Fallin considers taxing the untaxed

Looking at a budget hole approaching $900 million, Gov. Mary Fallin and her finance officials said Wednesday they likely will ask the Republicandominated Legislature to do something that goes against conservative orthodoxy — approve new taxes.

Top state officials, who have been saying for years that Oklahoma has a spending problem, not a revenue problem, now say the state simply has to take in more money if it is to adequately fund government priorities like public safety, health and education.

Potential revenue-gathering measures include a cigarette tax and a broadened sales tax that will take in things that are now exempt, like car washes, tattoos and pet grooming.

Fallin said Oklahoma has $8 billion in sales tax exemptions.

“We have about 150 different items that we exempt from sales tax, and when you compare the number to other

states like Texas, Kansas, surrounding states, we exempt a lot of things,” she said.

Fallin, Treasurer Ken Miller, Finance Secretary Preston Doerflinger and other members of the Board of Equalization on Wednesday approved an estimate of $6 billion in available revenue for the fiscal year that begins July 1.

There will be about $868 million less to appropriate next session than was appropriated for the current fiscal year, Doerflinger said.

After the board meeting, Miller talked about the need for more recurring revenue, things like taxes and fees, as opposed to so-called “one-time money,” like emergency reserves and agency savings accounts.

“For those who say that we don’t have a revenue problem, I will say this, ‘You don’t have to say it with words because your actions are showing it,’’’ Miller said. “If you have to use a half a billion dollars every single year in your budget to spend more than your recurring revenues will allow, that shows a revenue problem.”

Fallin said the state’s revenue picture has become so bad, there is a chance lawmakers finally will make politically difficult decisions on taxes that they refused to do last legislative session.

“We are basically going into our third year of having a challenging budget and we have a lot of needs,” she said. “There is a point that you reach that you do harm to the services that we provide to our citizens.”

Some cutbacks have the potential of harming the most vulnerable segments of society.

Adequate funding is essential for departments like the Department of Human Services, whose caseworkers help children escape abusive homes, Fallin said. She also pointed to the Oklahoma Highway Patrol, which has instituted a costsavings measure involving limits on trooper mileage.

Fallin wants to bring more revenue to protect such priorities, but that is a hard lift politically in the Oklahoma Legislature, which needs to produce a three-fourths majority to pass expanded taxes.

Revenue measures remain a tough sell for some legislators, like Rep. Bobby Cleveland, R-Slaughterville, who favors trimming some tax credits.

“We’ve got to stop spending money,” he said.