  • How much will Fallin get? Last session, I think I was the only voice that called on Fallin to calculate and announce just how much she would receive from a tax cut plan. The tax-cut plans floated last year favored the wealthiest Oklahomans. Perhaps, the best way reporters and editors could explain this is on personal terms. How much would Fallin make under the tax-cut? How much would a teacher making $40,000 or a fast-food worker making $20,000 annually make? This is important. Will GOP leaders like Fallin give themselves a huge tax cut at the expense of school children and the impoverished as morally reprehensible as that might seem or should seem to some people? Perhaps. But if they do so, they need to do so openly. It seems like such an easy question to ask. ”Governor Fallin, how much less will you pay in state taxes under the plan?” But does anyone in the so-called mainstream press corps here have the guts to ask the question? recently published a story in which some state leaders called for more transparency and openness in the state’s budgeting process. Transparency is necessary in order for democracy to thrive, and, in terms of the Oklahoma budget process, the tax cut plan will be center stage next session. Nothing will probably be more critical next legislative session than knowing exactly the impact of any proposed income tax cut. That’s where state government transparency should begin in 2013.