Lower State Income Tax Could Arrive Via Taxpayer Protection Act
[The following press release was issued today by the Oklahoma House of Representatives.]
Contact: State Rep. Ken Miller
Capitol: (405) 557-7360
Edmond: (405) 844-0427
OKLAHOMA CITY – A freshman lawmaker hopes his proposal to rein-in state spending and control governmental growth will pave the way for an eventual reduction in Oklahoma’s state income tax.
House Joint Resolution 1020, “The Taxpayer’s Protection Act,” places constitutional limits on state spending and mandates that surplus collections be placed in reserve or rebated to taxpayers. Rep. Ken Miller, R-Edmond, filed the measure as a means to lowering the state’s income tax rate. “Only by constraining spending can we responsibly cut our dependence on the income tax,” he said.
Miller, an economics professor at Oklahoma Christian University, called the state’s reliance on the income tax an economic impediment and said his objective with the Taxpayer Protection Act is to reduce the state’s tax burden on individuals and small businesses. In a recent study published by the Oklahoma Council of Public Affairs and the Americans for Prosperity Foundation, Dr. Barry W. Poulson, an economics professor at the University of Colorado, observed that “the major fiscal problems in Oklahoma can be traced to this fatal flaw of high and progressive individual income taxes.”
HJR 1020 would alter how the state determines the amount of money available to the Legislature for appropriation each year by establishing an annual spending limit based on the sum of the inflation rate and population growth.
Miller said the expenditure limitation provision would keep government growth in line with the state's true needs, forcing efficiency and responsibility in spending. “Ultimately, this measure can lead to a significant reduction in the income tax and provide incentives to individuals and small businesses to grow our economy,” he said.
Another key provision of HJR 1020 creates a budget stabilization fund to help stabilize the budget during economic downturns, and strengthens the constitutional emergency fund or "rainy day fund.”
Miller said creation of a budget stabilization account will allow the state to better prepare for budget shortfalls. The fund could be tapped only if revenue received by the state were less than the total appropriated by the Legislature for the same fiscal year.
Additionally, funds from the constitutional emergency fund could be appropriated only after the Governor has determined an emergency condition exists and the appropriation is approved by a two-thirds majority in both houses of the Legislature.
HJR 1020 defines an emergency as “an extraordinary event or occurrence that could not have been reasonably foreseen or prevented and that requires immediate expenditures to preserve the health, safety, and general welfare of the people.” A revenue or budget shortfall does not constitute an emergency, the resolution stipulates.
“By defining an emergency, we will make these funds available only for true emergencies,” Miller said. When both reserve funds are fully funded, surplus collections will be refunded to taxpayers.
According to Dr. Poulson, who is one of the nation’s leading experts on taxpayer-protection legislation, over the last 15 years Oklahoma revenue growth has outpaced the growth in population and inflation. If Oklahoma would have had a Taxpayer Protection Act in place, including a budget stabilization fund and an emergency fund, it would have stabilized the budget over the long term while providing $581 million in tax relief to Oklahoma families.
The “Taxpayer’s Protection Act” is modeled philosophically after Colorado’s Taxpayer Bill of Rights, or TABOR, considered the most stringent tax and spending limitation in the country. Miller said while Colorado’s TABOR has been largely successful since voters approved implementation in 1992, the recent recession identified some pitfalls in the plan which have led some to criticism of any TABOR-like initiatives.
“The concept of restraining government spending is a good one,” Miller said. “We shouldn’t abandon the entire concept just because the mechanics of one specific plan weren’t perfect. We have the benefit of evaluating problems experienced in Colorado and making the necessary corrections.”
One correction Miller identified includes freezing spending limits during economic downturns so that once the state’s economy recovers the state can immediately rebound to pre-recession spending levels. “Oklahoma can become a fiscal model for the nation by taking this bold concept and perfecting it.”
Miller said he expects significant opposition from “big spenders and special interest groups who detest the idea of any restraint on government spending.” He noted that the Oklahoma Public Employees Association and Tulsa County’s Community Action Project attacked the resolution before he had even filed the measure.
“The bottom line is, who do you trust to stop excessive government spending: politicians who have a proven appetite for spending, or those who worked hard to earn the money?” Miller said.
“If you believe that government takes enough of your hard-earned money, if you believe that we need to reduce the income tax in order to grow investments and jobs in our state, and if you trust Oklahoma voters to control spending more than you trust politicians, then I ask you to join the effort to send Taxpayer’s Protection Act to a vote of the people.”
Contact: State Rep. Ken Miller
Capitol: (405) 557-7360
Edmond: (405) 844-0427
OKLAHOMA CITY – A freshman lawmaker hopes his proposal to rein-in state spending and control governmental growth will pave the way for an eventual reduction in Oklahoma’s state income tax.
House Joint Resolution 1020, “The Taxpayer’s Protection Act,” places constitutional limits on state spending and mandates that surplus collections be placed in reserve or rebated to taxpayers. Rep. Ken Miller, R-Edmond, filed the measure as a means to lowering the state’s income tax rate. “Only by constraining spending can we responsibly cut our dependence on the income tax,” he said.
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| State Rep. Ken Miller (far right) and others discuss a new OCPA study. |
Miller, an economics professor at Oklahoma Christian University, called the state’s reliance on the income tax an economic impediment and said his objective with the Taxpayer Protection Act is to reduce the state’s tax burden on individuals and small businesses. In a recent study published by the Oklahoma Council of Public Affairs and the Americans for Prosperity Foundation, Dr. Barry W. Poulson, an economics professor at the University of Colorado, observed that “the major fiscal problems in Oklahoma can be traced to this fatal flaw of high and progressive individual income taxes.”
HJR 1020 would alter how the state determines the amount of money available to the Legislature for appropriation each year by establishing an annual spending limit based on the sum of the inflation rate and population growth.
Miller said the expenditure limitation provision would keep government growth in line with the state's true needs, forcing efficiency and responsibility in spending. “Ultimately, this measure can lead to a significant reduction in the income tax and provide incentives to individuals and small businesses to grow our economy,” he said.
Another key provision of HJR 1020 creates a budget stabilization fund to help stabilize the budget during economic downturns, and strengthens the constitutional emergency fund or "rainy day fund.”
Miller said creation of a budget stabilization account will allow the state to better prepare for budget shortfalls. The fund could be tapped only if revenue received by the state were less than the total appropriated by the Legislature for the same fiscal year.
Additionally, funds from the constitutional emergency fund could be appropriated only after the Governor has determined an emergency condition exists and the appropriation is approved by a two-thirds majority in both houses of the Legislature.
HJR 1020 defines an emergency as “an extraordinary event or occurrence that could not have been reasonably foreseen or prevented and that requires immediate expenditures to preserve the health, safety, and general welfare of the people.” A revenue or budget shortfall does not constitute an emergency, the resolution stipulates.
“By defining an emergency, we will make these funds available only for true emergencies,” Miller said. When both reserve funds are fully funded, surplus collections will be refunded to taxpayers.
According to Dr. Poulson, who is one of the nation’s leading experts on taxpayer-protection legislation, over the last 15 years Oklahoma revenue growth has outpaced the growth in population and inflation. If Oklahoma would have had a Taxpayer Protection Act in place, including a budget stabilization fund and an emergency fund, it would have stabilized the budget over the long term while providing $581 million in tax relief to Oklahoma families.
The “Taxpayer’s Protection Act” is modeled philosophically after Colorado’s Taxpayer Bill of Rights, or TABOR, considered the most stringent tax and spending limitation in the country. Miller said while Colorado’s TABOR has been largely successful since voters approved implementation in 1992, the recent recession identified some pitfalls in the plan which have led some to criticism of any TABOR-like initiatives.
“The concept of restraining government spending is a good one,” Miller said. “We shouldn’t abandon the entire concept just because the mechanics of one specific plan weren’t perfect. We have the benefit of evaluating problems experienced in Colorado and making the necessary corrections.”
One correction Miller identified includes freezing spending limits during economic downturns so that once the state’s economy recovers the state can immediately rebound to pre-recession spending levels. “Oklahoma can become a fiscal model for the nation by taking this bold concept and perfecting it.”
Miller said he expects significant opposition from “big spenders and special interest groups who detest the idea of any restraint on government spending.” He noted that the Oklahoma Public Employees Association and Tulsa County’s Community Action Project attacked the resolution before he had even filed the measure.
“The bottom line is, who do you trust to stop excessive government spending: politicians who have a proven appetite for spending, or those who worked hard to earn the money?” Miller said.
“If you believe that government takes enough of your hard-earned money, if you believe that we need to reduce the income tax in order to grow investments and jobs in our state, and if you trust Oklahoma voters to control spending more than you trust politicians, then I ask you to join the effort to send Taxpayer’s Protection Act to a vote of the people.”
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