A key element of Governor Kevin Stitt's call for a special session is going before the Oklahoma Supreme Court and the decision could have a dramatic impact on taxes.
TRANSCRIPT
Dick Pryor: This is Capitol Insider - taking you Inside politics, policy and government in Oklahoma. I'm Dick Pryor with Quorum Call publisher Shawn Ashley. Shawn, the Oklahoma Tax Commission will soon consider rules to implement the school choice tax credit the legislature passed and governor signed earlier this year. The comment period for new rules to implement the credit just ended. But already some legislators have expressed skepticism about how the Tax Commission will administer the law. One legislator has publicly stated this is more a voucher than a tax credit. Is that what concerns lawmakers?
Shawn Ashley: That is one of the main concerns. House Bill 1934, of course, created two school choice tax credits - one for home schoolers and one for private schools. Home schoolers will apply for their credits on their individual income tax returns, just like people in businesses do for almost every other tax credit. All the private school tax credits will be paid to qualified applicant schools so taxpayers will not claim them on their tax returns. In fact, the rules forbid those who receive the private school tax credit from doing so. Representative Cody Maynard, a Durant Republican, said last Monday House Bill 1934 was intended to create a tax credit and not a voucher system in Oklahoma, yet the drafted rules have many voucher-like qualities. Senate Education Committee Chair Adam Pugh noted that setup means parents will have to pay income tax on the so-called tax credit for private school students. And Senate Appropriations Chair Roger Thompson was blunt in his assessment of the Tax Commission's proposed rules. “I don't think that represents the will of the legislature,” he said. Senate President Pro Tem Greg Treat carried the bill and was involved in the negotiations that produced it. His spokesman said, “the Pro Tem has acknowledged there may need to be a legislative fix concerning some of the rules surrounding the school choice tax credit.”
Dick Pryor: The Oklahoma Supreme Court has set January 17th as the date for oral arguments in Stroble v. Oklahoma Tax Commission, the case that inspired one of the reasons Governor Stitt called for a special session this fall. What is the significance of that case, the Stroble case?
Shawn Ashley: Well, in simplest terms, it will determine whether Native Americans who work for tribal businesses and live in one of the seven reservations recognized by Oklahoma courts will have to pay income tax. An administrative law judge at the Oklahoma Tax Commission said they do not have to pay income tax because they meet the qualifications under statute and administrative rules for an exemption. The tax commission overruled that decision leading to the Supreme Court case. In public policy terms, this goes back to the U.S. Supreme Court's 2020 McGirt decision. The question is whether that and subsequent rulings apply to civil law, like tax law and criminal law. And in political terms, it seems to be at the forefront of Governor Stitt's mind. He said on the final day of this year's legislative session, “the Stroble case is something everyone should be aware of,” and then he included it in his special session call.
Dick Pryor: Some legislative leaders are going to be getting a pay raise next year, while most legislators will not. The Legislative Compensation Board makes those decisions about pay. How does that board work?
Shawn Ashley: The board is established in the Oklahoma Constitution and is made up of nine members, five appointed by the governor and two each appointed by the House Speaker and the Senate President Pro Tem. It meets every two years in odd numbered years to set the pay for legislators and any changes it approves do not take effect until after the next general election next November.
Dick Pryor: What was the board's rationale for not increasing legislative pay for most members?
Shawn Ashley: There seem to be two things at play. First, the members themselves felt that the $47,500 annual base salary for lawmakers was sufficient, particularly compared to other salaries in the state. Second, a couple of members said they had spoken with lawmakers who told them they were happy with their salaries and did not want or need a raise. Lawmaker base pay was last increased in 2019. That came after the board voted in 2017 to reduce their pay because of that year’s special session when lawmakers were trying to find a way to increase revenue to pay additional appropriations for education, teacher pay raises, and state employee pay raises.
Dick Pryor: Thank you, Shawn.
Shawn Ashley: You're very welcome.
Dick Pryor: That's Capitol Insider. For more information, go to quorumcall.online. You can find audio and transcripts at kgou.org and look for Capitol Insider where you get podcasts. Until next time, with Shawn Ashley, I'm Dick Pryor.
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