The Enid News and Eagle, Enid, OK

State, national, world

December 17, 2013

Okla. Supreme Court shoots down income tax cut

OKLAHOMA CITY — A sweeping agreement among Republican leaders to slash the state’s personal income tax rate and provide $120 million for repairs to the Capitol is unconstitutional because the bill passed by the Legislature contains more than one subject, the Oklahoma Supreme Court ruled Tuesday.

In a unanimous decision, the court said the legislation violated the Oklahoma Constitution’s ban on logrolling, or including multiple subjects in one bill.

“Taxation policy and the appropriation of state funds for Capitol improvements are not germane, relative or cognate to a readily apparent common theme and purpose,” Justice James Winchester wrote in the opinion. “A voter could certainly be for one measure and not the other but forced to approve the entire bill in order to pass the desired legislation.

“The single subject rule prohibits this unpalatable choice.”

The bill, which represented a major political victory for Gov. Mary Fallin, would have cut the state’s top personal income tax rate from 5.25 percent to 5 percent, beginning in January 2015, with a second cut to 4.85 percent set for 2016 if state revenues rose to certain levels. It also would have diverted $120 million in income tax collections over two years to fund an overhaul of the nearly 100-year-old Capitol, including upgrades to the electrical and plumbing systems.

But the bill, which was passed earlier this year, was challenged by Jerry Fent, a retired Oklahoma City attorney with a long track record of successfully challenging legislative actions. Attorneys for the state had argued the measure was constitutional because it dealt entirely with managing taxes.

Fallin, Senate President Pro Tem Brian Bingman and House Speaker T.W. Shannon all issued statements Tuesday expressing disappointment with the court’s ruling and vowing to address the issue in the 2014 session.

“Today’s ruling was a huge blow to Oklahoma families who have been expecting tax relief, and I’m deeply disappointed the Supreme Court has once again ruled against the interests of those families,” Shannon, R-Lawton, said in a statement. “I am prepared to act quickly with legislative leaders and the governor to restore what the Supreme Court has undone.”

The savings on the average Oklahoma tax return would be about $82 if the rate dropped to 5 percent, according to the Oklahoma Tax Commission.

Although Republicans enjoy a 72-29 advantage in the House and a 32-16 edge in the Senate, it’s not clear if both a tax cut and the Capitol renovation project could pass separately.

Shannon and members of the increasingly conservative House GOP caucus have opposed the idea of a bond issue to pay for Capitol improvements, which prompted the need to divert $60 million in the current fiscal year and an additional $60 million next year to pay for the project.

Rep. Mike Reynolds, R-Oklahoma City, is among some Republicans who were critical of the proposal and warned it was unconstitutional.

“It would have been very easy to pass the tax-cut bill without the leadership’s pet project of Capitol improvements,” Reynolds said.

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