Legislature

The Oklahoma Policy Institute has published an insightful research brief that calls for more transparency regarding the state’s numerous tax exemptions.

The brief, titled “Let There Be Light: Making Oklahoma's Tax Expenditures More Transparent and Accountable,” points out the huge reduction in revenue because of the exemptions, which are known as tax expenditures.

According to a summary of the brief:

The Oklahoma Tax Commission (OTC) identifies over 450 separate provisions of state law that provide for some reduction in the amount of state taxes that would have been collected but for preferential tax treatment. The total cost of tax expenditures - at least $5.6 billion in FY ’08 – equals more than 75 per-cent of total state appropriations and grew by over $1 billion, or 23 percent, in just two years.

OK Policy argues that these tax expenditures should be more transparent and also reviewed, especially given the state’s current budget crisis. Are the tax exemptions effective?

States often use tax breaks as an incentive for economic development, but sometimes these breaks are not needed or become unnecessary as time goes on. Now is obviously a good time to take a closer look at these tax breaks and see if they’re working.

State Sen. Tom Adelson, a Tulsa Democrat, has pointed out the state could save $259 million by ending some tax credits. He has also argued that tax exemptions to oil and gas producers do not provide incentive. This echoes comments by George Kaiser, a Tulsa oil executive and well-known philanthropist, who said new wells would be drilled even if the exemptions weren’t in place.

Energy companies are going to go where the oil and gas is regardless of how many tax breaks they get in doing so.

Last year, I wrote about Kaiser’s comments and the whole concept of “trickle-down” economics here.

According to my post:

The “trickle-down” theory of economics was finally repudiated under the President George Bush administration, which left the country with its worst economic crisis since the Great Depression. Let me repeat this: Tax cuts given to rich people don’t stimulate the economy; they simply make rich people richer. The economy always does better when government invests in its people and infrastructure.

Update: Scott Cooper has published an excellent story about the issue this week in the Oklahoma Gazette.

A proposed legislative bill would allow Oklahoma voters to decide if insurance companies should cover treatments for autism.

State Rep. Mike Brown (D-Tahlequah) has filed House Joint Resolution 1068, which if approved, would ask voters to add this amendment to the state constitution: “Any health insurance provider offering comprehensive coverage within the State of Oklahoma shall provide coverage for neurobiological disorders such as autism.”

The issue of providing coverage for autism has been a contentious one. Last year, Republicans killed “Nick’s Law,” a bill named for an Edmond youth with autism. His father, Wayne Rohde, and some legislators, had pushed for the legislation. But the bill was killed in a legislative committee.

Requiring insurance companies to cover autism is the right thing to do and some states already require such coverage.

The state GOP leadership argues this mandate could sharply increase overall insurance costs, but that’s not true. That argument is simply a distorted projection. Those who support coverage for autism argue that the increase costs would be minimal, which has been the case in other states.

Here’s a decent report on the cost issue.

Will the Republican leadership oppose Brown’s resolution? If the resolution passes, will the vested interests—primarily the health insurance industry—throw a lot of money into an election fight in order to deny coverage for those who suffer from autism?

The state faces a major budget crisis, but that apparently won’t stop a Norman legislator from proposing a bill to create a “Second Amendment Weekend” that would exempt gun sales from taxes over a three-day period each year.

State Sen. John Sparks, pictured right, has told the local media the bill is about supporting the Second Amendment, but it’s simply a way to increase gun sales and reward gun sellers and buyers. How can anyone think lining the pockets of gun sellers with money or making guns cheaper is supporting a constitutional amendment?

So let’s look at the Second Amendment:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

Note how the word “militia” is integral to the amendment. Note the amendment contains no language about using guns for hunting or personal protection or collecting guns, which are the primary uses of weapons among non-criminal, civilian citizens. This amendment, many scholars argue, is about potential military action.

Does Sparks want us to support the idea of modern-day militias in general? How does he define militias and “Arms”? What does his proposed bill, which would primarily benefit gun sellers, gun enthusiasts, hunters and people who want to protect themselves, have to do with “the security of a free State?”

Unless Sparks, a Democrat who faces re-election this year, can give cogent answers to these questions, then his proposed bill seems more like a political stunt designed to appease those Second Amendment radicals, who think everyone should be allowed to openly carry loaded weapons wherever they go. This is an irrational argument the amendment clearly does not address.

Let’s be clear. Many people believe there’s nothing wrong with hunting, gun collecting and guns for self-protection, but there IS something wrong with proposing a bill that doesn’t do what its author proclaims it to do. How, for example, does making it cheaper to buy a hunting rifle support the concept of militias and the importance of state security?

This bill would increase the state’s budget problems, albeit on a small scale, as state employees face furloughs, vital social service programs are being cut and the state’s public schools collectively face a massive shortfall. The legislature should vote this bill down, but it’s highly likely few Oklahoma politicians will run the political risk of opposing it.