Lawmaker: Okla. GOP abandoning tax relief goals

AP News
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Posted: Dec 07, 2009 11:36 AM

Is Oklahoma's deepening budget shortfall forcing Republican state lawmakers to abandon their core goal of tax relief?

That's what one Republican member of the Oklahoma House suggests in a confidential memorandum to GOP House members that seeks support for a plan to freeze property taxes for seniors and reduce annual property tax increases for other homeowners.

According to the memo, Rep. Dave Dank, R-Oklahoma City, takes issue with Republican colleagues who opposed the plan at a GOP caucus retreat in Claremore last month.

The memo, obtained by The Associated Press, says a majority of the House's majority caucus voted against placing the plan on a list of GOP legislative goals for 2010. It also criticizes Republican House Speaker Chris Benge for referring to the property tax proposals as "tax cuts" during discussion of the plan at the caucus meeting.

"Calling them tax cuts is like referring to (Democratic President) Barack Obama as a great leader. It simply misstates the truth," writes Dank, who refers to the property tax plan as "tax restraints."

"Restraint is what we are all about _ the restrained and reasonable growth of government revenues, in keeping with our core Republican principles," Dank says. "The taxpayers sent us here to make the changes necessary to get our state out of the sinkhole created by all those years of Democrat rule.

"Simply put, the taxpayers of Oklahoma are the one special interest we should be serving...not county officials or teachers' unions."

Benge, former chairman of the House Appropriations and Budget Committee who has supported tax cut proposals in the past, told The Associated Press Friday that rejection of Dank's property tax plan does not mean Republicans are abandoning tax relief for Oklahomans.

But, Benge said, it does mean Republicans, who have controlled the House since 2004 and took control of the Senate for the first time last year, understand the depth of Oklahoma's revenue decline.

"I think that this year is a difficult year to really do anything significant," said Benge, of Tulsa. "We want to pursue tax relief but we're not going to do so in a haphazard way."

In recent weeks, state agencies have announced layoffs and furloughs of workers and reduction or elimination of services to taxpayers to cope with budget cuts ordered by state officials.

State financial officials have said a budget shortfall, largely due to low natural gas and oil prices and a downturn in the economy, may total $1 billion _ about 14 percent of the state's $7 billion budget _ by the fiscal year end of June 30.

Benge said lawmakers must balance tax relief with the need to raise enough money to pay for basic needs like public education, roads and bridges, health care, public safety and senior nutrition.

"We have to seek that balance," he said. "I think it's a tough climate right now for us to be looking at any significant tax relief."

Republican lawmakers have consistently supported lower taxes, Benge said. Tax cuts scheduled to take effect next year include the final phase of repealing the state estate tax, which disappears in 2010, as well as another increase in the standard deduction for Oklahomans who do not itemize their income taxes.

In recent years Republicans pushed for the largest tax cut in history, a reduction in the state income tax from a top rate of 6.65 percent to 5.5 percent. Another cut in the top income tax rate, to 5.25 percent, will take effect once revenue is projected to grow by more than 4 percent over the previous year.

"Anybody that would question the caucus' commitment to tax relief, that's ludicrous," Benge said. "I think our record is irrefutable. Tax relief is very much a commitment of the House Republican caucus. We've proved that."

Still, Dank believes his caucus is not doing enough to help seniors and others who struggle to afford annual property tax increases of up to 5 percent.

"I am totally disenfranchised and disappointed with my leadership," Dank said. "They are hammering my people out there for 5 percent a year. I think it's the people's time."

Dank's proposals call for a vote of the people on a lifetime freeze in property taxes for seniors over 65 for as long as they own their home and a 3 percent annual cap on tax increases for everyone else.

Stuart Jolly, state director of Americans for Prosperity, a national organization that supports cutting taxes and government spending, said he supports Dank's plan and agrees that Republican state lawmakers are setting aside their tax relief agenda.

"At least in the short term they are," Jolly said. "I think we should try to keep citizens in Oklahoma. And one of the things that keeps people out of Oklahoma is higher taxes. We should not penalize citizens for just living in this state."

Others said it makes no sense to consider the tax proposal during a time of declining revenue.

"Budget shortfalls and the kind of cuts that are being implemented are serving as a hard dose of reality," said David Blatt of the Oklahoma Policy Institute, which supports policies that lessen poverty and promote fiscal responsibility.

"I think it's encouraging that Republicans say this is not the priority for right now. We have to decide how to limit the bleeding," Blatt said.

House Democratic Leader Danny Morgan of Prague said lawmakers need to be "very careful" when considering whether to support Dank's property tax plan.

"I'd rather protect our seniors by giving them a warm meal and a place to come in out of the cold where they can fellowship with others," Morgan said.

Morgan also took exception with suggestions in Dank's memo that Democrats are to blame for the state's dilemma.

"I guess Rep. Dank has been out in the cold too long," Morgan said. "If he thinks Democrats got us in this position, then he hasn't seen who is in control of the House."