Tax Cuts Create Reasons for HOPE Petition

During the early 1990's, common education received 39% of the state budget. Now common education is funded at 35%. Had the percentage remained at 39%, Oklahoma would not be under-investing in its kids. The HOPE Initiative wouldn't be needed. However, tax cuts have eliminated much of the growth revenue in our state and you can read about the results those cuts have had on Oklahoma's services.

OKLAHOMA'S INCOME TAX CUTS: Revenue Collections Dampened by $400 - $600 Million; Benefits of Top Rate Cut Go Primarily to Wealthiest

Cuts to the individual income tax have decreased state revenues by several hundred million dollars, with most of the benefits going to the highest-income Oklahomans, according to a pair of new fact sheets from Oklahoma Policy Institute.

The first fact sheet calculates that, if not for the tax cuts enacted between 2004 and 2006, the state would have collected $400 million to $600 million more in revenues last year than it actually did. This revenue could have been invested to meet our urgent priorities as a state.

The second fact sheet reveals that when fully phased in, the wealthiest fifth of households will receive 73 percent of the benefit from lowering the top income tax rate, totaling $423 million. By contrast, the bottom 40 percent of households will receive only 3 percent of the benefit from cutting the top rate, totaling $17 million. Tax cuts going to the wealthiest 1 percent of households alone ($169 million) are the rough equivalent of the cost of a $1,500 salary increase for every teacher in the state, a 3 percent cost-of-living adjustment for state employees, and additional staff for our child welfare system and correctional facilities.

Matt Guillory, executive director of Oklahoma Policy Institute, stated that, "During this time of robust economic growth in our state, it is unfortunate that decisions made in recent years have squandered what could have been a real opportunity to create a better educated, healthier and more economically competitive state."

Click here to link to the two fact sheets; or click here to view OK Policy's full press release.

HOPE and Poverty

Investing in our children will make a difference in their lives and Oklahoma's future. Businesses will relocate because our children will be educated and better workers. The investment will provide an overall better economy for all of us.

The investment in kids will help break the stranglehold of poverty for many Oklahomans. Here is the latest from the census bureau and remarks and information from the Oklahoma Policy Institute:

Oklahoma Poverty Profile: 2007

A new fact sheet from Oklahoma Policy Institute offers a series of concise numbers and graphs summarizing some of the major findings from the 2007 American Community Survey on poverty in Oklahoma. Among the key findings:

*Nearly one in six Oklahomans (15.9%) lived in poverty in 2007. This is a 1.1 percentage point decrease from 2006 but well above the poverty rate of 2000 (13.8%). Oklahoma's poverty rate is 2.6% percentage points higher than the national average.

*The poverty rate for children (22.1%) is higher than that of working-age adults (14.5%) or seniors (10.1%).

*A majority (62.8%) of Oklahomans in poverty are White;

*Within Oklahoma, Hispanics (29.0%), African-Americans (27.4%), and Native Americans (23.6%) have the highest rates of poverty.

Click here to read and download the 2-page fact sheet.

Standstill Budget = Cuts?

An issue brief examines the standstill budget and whether or not it will bring about cuts to vital Oklahoma services. Keep in mind the impact the tax cuts had on this budget.

A question to ponder: can it really be a standstill budget when it increases $47M?

The Oklahoma Legislature adjourned last week after having approved appropriations for the upcoming year of $7.089 billion, an increase of just $47 million, or 0.7% compared to the current year.

A new issue brief from Oklahoma Policy Institute examines the main features of the FY '09 budget and reveals that flat funding may lead to cuts in programs and services in the year ahead.

With tax cuts enacted in previous sessions hampering revenue collections, most state agencies received no additional funding to cover rising costs or mandatory employee benefit increases. The brief notes that inflation for the goods and services purchased by state and local government are rising even faster than costs for the economy as a whole. In addition, agencies have been left to absorb costs for employee pension contributions that have increased by $66 million in the past three years and employee health care costs that have more than doubled since FY '03.

While most agencies will do whatever they can to avoid cutting services to the public, in some cases cuts may be unavoidable. As the new fiscal year approaches, close monitoring will be needed to understand what decisions are being taken to manage the budget squeeze, and to track the effects of these decisions on public programs and the clients and communities they serve.

The brief also notes that while Oklahoma has so far dodged the economic downturn plaguing other states, any prolonged or deep economic slowdown is likely to exacerbate the state's current budget challenges and create major shortfalls in the years ahead.

Just click here to read and download the full issue brief or a two-page fact sheet on the FY '09 Budget Basics from the OK Policy website.