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Politics and Government

Legislators, Policy Group Warn Of Potential Consequences Of Tax Case

Oklahoma City attorney and legislative watchdog Jerry Fent, who has successfully challenged laws in the past, comes out of a hearing room at the State Supreme Court, where a referee heard his lawsuit over House Bill 2562.
Joe Wertz
StateImpact Oklahoma
Oklahoma City attorney and legislative watchdog Jerry Fent, who has successfully challenge laws in the past, comes out of a hearing room at the State Supreme Court, where a referee heard his earlier lawsuit over House Bill 2562.

Oklahomans potentially could see a significant tax increase if the Oklahoma Supreme Court sides with the plaintiff in a lawsuit challenging the individual income tax cut measured approved and signed into law earlier this year, a group of Republican legislators and a representative of a conservative public policy group warned Wednesday.

The full court heard oral arguments October 14 in a case brought by Oklahoma City attorney Jerry Fent. Fent alleges that Senate Bill 1246, which lawmakers approved and Gov. Mary Fallin signed earlier this year, violated a number of the provisions of the Oklahoma Constitution’s Article 5, Section 33's provisions, which was amended in 1992 by State Question 640.

Fent argued that in State Question 640, the term "raise revenue" was not limited to legislation that increased taxes, but affected any legislation that increased, lower or adjusted taxes. Fent insists that the legislature's job to fund the costs of government means they "raise revenue" in the broadest interpretation.

During a State Capitol press conference this past Wednesday, State Representative Jonathan Echols, R-Oklahoma City, said “We need to understand the dire consequences that would occur in a change in tax policy that has been held since 1992. If these were to apply to tax cuts – tax cuts signed into law by both Republican and Democratic governors, passed by both Republican and Democratic legislators – they would immediately be subject to constitutional challenge. If we were going to continue and apply the law as written to all tax cuts, we are looking at a massive tax increase on the state of Oklahoma.”

Oklahoma Council of Public Affairs Executive Vice President Jonathan Small said he calculations showed Oklahomans' taxes could increase by more than a $1 billion if the court found sided with Jerry Fent by ruling that held that previous tax cuts that did not meet the requirements of State Question 640 also were unconstitutional.

In an earlier letter, 35 legislators wrote, “It was argued before the Court that, when the citizens voted in 1992 to make it more difficult for the state Legislature to increase their taxes, it was actually the intent of voters to make it more difficult to lower their taxes. Such an interpretation would mean SQ 640 applies to any bill dealing with revenue. This is a direct violation of the plain language of the statute in question and the clear intent of the voters. If a subsequent ruling by the Court reflects such rationale, this will have grave consequences on the ability of the Legislature in the future to provide relief to taxpayers.”


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