SALES TAX IS A BAD IDEA!
by Steve Fair
In November, Oklahoma voters could vote on a proposal to impose a statewide one cent sales tax for common education. Proponents, including OU President David Boren, say the tax would generate over $600 million annually that could be used to increase teacher pay and improve education in the Sooner state. Oklahoma Council of Public Affairs, a conservative think tank, challenged the legality of the initiative petition saying it violated the ‘single subject’ provision in the state constitution. After the 6-3 decision was handed down on Tuesday clearing the way for signature collection, Amber England, with Stand for Children Oklahoma said, “We are delighted that the State Supreme Court ruled in favor of sending the initiative petition forward. Oklahomans deserve the opportunity to solve the state’s education funding crisis by voting to pass this plan. We will begin immediately with the signature collection process and already have the staff and resources in place to get this measure on the ballot.” President Boren said, “The court decision today is a great victory for the schoolchildren and the people of Oklahoma.” OCPA said they plan to work in the coming months to prevent passage of the proposal.
Stand for Children Oklahoma has to collect 123,000 signatures in the next 90 days to get Initiative Petition #403 on the November 2016 ballot. There are 42,000 plus public school teachers in Oklahoma who each would get a $5,000 annual bump in salary should it pass, so that shouldn’t be a big hurdle. There are several reasons why this proposal is a bad idea.
First, Oklahomans already pay enough sales tax. According to taxfoundation.org, Oklahoma ranks #5 in the country in combined sales taxes (local & state) at an 8.66% rate. If this proposal were approved, Oklahoma would have the highest sales tax rate in the nation at 9.66%. Increasing the sales tax rate would hurt Oklahoma retailers near the state borders. Consumers would drive across state lines to buy groceries, drugs and big ticket items in order to save 1%, hurting businesses and costing jobs in the state. Consumers have a choice where they spend their money and in a tight economy, they will drive to save a buck. They don’t have to just pay the toll like some politicos mistakenly believe- they will find a backroad.
Second, there is no guarantee earmarking the one cent to education will improve education. Oklahoma has thrown more and more money at education through the years and yet education test scores haven’t improved. The answer to improving education is always more taxes or some scheme; remember pari-mutuel betting for horse racing? How about liquor by the drink? The statewide lottery? The campaigns to get those issues passed all were couched with the same tagline: ‘Do it for the Children.’ All or a portion of the monies from every one were going to solve the funding issues for education, but they never did. According to statebudgetsolutions.org report, there is no direct correlation between increased funding and improved performance in public education, but that doesn’t stop them from asking for more money.
Third, this same sales tax scheme didn’t work in Arkansas. In 1983, then Arkansas Governor Bill Clinton pushed for educational change, calling for teacher competency testing, some school consolidation and a one cent increase in state sales tax to be earmarked for education. The General Assembly approved it, but according to Greg Kaza, an economist with Arkansas Policy Foundation, not much has changed in Arkansas since it passed. Education test scores have remained about the same. There hasn’t been the huge influx of jobs that were promised during the promotion of the tax.
In fact, the sales tax hurt grocery retailers so much that Clinton and the legislature removed most of the sales tax burden on food and drugs. The point person for increasing the sales tax was Hillary Clinton. Jonathan Leaf with the Weekly Standard said Hillary was the key to the passage of the failed idea; “Hillary’s role was central. She helped develop the plan and her personal intervention and testimony before the assembly committee that held the bill up is what pushed it through. She campaigned in each of the state’s 75 counties to drum up support for the bill. Later Hillary’s intense personal lobbying would guide the bill through the legislature’s main session, where it passed by one vote.”
Oklahoma can ill afford to increase our sales tax rate to the highest in the country.
Education needs to start thinking outside the box and come up with some ideas to improve their performance that don’t involve increasing our taxes.
Steve Fair is National Committeeman for the Oklahoma Republican Party. He can be reached by phone at 580.252.6284 or by email at email@example.com. His blog is stevefair.blogspot.com.