COMMENTARY: If an Oklahoma income tax cut never happens, blame politicians, not the state Supreme Court
Published: January 8th, 2014
OKLAHOMA CITY — Once upon a time (2012, to be precise), Gov. Mary Fallin and legislative leaders electrified the conservative Republican base with promises of a methodical (projected to take a decade or more for implementation) move toward elimination of the hated state income tax.
Alas for those clinging to dreams of smaller government and lower taxes – that is to say, a majority of state voters – the newly dominant political class in Oklahoma soon backed away from creation of a taxpayer’s paradise.
Elected officials deadlocked at the end of the 2012 legislative session, and actually flirted with changes to the tax structure that would have increased the income levy on at least some Oklahomans.
Then, in the 2013 session, the Legislature passed, and Gov. Falllin signed, House Bill 2062, with language to reduce the income tax by .25 percent … in early 2015, i.e. in the early days of Fallin’s presumed second term.
The law would have also triggered an additional small reduction in 2016, if the state economy behaved itself and continued to grow.
Better than nothing, but hardly transformational.
Now, even those incremental steps are at risk.
In an all-too-casual act of defiance, lawmakers globbed together the income tax cut with an unrelated issue, namely state Capitol improvements.
This rather clearly violated the “single-subject” rule in the state constitution, which bans the practice of “log-rolling.”
When the tax cut/Capitol repairs bill was challenged, the justices of the state Supreme Court did not blink. The jurists in December ruled that long-standing precedents remain binding: Mixing more than one issue in a statute is verboten.
Last spring, in the halls of the Capitol, members of legislative staff, political junkies and even a few journalists – in quiet moments walking the halls and speaking among themselves – wondered aloud, “Maybe they threw the two issues together because they don’t really want to cut taxes?”
State Rep. Mike Ritze, R-Broken Arrow, was an original co-sponsor of the “clean” (one issue only) bill to nip at state income taxes. When the Court stuck to its guns on Dec. 17, he told reporters, “I am very pleased that the Oklahoma Supreme Court ruled in favor of the state Constitution today, despite the fact that the bill included a tax cut that would have helped all Oklahomans. At the end of the day, it is far more important that Legislators abide by their oath to defend the Constitution as the state Supreme Court has done with this ruling.”
Ritze had pulled his name off the tax cut bill, H.B. 2062, after the Senate added the Capitol Repairs to it.
Ritze’s often-ornery partner in principle, state Rep. Mike Reynolds, R-Oklahoma City, said it was “a very simple case for the Court decide.” He observed, “It would have been very easy to pass the tax-cut bill without the leadership’s pet project of Capitol improvements. That’s why the founders created the single-subject rule. This ruling was a victory for transparency, and I applaud the Court’s decision.”
The development of public policy can, and too often does, happen willy-nilly, in response to short-term pressures and the tides of elite or public opinion. However, there are also times when a determined leader or group of leaders can stay focused and true to stated purposes, and thereby achieve significant things.
In the modern era, the Reagan income tax cuts in 1981 are an example. (For that matter, John F. Kennedy’s similar policies in the early 1960s are equally instructive.)
Many and perhaps most Oklahoma conservatives thought the state was at the dawn of a new era of smaller government and lower taxation when Gov. Fallin promised (in the foreward to ‘Rich States, Poor States’ for the American Legislative Exchange Council) “the most significant tax cut in state history.”
Indeed, Fallin set the hearts of supply-siders everywhere a-twitter when she said Oklahoma would chart a course “toward the gradual elimination of the state income tax.”
That was then and this is now.
Last month, after the Supreme Court decision slapping down the mix of tax cuts and Capitol repairs — and when budget analysts projected slightly tighter state revenues, the governor told Capitol reporters, “We’re going to continue to talk to the Legislature about what is possible this legislative year as far as it relates to tax cuts. We still believe in that as a state, but we do have a lot of other needs in Oklahoma.”
Enquiring minds want to know whether or not state leaders really intended to cut Oklahoma state income taxes in 2012 and 2013.
If they did, they still can.
You may contact Pat at Patrick@capitolbeatok.com .