Murphey: New taxes are immoral; cut wasteful practices, useless tax credits first

From what I gather, legislative leaders and Gov. Fallin are seeking support for an assortment of fee increases and new taxes to close the budget deficit and give teachers a raise, rather than implement the billions in specific budget saving ideas that OCPA and other groups have recommended for years. It's public choice theory in action: Legislators see it as politically safer to increase the tax burden on everyone (diffuse costs) than to eliminate a vocal group's favorite tax credit or program (concentrated benefits). Conservative Republicans won't cooperate with tax hikes on principle; the tiny Democrat minority won't support the tax hikes because it eliminates a campaign issue for the fall.

State Rep. Jason Murphey, R-Guthrie (may his tribe increase!), writing about one revenue enhancement under consideration, a tax on services, says implementing a new tax is immoral, because it forces Oklahoma families to work longer hours to support the government.

It's an extremely short sighted move. Everyone loses when government creates new taxes and increases the tax burden on the public.

It's not hyperbolic to suggest that the federal, state and local governments, and their many related entries are now taking half of your income through ever increasing direct taxation, overpriced services, fees and regulation, and the many hidden costs which are passed on to you in some form.

This cost is wreaking havoc upon society.

The cost of government has become major facet in the decline of families. It places tremendous financial stressors upon families, forces both parents to work full time jobs and takes their focus away from their children.

Society is paying a terrible price; and, so is the government. The cost of the education system, human services, public safety and corrections will only continue to skyrocket as family values continue to come under pressure and government does even more harm to the ability of Oklahomans to focus on their families.

Though the tax increases might provide more money to government in the short term; the long term cost will haunt society.

When politicians approve new taxation they contribute to this great immorality.

As I have thought through these matters, I have determined to never be a party to this immorality.

Instead of supporting tax increases I have been convicted of the importance of eliminating the practices within government that continue to waste million of dollars every year.

The enactment of the tax increases will only serve to protect this waste and inefficiency.

It would do us all good to look back at tax rates and budget levels of the past and ponder why government is taking an increasing share of our income for lower levels of public service. When I was a kid, the state sales tax rate was 2%, same as it had been since 1936. Gas tax was 6.58 cents / gallon, unchanged since 1949.¹

In 1983, the Democrats then running state government wanted to fix a massive shortfall (due to a downturn in the oil industry) by doubling the state sales tax rate and increasing the gas tax rate by 67%. ² Early the following year, they succeeded in passing a temporary hike in the state sales tax rate, increasing it from 2 to 3 cents on the dollar. ³ That hike was made permanent, and in June 1987, the rate increased again, from 3.25% to 4%. ⁴ In May 1990, the state sales tax rate reached its current level of 4.5%. ⁵ That last hike was part of House Bill 1017, which also included increases in personal and corporate income taxes, and it was supposed to cure our school funding problem for good.

More than nine months after he called a special legislative session to deal with what he called a crisis in Oklahoma education, [Republican Gov. Henry] Bellmon signed into law a sweeping reform bill and $230 million tax package....

"Never again will Oklahoma need to take a back seat in education," Bellmon said to about 300 teachers, lawmakers, parents and students. He called signing the bill "the most pleasurable moment of my political career."

Congratulations and back-slapping preceded and followed the signing, as supporters of the bill celebrated the end of nearly 11 months of battling for reform measures and praised their battle heroes....

Bellmon called the new law a "quantum leap" for Oklahoma education, but said the law itself would not solve the schools' problems without help from educators.

"I challenge our state's educational leaders to use this tool to develop an excellent educational system that will be the envy of our country," he said.⁶

The "incentives for consolidation" were never effective. Prior to passage of HB 1017, Oklahoma had 609 school districts. ⁷ This school year, 26 years later, Oklahoma still has 516 districts, including dependent districts like White Oak in Craig County, Gypsy in Creek County, Greasy in Cherokee County, Fanshawe in Le Flore County, Spavinaw in Mayes County, and Straight in Texas County that serve fewer than 10 students per grade.

No legislator should support a tax increase on ordinary Oklahomans as long as the billionaire owners of a basketball team get tax credits for paying millionaire basketball players.

¹ Young, Jim. "State's sales tax is lowest among those with levies," The Daily Oklahoman, November 24, 1983, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FAD8CAD0A22?p=NewsBank.
² "AN EDITORIAL Enough Is Enough," The Daily Oklahoman, November 28, 1983, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FAE5280DA3A?p=NewsBank.
³ Young, Jim. "New Figures Certified By Equalization Board," The Daily Oklahoman, February 16, 1984, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FCE110D964E?p=NewsBank.
⁴ Legislative Review," The Daily Oklahoman, May 31, 1987, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB42326298DC5FB?p=NewsBank.
⁵ Greiner, John. "Oil Prices Show Up in State Tax Collections," The Daily Oklahoman, October 10, 1990: 17, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB424E01CDBCB1F?p=NewsBank.
⁶ Johnson, Kay. "Bellmon Signs $230 Million Education Bill," Tulsa World, April 26, 1990: A1, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB54647A0D717B7?p=NewsBank.
⁷ STEINERT, GARY. "A major leap for school reform," Tulsa World, November 13, 1990: 7A, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB5469190277837?p=NewsBank.

MORE:

In an earlier entry, Rep. Murphey explained how to go about getting an accurate picture of state finances.

Here is a fact realized by only a few: most state spending never goes through the Legislature's appropriation process. In reality, the Legislature appropriates just forty percent of the $17.5 billion of state spend.

With that in mind, I refer the questioner to the follow resource: Oklahoma Comprehensive Annual Financial Reports, or CAFRs. They provide the most comprehensive resource for understanding all state spending (revenue and debt), because they include the many billions of "non appropriated" state government spend.

Here is a link to the Oklahoma Comprehensive Annual Financial Reports from 1994-2015.