Capitol Think tanks tackle state budget woes

January 12, 2010 OKLAHOMA CITY –

One group is asking state lawmakers to sign a no-tax pledge.

The other group says don’t rule out tax increases and wants legislators to take another look at repealing some state tax exemptions.

The problem: a $1.3 billion budget hole.

Plus, it’s an election year.

While state lawmakers and Oklahoma Gov. Brad Henry struggle to write a budget this year, some Oklahoma think tanks are pushing them to sign off on taxes altogether while others counter that $1.3 billion’s worth of pain should be spread across the entire state.

This week, the groups Americans for Tax Reform, the Oklahoma Council of Public Affairs and Oklahomans for Responsible Government issued a joint media release asking state lawmakers to sign a pledge to oppose and vote against any and all tax increases.

“Taxpayers hear empty promises every day from elected officials in Washington about spending and taxes, only to end up disappointed because government decides it wants more and more,” said Brian Downs, executive director of Oklahomans for Responsible Government. “Signing this pledge to keep all tax increases off the table while fixing Oklahoma’s budget gap will give taxpayers some peace of mind that their government leaders here in Oklahoma are listening to them.”

Downs’ statement follows a recent call by the Oklahoma Policy Institute urging lawmakers to consider capping or removing some of the state’s tax exemptions.

“If you look at the all tax expenditures combined, it totals $5.5 billion per year,” said David Blatt, policy director for the Oklahoma Policy Institute. “That’s not much less than the total state-appropriated budget. It doesn’t make sense that we’re slashing funding for public safety and mental health programs and not looking at this array of preferential tax treatments.”

And while both sides agree the state’s budget gap presents a major financial problem for lawmakers, the ideas on how to bridge that gap cover all ends of the political spectrum.

Conservatives, however, want taxes completely off the table.

By signing the pledge, legislators make clear that they will stand up for taxpayers, not tax users,” said Grover Norquist, president of Americans for Tax Reform. “Especially in a recession, higher taxes should be a nonstarter for all Oklahoma legislators. I strongly encourage, and challenge, each of them to sign the pledge before the Legislature opens in February.”

Progressives prefer a different approach.

“I think legislators are elected for their ability to show judgment and leadership,” Blatt said. “I’m not anticipating that they are going to come out and support a tax increase. But if the judgment is the alternative to raising taxes is worse than our state can bear, then legislators should allow themselves that discretion.”

For state Rep. Paul Wesselhoft, a Moore Republican, the best call involves cutting spending, reducing the size of state government and establishing spending priorities.

“I know it’s a difficult time,” Wesselhoft said. “It’s going to take a couple of years to get through. And I think we do that by utilizing rainy day and stimulus money. We do that by targeting agencies for cutbacks and by reducing their services. That’s how we do that.”

Wesselhoft, listed as one of 23 Oklahoma House members who signed the no-tax pledge, said he would make public safety and health his priorities for the next session.

“The number one agency in my mind is public safety,” Wesselhoft said. “The Department of Corrections, the OSBI, all of those agencies that keep the bad guys off the street, those have to be the state’s No. 1 priority.”

Public health, Wesselhoft said, would be his second priority.

“When you cut back on health and on things like treatment for the mentally ill, that’s going to cost you even more,” Wesselhoft said. “Public health has to be second.”

And while Wesselhoft was adamant about his no-tax stance, he said he was more open-minded about eliminating some state tax exemptions.

“There are probably some tax exemptions we should take a look at,” Wesselhoft said. “I think it all needs to be on the table. Whether or not I would agree depends on which one we’re talking about. But I think it’s fair to look at it.”

Officials with Oklahomans for Responsible Government agreed.

“I think that every tax exemption should be reviewed,” Downs said. “I do think that tax exemptions should be reviewed to see if the purpose of the tax exemption is spurring the economy.”

Many of those tax exemptions, Blatt said, don’t make sense in light of the state’s budget gap.

“I think we should be looking at capping tax credits or suspending some tax exemptions,” Blatt said. “During this period of an acute budget crisis, $5.5 billion in tax exemptions doesn’t make sense. It doesn’t make sense to slash direct expenditures and not look at tax expenditures; they, too obviously affect our revenue.”

Still, even with the debate continuing about the state’s budget, legislative leaders – and Henry – appear to be ahead of the curve.

Last month the governor and leaders from both houses of the Legislature said that tax increases were not being considered in light of the state’s budget gap.

“Tax increases were not part of the discussion,” the governor said.

Courtesy of Journal Record