MuskogeePhoenix.com, Muskogee, OK

Columns

May 6, 2010

Let’s cut exemptions, credits, exclusions, deferrals

— Last week we received a glimpse of the anticipated 2011 budget with its potential cuts in public services by all our state agencies. I assumed that there would be specific information for this Journal but it appears that the “big three” — the Governor, House Speaker, and Senate President Pro Tempore — have decided that the Representatives of the people do not need to have access to this fiscal data. What makes it worse is the fact that we have not dealt with any constructive legislative work this week unless you call political posturing constructive legislative work.

As a result of Democratic frustration over this, our caucus decided to offer a proposal that would generate revenue and minimize cuts in jobs and services. From what we do hear there is no getting around the fact that without additional revenues, next year’s budget will require cuts of up to 12 percent across all agencies. This is on top of the losses experienced in the 2010 budget shortfalls, which were modified with federal stimulus and rainy day dollars. Sensible approaches to revenue options are necessary to bridge the $1.2 billion budget gap for this coming fiscal year. The proposal that we have put on the table is to consider cutting some portion of the $5.6 billion in tax exemptions, credits, exclusions and deferrals. This information is available in the Oklahoma Tax Commission data which shows only 134 of the 450 state tax preferences, some of which are critical for maintaining economic stability.

However, in a time of economic crises, and Oklahoma reported as having the worst deficit percentage in the nation, we must be willing to look at those exemptions that are not economically productive or those that only enhance the wealthiest institutions and businesses in the state. We need to look at establishing a means or job creation test on these tax incentive packages since there is evidence that many are merely used to enhance the wealth of those already experiencing benefits at state expense.

The following are some examples from the 2008 tax expenditure report which should receive close scrutiny:

• $1.5 billion tax exemption for sales to manufacturers;

• $40 million in corporate tax credits;

• $56 million in motor vehicle excise tax for used motor vehicle dealers;

• $18.5 million in tuition and educational fees paid to private schools;

• $7 million for exemption on rental vehicles;

• $25 million for bad debt credit tax exemption.

These are merely a sample of the $5.6 billion in tax benefits that we suggest we look at rather than gutting our state agencies and their employees. We might look at taking an across-the-board cut of each of these tax exemption packages. This would be equitable if we cut them at the same percentage that all state agencies are being cut. This will reduce the negative impact that our weak revenue collections are having on our state and economy.

The one legislative item that we did focus on this week was designed to send another message to the nation that we have nothing but contempt for our national government and that we would like to separate ourselves by seceding from any federal rules and regulations. Specifically I speak of HJR 1054 which if passed would authorize the Speaker of the House and President Pro Tempore of the Senate to employ legal counsel to file a lawsuit against the U.S. Congress, the President, and the Secretary of the U.S. Department of the Health and Human Services to prevent the Patient Protection and Affordable Care Act from taking effect. We were told by the bill’s author that this million dollar lawsuit would not cost anything because some law firm would file this pro bono or free of charge. When he was asked to provide documentation of this, he merely scoffed at such a preposterous question. In other words, he does not have this assurance otherwise he would have been more than willing to provide the documentation.

At a time when our budget is creating havoc throughout our state with employee layoffs and furloughs, can we afford to jump on this bandwagon so we can make a statement that we don’t like “Obamacare” as it is rudely referred to by its opponents? This resolution was scheduled to go to a vote of the people and now has changed. I wonder why? Could it be that as we realize the decline of funding for health by the STATE, resulting in drastic effects on our nursing home patients and other needy citizens for federally supported health care assistance that the citizens may actually vote NO!! HJR1054 was thereby converted to a statutory measure in which the people have no say. My only thoughts on this issue as I voted NO were those expressed by Christ in Matthew 25:40 as He was talking of those outcasts of society by telling the scribes “… As you do unto the least of these, you do unto Me.”

Contact Ed Cannaday at P.O. Box 98, Porum, OK 74455; ed.cannaday@okhouse.gov; 484-5701, 448-5702 or Legislative Assistant Cody Boyd, at (800) 522-8502 or (405) 557-7375;  fax (405) 962-7657.

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