A couple years ago, because I was running for public office, I was asked by a group about my position on the one-cent sales tax for teacher pay raises. The group was made up of pro-state chamber corporate executives who were considering supporting specific candidates for State office. The obvious "correct" answer to the question was "I do not support the increase in sales tax for a teacher pay raise" in order to garner the group's support. I cannot be disingenuous or lie, even for money, so my answer to the question at the time was "The only way teachers will receive a much-needed pay increase is through this one-cent sales tax increase". One of the group then asked "Does that mean you support it?" My answer to this followup question was "Yes, because its the only way teachers will get a raise".
My primary opponent in the state office election in 2016 was asked the same question, as his name was projected on the wall screen alongside my name. I did not hear how he answered the question as I was not privy to his interview, but I suppose it was different than mine. He had answered the same question a month earlier by a "Blanchard citizens group" by responding "I will not be voting for the one-cent sales tax for a teacher pay raise". A few weeks after the OKC State Chamber interview, my primary opponent received several $thousand in financial support from the group, while I received nothing but grief in the form of negative campaign cards and robo-calls to potential voters.
Now, in 2018, there exists another way to provide a much needed Oklahoma teacher pay raise - It's called the "Step-Up OK" plan. As an educator, if anyone asks if I support the plan, my answer will be the same as it was 2 years ago - "Yes, as it's the only way teachers will get a much-needed pay raise". The components of the plan include much needed government reform measures and revenue raising measures and include an increase in the sales tax on cigarettes, little cigars, chewing tobacco, and E-cigarettes; a 6 cents sales tax increase on motor fuels; and an increase in the oil and gas oil production tax from 2% to 4% on existing wells and all future wells will begin at 4% for the first 36 months and move to 7% after. (For more revenue raising measures, please refer to the entire plan).
The proposed tax increases in the plan are regressive in nature (they affect lower and middle income Oklahomans to a greater degree than the wealthy and corporate interests), which explains why many corporate executives and the State Chamber may support the plan. Several of those same corporate executives did not support the former one-cent sales tax for teacher pay raises in 2016, but have now given their blessing to the new tax increase package. These corporate bosses have evidently given permission to their corporate minions in the State Legislature to support the tax increases. Several of these tax increases are very likely to get support from State Legislators who previously supported no tax increases. A Tulsa World article on Jan. 31 reports that the Oklahoma House is expected to vote quickly on the massive tax and reform package, and several corporate House members are expected to support it. It will be interesting to find out which corporate lawmakers who previously voted "no" tax increases, will change their minds and vote "yes" on the Step-Up OK tax increases. We should know something by February 9, and will post the results here..
A comparison of two revenue-raising measures - the One-Cent sales tax increase which was voted down in 2016 and the Step-Up OK plan reveals the following: The one-cent plan would have raised $600 million and provided teachers a $5,000 pay increase, while the Step-Up plan will reportedly raise $750 million and provide teachers a $5,000 pay raise. The one-cent plan would have increased the regressive state sales tax on all consumer products from 4.5% to 5.5%, and the step-up plan will increase regressive taxes on fuel and tobacco products, and increase income tax for the majority of Oklahomans. It will also increase the gross production tax which will be passed on to royalty owners in the form of fees.
An example of the difference in tax increases for the two plans may be hypothetically examined: A first-year teacher earned $31,600 in annual salary for 2017-2018. For the '18-'19 school year, the teacher will earn $5,000 more ($36,600) under both scenarios considered. The take-home monthly pay for both plans will be approximately $2592 per month mol. We determine the teacher spends approximately half of that monthly total on consumer products ($1,300), so will pay an additional $13 per month or $156 per year in additional sales tax. The teacher's take home pay results in a raise of $354 per month - $13 per month in increased sales tax for a net gain of $341 per month. It sounded like a winning combination for teachers, but one-cent plan did not pass, so lets look at the Step-Up plan to see how a teacher would fare...
The same teacher earning $31,600 before the pay raise, and earning $36,600 afterwards would make approximately $2590 per month in take home pay. If the teacher smoked one pack of cigarettes per day, his or her tax increase would amount to about $45 per month. His income tax increase would amount to approximately $4 and motor fuel tax increase - $6. He also bought a new car to replace his aging jalopy, so paid an additional $150 new tax on the auto. There are also many hidden fees amounting to about $10 per month, which corporate lawmakers "slipped in" without their constituents knowing it. The teacher will wind up paying an approximate additional $75 per month in hidden fees and taxes. All middle income Oklahomans could pay approximately $75 more per month in taxes if the Step-Up OK revenue increases are passed. If Oklahomans had passed the one-cent sales tax increase for teacher pay back in 2016, middle income Oklahomans would have paid approximately $13 more per month in taxes.
The question for many corporate minion lawmakers then becomes "Do you support the constituents who elected you to office, because you believe in low regressive taxes and no tax increases for anyone?" or "Do you support the Step-Up OK plan, because your corporate bosses gave you permission and you believe teachers need a pay raise?"..
Educators across Oklahoma are now asking their local lawmakers to support the Step-Up OK plan for balancing the state budget and providing teachers a much needed pay raise, and it may be time for non-educators to ask what their local lawmakers support. As an educator, I'll say it once more: "Since this is the only plan to provide teachers a pay raise, I wholeheartedly support the plan". I would only do one thing to tweak the plan, however, if I were a conservative lawmaker: I would eliminate Tax Increment Financing by municipalities, which would immediately infuse $300,000,000 into public education, and eliminate the need for regressive tax increases. Surely, at least one conservative lawmaker has this idea? Or maybe not...
Let this blog post serve as my question for my local Senator and my local Representative - "Do YOU support Step-Up OK or not?" I know for a fact they read my posts, so I'm looking forward to their answers - stay tuned, and I'll post their answers shortly...
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