Supt. Barresi Thanks Legislative Leaders for Additional Funds

State Superintendent Janet Barresi last week thanked legislative leaders for shepherding approval of additional dollars so that school districts across the state can receive a total of $33 million for instructional and textbook purposes.

“Our first goal should be to get dollars to the classroom, where funds can help students,” said Barresi. “These additional dollars will help to lessen the impact of a tough budget year.”

Senate Bill 1535 passed the House of Representatives last week 88 to 3. The bill appropriates an additional $3 million to Oklahoma’s education budget. The money will help to offset a potential shortfall and will allow $33 million to be disbursed to districts to help them cover costs for a variety of instructional purposes. Traditionally earmarked for textbook expenses, for the past few years local districts have been given flexibility to spend the dollars on other needs.

Barresi said that same flexibility for districts would continue and that the full $33 million would be distributed to districts. Lawmakers earlier passed legislation that diverted a portion of the textbooks fund to the general education budget, something Supt. Barresi had not sought. The additional funds approved today ensures those dollars can be used for their original purpose.

“While the standstill state budget passed for education will create funding challenges, we will continue to work with lawmakers to seek supplemental appropriations in the upcoming legislative session next year,” Barresi said.

State Sen. Clark Jolley (R-Edmond), chair of the Senate Appropriations Committee; State Sen. Jim Halligan (R-Stillwater), chair of the Senate Appropriations Subcommittee on Education; State Rep. Earl Sears (R-Bartlesville), chair of the House Appropriations and Budget Committee; and State Rep. Lee Denney (R-Cushing), chair of the House Appropriations and Budget Education Subcommittee, have pledged to work to restore funding for the state education budget in the next legislative session beginning in February 2013.

“I’m grateful to Senator Jolley, Senator Halligan, Representative Sears and Representative Denney for their work on this issue — as well as to Speaker Steele and Senate President Pro Temp Brian Bingman,” Barresi said.

House won’t take up any bill that raises taxes

OKLAHOMA CITY – House Republicans on Wednesday advanced a new income tax reduction measure that ensures Oklahomans receive either an income tax reduction or no tax change at all.

HB 3038 was signed out of the House General Conference Committee on Appropriations on Wednesday. The Senate now must act to advance it from the Senate General Conference Committee on Appropriations in order for it to be heard by both chambers.

“The House has kept this issue alive and it’s now up to the Senate to deliver tax relief for working Oklahomans,” said House Speaker Kris Steele, R-Shawnee. “The next step is for the Senate to hear the bill in their committee. I hope they pass this plan and uphold the commitment we’ve all made to the people of Oklahoma to lower their taxes. The ball is in their court.”

If House Bill 3038 is implemented, a large majority of taxpayers would receive tax reductions, a small amount would see no change and no taxpayers would experience a tax increase, according to the Oklahoma Tax Commission. 

HB 3038 proposes three growth triggers that would reduce the top personal income tax rate to 4.5 percent within three to ten years, dependent upon revenue growth. Each trigger would result in a .25 percent reduction. In order for the trigger to take effect, there must be a 5 percent annual growth in collections of motor vehicle taxes, use taxes, sales taxes, income taxes and corporate taxes apportioned to the general fund (for details, see attached bill and attached summary document).

“This plan is a lot like the tax reductions Oklahoma Republicans have enacted consistently for nearly 15 years in order to lower the rate from 7 percent in 1998 to 5.25 percent today. It allows us to continue down that path in a responsible, methodical manner that won’t cause any taxpayers to pay more,” Steele said.

The new plan keeps the current tax bracket structure and personal exemption intact. The tax bracket structure change and personal exemption modification proposed in HB 3061 – the bill supported by Senate leaders – are among the reasons why some taxpayers would see a tax liability increase under HB 3061.

“The House won’t take up any bill that raises taxes. Raising taxes isn’t what conservatives stand for, it’s not what Republicans stand for and it’s not what the House stands for,” Steele said.

Rep. Leslie Obsorn, R-Mustang, said HB 3038 is a responsible way to continue the economic momentum Oklahoma has experienced in recent years.

“This is a simple, straightforward way to lower taxes without having to raise anyone’s taxes,” said Osborn, the principal House author of HB 3038. “It’s not overly complicated. It doesn’t pick winners and losers, like the previous plan. It just says when government revenues grow, tax reductions should occur. That’s what we fundamentally believe as Republicans.”

HB 3038 would not affect the proposed fiscal year 2013 state budget because it does not mandate a tax reduction in fiscal year 2013.

“It won’t cost us a cent next year,” said Rep. Earl Sears, R-Bartlesville, chairman of the House Appropriations and Budget Committee. “It’s a win-win deal. Tying these triggered tax cuts to actual growth makes them far easier to pay for because they won’t go into effect unless the state has far more revenue than it did the previous year.”

New income tax cut plan proposed by House Republicans

New proposal contains no tax increases

OKLAHOMA CITY – House Republicans plan to introduce a new income tax reduction measure Wednesday that ensures Oklahomans receive either an income tax reduction or no tax change at all.

“We came here to lower taxes for hardworking Oklahomans we’re going to do exactly that with this new plan,” said House Speaker Kris Steele, R-Shawnee. “We’re excited about this plan, we believe in this plan and we’re going to pass this plan along to the Senate. Anyone who is for lower taxes should be for this plan.”

The new plan proposes three growth triggers that would reduce the top personal income tax rate to 4.5 percent within three to ten years, dependent upon revenue growth. Each trigger would result in a .25 percent reduction. In order for the trigger to take effect, there must be a 5 percent annual growth in collections of motor vehicle taxes, use taxes, sales taxes, income taxes and corporate taxes apportioned to the general fund. The criteria for the triggers are the same criteria used for the trigger in HB 3061, the previous income tax reduction proposal.

The new income tax plan will be contained in an amended version of HB 3038 that will be introduced during the House General Conference Committee on Appropriations meeting at 1:30 p.m. Wednesday.

Speaker Kris Steele

“This plan is a lot like the tax reductions Oklahoma Republicans have enacted consistently for nearly 15 years in order to lower the rate from 7 percent in 1998 to 5.25 percent today. It allows us to continue down that path in a responsible, methodical manner that won’t cause any taxpayers to pay more,” Steele said.

The new plan keeps the current tax bracket structure and personal exemption intact. The tax bracket structure change and personal exemption modification proposed in HB 3061 are among the reasons why some taxpayers would see a tax liability increase under HB 3061.

“This House cannot fully embrace that plan because it would raise the tax liability of too many Oklahomans,” Steele said. “While the bill as a whole does represent a net tax decrease, we just can’t embrace the portion of it that leads to a tax increase. We had serious discussions about this matter and have come out more determined than ever to reduce taxes for all Oklahomans.”

House Republicans rallied in support of the new plan.

Rep. Leslie Osborn
R-Mustang

“This is a simple, straightforward way to lower taxes without any having to raise anyone’s taxes,” said Rep. Leslie Osborn, R-Mustang, the principal House author of HB 3038. “It’s not overly complicated. It just says when government revenues grow, tax reductions should occur. That’s what we fundamentally believe as Republicans.”

The new plan would not affect the proposed fiscal year 2013 state budget because it does not mandate a tax reduction in fiscal year 2013.

“It won’t cost us a cent next year,” said Rep. Earl Sears, R-Bartlesville, chairman of the House Appropriations and Budget Committee. “It’s a win-win deal.”

The earliest possible trigger would be for fiscal year 2014. Preliminary Tax Commission estimates show the cost of the first trigger as $120.5 million, $152.3 million for the second trigger and $172.9 million for the third trigger. The cost of each trigger would be spread across two fiscal years due to the difference between tax years and fiscal years.

“Tying these triggered tax cuts to actual growth makes them far easier to pay for because they won’t go into effect unless the state has far more revenue than it did the previous year,” Sears said.

Governor Fallin Signs Supplemental Funding Bill

OKLAHOMA CITY – Governor Mary Fallin today signed into law Senate Bill 1959, which provides $92.5 million in emergency supplemental funding for needs in education, public safety, natural disaster relief, and at the Chief Medical Examiner’s Office. The governor released the following statement:

“Today’s supplemental funding measures will help to ensure the state of Oklahoma is keeping its commitment to our teachers, protecting our citizens by putting more troopers on our state highways, and providing necessary assistance to communities hard-hit by natural disasters. It also provides necessary personnel and equipment upgrades at the Office of the Chief Medical Examiner, helping to put that agency back on a path to accreditation.

“All of these funding measures are both urgent and necessary. I applaud the Legislature for sending this supplemental bill to my desk quickly, and I am happy to be able to sign it into law.”

SB 1959, authored by Sen. Clark Jolley and Rep. Earl Sears, includes emergency funding provisions for natural disaster assistance to local communities, counties and other qualified entities ($34.1 million); insurance benefits for teachers and support staff ($37.6 million); a trooper academy for the Department of Public Safety ($5 million); personnel and equipment for the State Medical Examiner’s Office ($1 million); and funding for teacher National Board Certification bonuses ($14.8 million).

House Republicans outline tax credit reforms

OKLAHOMA CITY – Oklahoma’s tax credit system would undergo widespread reforms under a plan outlined by House Republican leaders last week.

“A tax credit should benefit taxpayers more than it costs them. Period. That hasn’t been the case in Oklahoma, but under this plan, it would always be the case,” said Rep. David Dank, R-Oklahoman City, chairman of the joint legislative Task Force for the Study of Tax Credits and Economic Incentives.

Dank said meaningful tax credit reform is an important first step for the Legislature to take as it considers reducing and phasing out the state’s personal income tax.

“We need to remember that we cannot accomplish real tax relief for all Oklahomans until we put an end to the costly sweetheart deals that have been handed to a very few in the past. Those giveaways cost us hundreds of millions of dollars each year. Ending tax credit abuse is one vital ingredient in assuring lasting tax relief for all,” Dank said.

The strategy outlined today would save between $250 and $300 million in fiscal year 2013 and continue saving millions of dollars annually in the future. It proposes:

• Extending the current moratorium on all tax credits another two years;
• Enacting a constitutional amendment establishing specific criteria for tax credits;
• Ending transferability of tax credits; and
• Requiring all future tax credits and all credits placed on moratorium to meet the constitutionally-required criteria and receive legislative approval in order to be enacted or removed from moratorium.

“Oklahoma’s tax credit system today is a big block of Swiss cheese with no rhyme or reason whatsoever to all its holes and cutouts. It’s time to wipe the slate clean and start over,” said House Speaker Kris Steele, R-Shawnee. “This policy is as pro-growth and fiscally conservative as it gets. It’s the right thing to do for taxpayers and will result in a better tax credit system that leads to economic growth without wasting taxpayer dollars.”

If all the reforms are enacted, all tax credits placed on moratorium would have to be brought back one-by-one by affirmative votes of the Legislature under criteria that would be in the state Constitution. Future credits would also require legislative approval and would have to meet the constitutionally-required criteria.

Steele plans to seek a constitutional amendment that would place the tax credit criteria adopted by the task force in the Oklahoma Constitution. House Joint Resolution 1089, by Steele, would send the criteria to a vote of the people in November. If approved, the criteria would be placed in the Constitution.

Under the criteria:

• All credits would require pre-approval by the Legislature;
• No tax credit would be transferable;
• All tax credits would be subject to full transparency and regular auditing by the State Auditor;
• Any proposed tax credit would have to be accompanied by a fiscal impact statement detailing how it would affect the state budget;
• All tax credits would be subject to caps and specific termination dates;
• No tax credit could be enacted within the final five days of any legislative session.

“It protects taxpayer dollars – plain and simple – and ensures all tax credits actually benefit the state,” Steele said. “But get ready, because as soon as we speak a word of this proposal, special interest groups are going to start lobbying tooth and nail in defense of their credits. Our message to them is simple: If the credit meets the criteria, the credit is useful and can stay, but if it fails the criteria, it’ll have to go.”

House Bill 2978, by Dank, would statutorily enact the criteria.

House Bill 2976, by Dank, would extend the tax credit moratorium that has been in place since 2010 for another two years. The extended moratorium only applies to tax credits. It does not apply to tax incentives such as the Quality Jobs program and certain engineering and oil and gas incentives that Dank said have adequate safeguards and produce net economic gains that exceed the cost of the incentives.

“An extended moratorium gives the Legislature additional time to consider the worthiness of each individual tax credit and to put in place specific criteria the task force believes must apply to all tax credits, be they existing or future proposals,” Dank said.

HB 2979, by Dank, would end transferability of tax credits.

“Transferable credits are bought and sold like poker chips by folks who’ve provided zero services to the state. This practice was identified by the task force as perhaps the most constitutionally questionable aspect of the entire system. It must end,” Dank said.

House Bill 2977, by Dank, would extend the Task Force for the Study of Tax Credits and Economic Incentives for another year, until January 2013.

“It benefits us to have the task force continue the analysis it started last year and serve as a watchdog as this reform process plays out over the next few years,” Dank said.

Rep. Earl Sears, the House Appropriations and Budget Committee chairman, said the reforms will have a direct benefit on the FY 13 state budget and future budgets.

“We’re talking about hundreds of millions of dollars here that we can use to fund core services or return to taxpayers. It’s a significant opportunity for us,” said Sears, R-Bartlesville. “I’ve been honored to be part of the task force and believe Chairman Dank’s leadership has been outstanding. This is what good, honest government is all about.”

NOTE: For accompanying video, go to http://www.okhouse.tv/iViewVideo.aspx?VideoID=403

State Board of Education Approves Budget, Legislative Leaders Praise Action

Legislative leaders praised the financial plan approved today by the state Board of Education, saying it maximizes classroom funding even in a tough financial environment.

“Faced with difficult choices, the school budget approved today strikes the right balance by funding those programs that provide the most direct benefit to students,” said state Rep. Earl Sears, a Bartlesville Republican who chairs the House Appropriations and Budget Committee. “The budget adopted today will allow our schools to continue their important mission of preparing the next generation of leaders for college and the workforce.”

“This is the third year the state has faced a major budget shortfall, and government continues to adjust to the ‘new normal’ of budget austerity,” said state Sen. David Myers, a Ponca City Republican who chairs the Senate Appropriations Committee. “However, the budget approved today for Oklahoma schools adopts the right approach by prioritizing student learning over bureaucracy and fulfilling important funding obligations established in law. I appreciate the strong leadership of Superintendent Barresi in making the tough decisions necessary to guide our schools through this tough financial time.”

State Senator Clark Jolley also praised State Superintendent Janet Barresi and members of the state Board of Education for funding reading programs throughout the state.

“Our recent reforms to end social promotion for students who can’t read after the third grade can only succeed with the appropriate level of support,” said Jolley (R-Edmond). “I appreciate the hard work that Superintendent Barresi did in making sure that reading sufficiency funding was addressed in this tight fiscal climate.”

Superintendent Barresi today recommended that the board approve an approximately $401 million school activities budget for fiscal year 2012 that includes more than $6 million for reading sufficiency programs.

Additional attachment

Rep. Earl Sears made National Review

Rep. Earl Sears
R-Bartlesville

Oklahoma State Rep. Earl Sears is mentioned in the Feb. 21 issue of National Review. Check it out to learn about Rep. Sears new friendship with Gov. Jeb Bush. Thank you to the okschoolchoice blog for the information.

You can come listen to Gov. Jeb Bush when he's in town March 30th.

Speaker-elect Kris Steele announced top leadership appointments today

State Rep. Dale DeWitt, R-Braman, will serve as House Majority Leader, a new position created to facilitate leadership meetings, assist in communication with the state Senate and Governor’s Office, and help guide the majority agenda through the legislative process.

State Rep. Dan Sullivan, R-Tulsa, will serve as the Majority Floor Leader and will oversee the daily floor activity of the House during. The Floor Leader will also assign bills to appropriate committees.

State Rep. Earl Sears, R-Bartlesville, will serve as chair of the House Appropriations and Budget Committee and will oversee the formation of the state’s budget for various agencies and departments.

State Rep. Skye McNiel, R-Bristow, will serve as Majority Whip and will head a team of assistants whips who will establish effective communication for the Republican caucus on a wide arrange of issues and work to advance legislation on the House floor.