In study from Americans for Prosperity, Analyst takes critical view of State Question 779
Published: November 1st, 2016
OKLAHOMA CITY – With Election Day 2016 only a week away, and early voting beginning on Thursday (November 3), thousands of Oklahomans are still searching for the answers to the numerous state questions that will appear on the Nov. 8 ballot. One of these questions is State Question 779, which would put a one-percent increase in the state sales tax into the state constitution.
Proponents of the ballot question are pushing the sales tax as a way to raise teacher salaries and, thus, help our state’s education system by attempting to attract better teachers for our students through better pay.
On the other side, opponents say that the tax will jeopardize municipal programs, such as MAPS in Oklahoma City, and drive consumers online — keeping them from shopping local, thus hurting rural Oklahoma economies. Opponents also say the sales tax is an extremely regressive tax as it garners a disproportional amount of income from lower income families.
A new critical guide to the proposition, released last week, attempts to shed some light on where all the revenue from this sales tax would actually go. Author Robert Aery, Deputy State Director for the Oklahoma chapter of Americans for Prosperity (AFP), crunched the numbers and concluded the tax would have a profound impact on how Oklahoma and its cities compare across the country when it comes to sales tax numbers.
A one-percent increase to the state sales tax will yield a 22 percent increase in the state sales tax burden (the actual increase on the average Oklahoma family’s sales tax paid throughout the year). That breaks down to just over $420 a year per Oklahoma family, Aery concluded.
A one percent increase in state sales tax would vault Oklahoma City and Tulsa into the fifth and third spots, respectively, on the list of 50 highest taxed cities in America, That would give Oklahoma, the AFP analysis indicates, the not-so-sought-after title of “State with the Highest Combined Sales Tax in the Country.”
Furthermore, Aery found that due to spending restrictions in the measure, less than 60 percent of total revenue generated from the tax would be spent on teacher pay raises. The remaining funds would go largely to higher education, early childhood education and career and technology education.
If the levy passes on Nov. 8, distribution of the revenue will be based on the state aid formula for funding education. The report states that according to the Oklahoma State School Board Association (OSSBA), distribution would provide millions of dollars to several large school districts and leave some smaller schools with only a few thousand dollars.
As for accountability in the spending of dollars, the State Auditor will be tasked with tracking dollars spent on common education. However, that oversight is not required for money spent on higher education. The portion that will go to higher education, which is directed by the proposed amendment to be spent on “improving college affordability, or otherwise in the improvement of higher education.” Aery’s anallysis for AFP contends this broad language in the question might not guarantee that the money would not be spent on any number of things other than college affordability.
The study can be found in its entirety at www.779facts.com.