Taxes

Will the 57th Oklahoma Legislature Effect Change

Will the 57th Oklahoma Legislature Effect Change - November 18, 2018

State Representative David Perryman

          Oklahoma convenes a new legislature every two years. 2019 will mark the opening of the 57th legislature. When the dust settled after the November 6, 2018, elections, not much changed.

Of the 101 members of the Oklahoma House of Representatives, 76 will be Republicans and 25 will be Democrats. Currently, there are no Independents or third party members in the House.

At the end of last session, there were 73 Republicans and 28 Democrats in the House. The percentages that are most interesting relate to emergency enactments and rules suspensions. Both of those procedures require 68 votes. What that means is that in the last legislature there were enough Republicans to pass any law that they want and to adopt an emergency effective date that they want and to suspend any legislative rule that they want.

This session, with the addition of three more Republican legislators, their power is expanded.

Because of State Question 640, adopted in 1992, no revenue bill could become law without the votes of at least 75% of the members of both the House and the Senate. Therefore, the only thing that the Republicans could not do last session was increase taxes without at least three Democrats joining in the effort.

State Question 640 became a real issue last session when the oil and gas industry and its cohorts tried to ram the StepUp Plan down the throats of the legislature. StepUp was an attempt to cap the Gross Production Tax at only 4% and throw a bone at enough teachers to take the pressure off the industry and ignore the fact that public education had received 28% in cuts over the past decade. When the Democratic caucus refused to let the oil and gas industry continue to name its own tax rate, and held out until the GPT was raised to 5% so that public education, including textbooks, teachers and support personnel would take a step toward adequate funding, the effect of State Question 640 made the Republicans work across the aisle.

With a 76 member supermajority in the Oklahoma House of Representatives, that will no longer be the case.

The situation in the State Senate is very similar. At the close of the last session, there were 8 Democrats in that 48 member body. This year, 9 Democrats will be seated in the Senate. The fact that the number of Republicans in the State Senate went from 40 to 39 will have little effect since that chamber’s 75% Republican supermajority is not in jeopardy.

Legislators will begin pre-filing legislation over the next few weeks. When the final language of the bills is filed in mid-January, the Speaker of the House will sort the Bills out among Committees. Each Committee will have a Republican Chairman and a Republican Vice-Chairman who will determine which Bills will be heard and which will not receive a hearing.

What is clear is that the people of the State of Oklahoma have spoken. Our state has a Republican governor and every statewide office holder is a Republican and both houses in the legislature are held by a Republican supermajority. The most urgent questions surround whether the legislative agenda of the 57th Legislature will be a repeat of the four prior legislatures under Governor Fallin and whether Oklahomans will notice.

Questions or comments, contact David Perryman at 405-557-7401 or David.Perryman@okhouse.gov.

Don't Mess With Texas

Don’t Mess With Texas - August 19, 2018

State Representative David Perryman

This is the time of year that we hear about how Oklahoma needs to be more like Texas. Normally, the discussion begins with someone remarking how groceries aren’t taxed in Texas or if it is true that Texas has no income tax. Usually someone in the room who has just returned from a trip to Texas mentions how much better their roads are than ours.

Inevitably, Oklahoma comes out on the short end of the stick and some legislator files a Bill to eliminate Oklahoma’s income tax or the tax on groceries and to audit some state agency to root out the “horrendous” waste of taxpayer money.

It is not my intent to vilify Texas or any other state that may have better roads or higher paid teachers or state services that appear to function more effectively. But it is important to note some basic facts. In 2018, Oklahomans will pay less in state and local taxes than any state except Alaska and Louisiana.

So how is it possible for Oklahomans to pay so little in taxes and for so many Oklahomans to believe that they are comparatively overtaxed? The answer is not too complicated, but does require a little digging.

First is the fact that the effective Gross Production Tax and Ad Valorem taxes paid by the Oil and Gas Industry in Texas remains more than 65% higher than Oklahoma’s new GPT rate of 5% adopted earlier this year.

Likewise, Gasoline and Diesel Fuel Taxes in Texas remains more than 5% higher than Oklahoma’s new Gasoline and Diesel Tax Rate of 19 cents per gallon.

While many people believe that Texans pay no sales tax, the truth is that the average Texan pays $1,495 per year in Local and State Sales Taxes which is nearly 23% more than the Local and State Sales Tax paid by the average Oklahoman.

Oklahoma does assess an income tax of up to 5% on taxable income over $7,200 as compared to a Texas income tax of zero. However, the Texas tax code contains a hidden transaction tax that generates billions of dollars of revenue for the Lone Star State. It is called a Margin Tax and actually taxes, in pyramid fashion, revenue on goods and services at multiple points as those goods and services wind through the manufacturing, production, wholesale and retail marketplaces.

Perhaps the greatest inequity between Oklahoma and Texas is in the form of state and local property taxes. The per capita amount of property tax paid in Oklahoman is $678 and is $1,731 in Texas.  Put another way, the average Texan’s property tax bill is more than 155% higher than the average Oklahoman.

Another measure of tax burden is the debt load placed on citizens by state and local government. According to the 2018 Tax Foundation report, where all of these numbers may be located, the debt load placed on each and every Texan for state and local debt is $10,108, while the state and local tax burden in Oklahoma is less than half that at $4,836 per capita.

That same publication shows pretty clearly why our roads and our schools are substandard and why state and local agencies are not able to deliver adequate services to our citizens, why prisons are overcrowded, why hospitals and nursing homes are closing, why there are 7,657 developmentally disabled citizens on the waiver request waiting list for services. In a nutshell, Per Capita State and Local Tax Collections in Texas in 2015 were $4,120, which was over 11% higher than the Per Capita State and Local Tax Collections in Oklahoma that same year.

We don’t want to be Texas, but most Oklahomans need to know why our tire repair bills are so high and why we are incarcerating such a high number of emotionally disturbed citizens rather than properly funding services in the Sooner State.

Questions or comments, call or write David Perryman at David.Perryman@okhouse.gov or 405-557-7401.

The Fatted Calf

The Fatted Calf - January 28, 2018

State Representative David Perryman

 In 1978, a Texas doctor named Ron Thomas, opened a restaurant that he named “The Fatted Calf.” The restaurant was somewhat unique in that the menus had no prices. Thomas’ idea was that each customer would pay according their own conscience and ability, as little or as much as they deemed fair and appropriate.

Under ideal circumstances, people of more limited means would pay what they could, even if their payment was less than the cost of the meal. Likewise, customers who were able would ideally pay a bit extra so that in the long run, everything would even out and the owner would gross enough in receipts to cover food costs, employee pay, overhead and maybe make a little profit.

Dr. Thomas’ Sanger, Texas, “experiment” reflected the result that many other establishments using this “business model” find. Most report that on average they receive about 85% of what is needed to stay open and do not succeed without substantial financial subsidies.

Without delving off into a dissertation on the psychology of customers or their economic habits, the owner of The Fatted Calf confirmed that it is imperative to recognize the actual cost of delivering a quality meal before establishing retail prices. Otherwise, it is possible that revenue will not cover expenses.

With full realization that a free enterprise business model does not directly translate into the delivery of government services, there are basic elements that alike and some that are very different.

Both have costs that are related to the number of “customers” that they must serve. However, a restaurant has the ability to limit the number of meals that it will serve. If business is good, a baker may purchase additional flour and more ovens in anticipation of receiving more revenue and hence a larger profit.

Unfortunately, public schools do not have the ability to turn away “customers” and despite the fact that there were 645,000 students in 2008 and 695,000 a decade later, the 8% increase has not equated to an 8% increase in funding. Instead, per student funding of Oklahoma’s K-12 education formula is down by 22.8 percent since 2008. The percentage cut in Oklahoma is the largest of any state. According to the Oklahoma Policy Institute, it works out to a decrease of $810 per student, adjusted for inflation.

Also woefully underfunded is the Oklahoma Department of Corrections which is currently at 109% of capacity and clipping along incarcerating women at the highest rate in the country and in third place with men, needing $1.6 Billion to pay its bills. These are but two examples of a lack of government revenue. Mental health care and a myriad of other core government services must also be funded.

When I was first elected to the House of Representatives, Zero Based Budgeting was all the rage. Legislators and the lobbyists whose money elected them went on and on about how each agencies budget should be stripped down to zero and built back each year so that we would REALLY know the cost of government services. After one or two agencies were reviewed, it became very apparent that building a budget based on need was not the cost saver that it claimed to be.

As it became undeniable that Oklahoma had a revenue problem, the oil and gas industry “stepped up” to “offer” a generous 4% gross production tax to “solve” the problem. In truth, they realized that Oklahomans had become aware of 10 years of tax cuts, tax breaks and incentives that had cost the state over a billion dollars per year. Fearing public outcry for a restoration to the historical 7% GPT Rate the industry is attempting to “name its own tax rate.”

As citizens, we dutifully pay our taxes and want those taxes to be used for services to the citizens of Oklahoma. None of us necessarily like taxes, but there is a fundamental  unfairness that a single industry and its shareholders deem themselves worthy to “set their own rate” simply because they exercise greater political clout than working Oklahomans.

The Fatted Calf failed because it gave away its revenue. Oklahoma, too, will fail if it continues to allow billion dollar industries to drain the state’s coffers to the detriment of working Oklahomans and our children.

Thanks for allowing me to serve. If you have any questions or comments, please call or write, 405-557-7401 or David.Perryman@okhouse.gov

Keeping Up With The Texans

Keeping Up With The Texans - September 24, 2017

State Representative David Perryman

News of this week’s Special Legislative Session has bumped up the number of calls and emails that I receive from constituents regarding their thoughts on Oklahoma’s impending revenue failure. As always, I encourage that input as it is important to me for my understanding and it is important for me to have real life examples to use as I attempt to persuade politicians whose lives exist in the bubble of the State Capitol and don’t understand how votes on bills can detrimentally impact hundreds of thousands of Oklahomans, young and old.

While the official reason that a Special Session has been called is to “replace the $215 Million” hole that will result from the cigarette fee being held unconstitutional, the real impact is nearly half a Billion Dollars when the loss of federal matching dollars is considered. However, even that $500 Million hole does not address the hundreds of millions of dollars that have been diverted from roads, bridges, mental health, education or a number of other core services that have been crippled by unwise legislative decisions over the past 10 years.

As we look at revenue options, there are two groups who continually push back. There is the group that claims that the state’s budget could be balanced by diverting $102.7 Million in county road funds, eliminating all funding to OETA, pulling $23 Million from the Rainy Day Fund, using $83 Million in “anticipated surplus cash.” The other group simply wants to pass the cigarette tax.

Neither group wants to address the ongoing cuts that undermine Oklahoma’s educational system, our mental health care, roads and bridges and the myriad of other state services that have been eliminated or reduced to a level of impotence.

Both groups however tout the wisdom of the tax policy of the state of Texas and covet the services that the Lone Star State provides to its citizens. Repeatedly, they point out that Texas has no income tax and erroneously state that it does not impose a sales tax.

The phenomenon of unwise fiscal decisions based on covetousness has many names. 19th Century economist Thorstein Veblin called it “Conspicuous Consumption.” An early 20th Century comic strip called it “Keeping up with the Joneses.”

In Oklahoma it would be correct to call it “Keeping up with the Texans” and it is alive and well at the Capitol as those who hold a supermajority in both houses of the Oklahoma legislature have been on a decade long pursuit to eliminate Oklahoma’s income taxes while pandering to the dictates of the oil and gas industry in the slashing of Oklahoma’s oil and gas production tax.

What they don’t acknowledge is that the “nice things” in Texas cost money and that the tax burden on Texans is higher than the tax burden on Oklahomans. In fact, Oklahoma’s Tax Freedom Day is a full six days earlier than our Texas cousins’. Only seven states tax its citizens less than Oklahoma (4 of those 7 are in the Deep South and have schools are only marginally better funded than Oklahoma’s).

It is no surprise that a state can have better roads and bridges and pay their teachers 20 to 30% higher wages when its tax structure produces revenues to fund those services. For instance, according to the State Business Tax Climate Index of the non-profit Tax Foundation, the Corporate Tax in Texas was 2nd HIGHEST in the country while Oklahoma’s was 9th LOWEST. Oklahoma ranked lowest in the nation in the Unemployment Insurance Tax while Texas was 11 spaces behind.

According to the Tax Foundation Texas’ Property Tax was 13th highest in the nation while Oklahoma’s was 12th LOWEST. That often equates to an annual tax bill that is two to three times higher than an equivalent property in Oklahoma and clarifies why more than 40% of Texas’ local and state taxes are derived from Property Tax while Oklahoma’s Property Tax structure results in only 17.5% of its total local and state revenues.

It is interesting to note that while Texas does not tax groceries, the state sales tax rate is 6.25% and applies to hundreds of goods and services that are not taxed in Oklahoma at Oklahoma’s state rate of 4.5%. The result is that in Texas approximately 36% of all state and local collections come from Sales Taxes while Oklahoma receives 33.3% of its state and local collections from that source.

Another area that Oklahoma has the LOWEST tax rate of any energy producing state in the country is the Gross Production Tax on Oil and Gas. In 2014, GPT made up the following percentages of total revenue in these states: Alaska – 72%; North Dakota – 54%; Wyoming – 39%; West Virginia – 13%; Texas – 11%; and Oklahoma – 8%. GPT would be a good place to start if Oklahoma really wants to “keep up with its neighbors.”

Thank you for allowing me to serve Oklahoma. For questions or comments call me at 405-557-7401 or email me at David.Perryman@okhouse.gov.

Your Urgent Attention to the Matter Would be Appreciated

Your Urgent Attention to the Matter Would be Appreciated - September 17, 2017

State Representative David Perryman

In the early 1960’s my parents used Dad’s VA eligibility to buy 80 acres and an old house. His job teaching agriculture kept him running and the absence of a local veterinarian made him the area “cow-doctor” as he and Mom worked to keep their growing family clothed and fed.

He bought a few cattle and gradually built a herd by keeping the heifers and sending the steers to market. When spring and summer grass was gone, we fed hay and supplemented their protein with 20% range cubes. Every time Dad opened a sack of cubes, he would remind us that “those cubes are a nickel apiece; they go in the trough and not on the ground.” Maybe a little hyperbole, but we understood.

When my siblings and I were old enough to really help with the cattle, Mom and Dad bought the Southard place which allowed for more head. One of his earlier cows had given birth to a black-baldy heifer that we immediately named “Stranger.” Stranger was a family pet and had turned into a pretty good mama cow herself. The only draw-back was that she had grown horns.

It had always been Dad’s intent to de-horn Stranger but it was not a priority. That is, until the cold winter day that just as he opened a sack of cubes and swung the sack up under his arm to pour it into the trough, Stranger walked up behind him and caught the feed sack with her horn and spilled the entire 50 pounds of cubes on the ground. Immediately priorities changed. As soon as we picked up the spilled feed, we moved Stranger to the head gate in the cattle pen and without further ado, her horns were no more. Priorities are funny things like that.

Whether we are talking about public education or economic development or rural health care or roads and bridges, Oklahoma has a litany of long neglected situations, each of which are detrimental to Oklahoma and its citizens, young and old.

It seems like state leaders are more interested in circling the wagons, cutting taxes and eliminating services than they are in planning for the future. Establishing priorities is the key to accomplishing goals and both require an investment in the future.

While much focus has been on oil and gas tax breaks and incentives and the fact that Oklahoma’s Gross Production Tax Rate on oil and gas production is less than 1/3 of the rate in most other energy producing states, less conversation surrounds the damage caused by the irresponsible income tax cuts over the past dozen years.

In what can only be described as a “rich get richer and poor get poorer” scenario, lowering the state’s income tax rate from 6.65% to 5% has decreased the state’s annual revenue by $1.022 billion while disproportionally benefiting those at the top of the income ladder. According to numbers released in January 2016 by the Oklahoma Policy Institute, the wealthiest 20% of Oklahoma households – those making on average $246,000/year – have enjoyed 72% of the benefit and the top 5 percent of households – those making on average $568,000/year – receive 43% of the benefit.

Meanwhile, those with household income of $62,200 and less – 60% of households – have received just 10% of the income tax reductions. Altogether, the wealthiest 1% of households in Oklahoma received nearly the same share of tax cuts as the bottom 80 percent.

According to those Oklahoma Policy Institute reports, the median Oklahoma household with annual income of $49,800 has seen its taxes reduced by $228, compared to a $15,519 cut for the average household in the top 1 percent (income of $476,600 and above).

Households making less than $21,700 – the bottom 20% of households – have received an average of just $4 per year from the income tax cuts. As a result, Oklahoma Policy Institute reports that the income tax cuts have left the poorest 20 percent of Oklahoma households paying 10.5 percent of their income in state and local taxes and the middle 60 percent paying 9.3% of their income, compared to just 4.3 percent paid by the wealthiest 1 percent.

Between income and gross production tax cuts it is no wonder that Oklahoma cannot afford 5 day per week schools and we are among the most unhealthy people in the country. Just a phone call or email will communicate to a legislator that, “Your urgent attention to the matter would be appreciated.”

Thank you for allowing me to serve Oklahoma. For questions or comments call me at 405-557-7401 or email me at David.Perryman@okhouse.gov.

Back to the Future

Back to the Future - September 3, 2017

State Representative David Perryman

With a plot that bounced between 1955 and the year 1985, Back to the Future’s twist on time travel captivated the minds and imagination of moviegoers thirty-two years ago. The quest of the lead characters, Marty McFly and Emmett “Doc” Brown was to restore the “fabric of the space time continuum” that they themselves had inadvertently disrupted.

That common theme resulted in two popular sequels that included scenes set in 1885 and a then “futuristic” 2015. Repeatedly, the pair called upon the time traveling DeLorean with its flux capacitor to preserve the progeny (and sometimes the ancestry) of the Brown or McFly genealogical lines.

The movies illustrate that the ability to tinker with the past impacts the present devastates the future. Nonetheless, we tinker, we manipulate and we suffer the unintended consequences. This week the Oklahoma Supreme Court issued a 5-4 Decision in a case involving the constitutionality of a statute that made a 1 ¼ cent sales tax applicable to automobile sales.

To understand how the Court’s Decision is similar to the pursuits of Marty and Doc, we simply need to review a bit of history. For Oklahoma’s first 85 years our Constitution has contained requirements that “bills for raising revenue” must originate in the House of Representatives and must not be passed during the last five days of session. During that era, people elected legislators to decide when to raise revenue or when to decrease revenue.

Unfortunately, by 1989, Oklahoma’s per pupil expenditures had dropped to 46th while teacher’s salaries had slid to 48th in the country. In response, 1990 saw what may be one of the proudest accomplishments in Oklahoma legislative history when Democrats and Republicans, during the administration of Republican Governor Henry Bellmon stepped up and enacted true reform for public education and education funding in the form of HB 1017. For a time, it appeared that Oklahomans and their elected officials truly cared about their state and the future of their children.

The success of HB 1017 launched a movement that ultimately assumed control of Oklahoma government and continues to guide public education down a path of destruction. In 1991, anti-public education groups, seeking to seeking to REDUCE teacher pay and REMOVE the cap on class size, had State Question 639 placed on the ballot to repeal HB 1017.

By the slim margin of 54.3 to 45.7 percent and despite the support of the editorial board of the state’s largest newspaper, Oklahoma voters preserved the reforms of HB 1017. However, those numbers emboldened education opponents who charted another path toward their goal.

Shortly thereafter, they had gathered enough signatures to place SQ 640 on the ballot to require that all revenue raising bills must either be passed by a vote of the people or the approval of 75% of both the House of Representative and the Senate and the signature of the Governor.

The passage of SQ 640 in 1992, signaled that the majority of Oklahomans were serious about restricting the ability of legislators to increase revenue. It is often said that the restriction is an insurmountable impediment, some see it as insurance that fiscal needs must be real and urgent before addressed. Others believed that it could foster bipartisan cooperation.

So did SQ 640 work to allow bipartisan solutions? The 2017 legislative session was the real test. Oklahomans demanded more revenue for the classroom and for teacher pay. Legislative leaders proposed a cigarette tax for health care and a vehicle sales tax for general revenue. Conventional wisdom was that the taxes needed 76 votes in the House to pass. While the majority party had 72 votes, only around 55 members of the majority party would vote for those revenue measures.

The 26 members of the minority party saw an opportunity to use SQ 640 as a tool to negotiate an increase in the Gross Production Tax to pay for things like teacher pay raises in return for their vote on a the tax increases proposed by the majority party.

The result was that the minority party was not allowed to negotiate. The majority party pushed through a cigarette tax and a vehicle sales tax. The Court has held one constitutional and the other unconstitutional.

We are back to the future, where we began. Gross Production Tax increases will not be considered unless the majority party allows it. The Court’s decision has made the minority party irrelevant and the future of our state depends on the majority party…and the voters of Oklahoma.

Call 405-557-7401 or write David.Perryman@okhouse.gov

Chinese Proverb Says....

Chinese Proverb Says… - August 13, 2017

State Representative David Perryman

In case you haven’t heard, the state’s budget is in a lurch. In what may be the most predictable decision of the century, the Oklahoma Supreme Court ruled last week that the leadership in the Oklahoma legislature violated the Oklahoma Constitution when they passed Senate Bill 845 to increase cigarette taxes.

It isn’t that Oklahoma doesn’t need the revenue. Over the past decade, state income tax rates for high income earners has been cut from 7 to 5% and the 7% gross production tax rate traditionally paid by oil and gas companies has been lowered to 1 and 2% during the periods when the wells are most productive.

As a result, decreased revenues cause most Oklahoma agencies to employ far fewer people than they did in 2006, even though the population has grown and the state struggles to provide services.

For instance, the Department of Public Safety has curtailed operations to the point that today, only a limited number of counties have driver examination testing centers and residents must drive up to an hour or more to stand in long pre-dawn lines at a first come, first served testing center.

The story is the same in other agencies. The number of full time DHS workers has decreased by approximately 8% over the past decade while caseloads have skyrocketed. Also, budget cuts have resulted in the closure of state parks and other recreational areas. Not only are citizens prevented from enjoying some of our most beautiful natural resources, small businesses all across the state that once benefitted from our once thriving tourism industry have been negatively impacted.

So what do we do about revenue?

Democrats say that our current tax system disproportionately burdens the working class and poor and that any increase in sales, tobacco or fuel taxes would simply further shift the tax burden to those who right now are just getting by.

Republicans refuse to consider a reversal of the state income tax cuts or a restoration of the gross production tax rates on oil and gas companies.

In 1992, Oklahoma voters adopted State Question 640, requiring the vote of at least 75% of both houses of the legislature to increase taxes. That equates to 76 votes in the House and 36 votes in the Senate. Even though Republicans outnumber the Democrats in the State House by 74-27 and in the State Senate by 39-9, the Republicans cannot increase sales taxes or tobacco taxes or fuel taxes without at least 3 or 4 Democratic votes.

Democrats have been resolute that they are not willing to vote in favor of a sales tax increase on any items, including cigarettes or vehicles, if the Republicans don’t make high income earners and oil and gas companies pay their fair share of taxes.

Rather than reverse any of the income tax cuts or restore the oil and gas tax rate, the Republicans chose to enact tax increases on the sale of tobacco and automobiles and ended up with the decision issued by the Oklahoma Supreme Court.

The current impasse brings to mind a story about five Chinese brothers from one of my grade school readers. It was written by Claire Hutchet Bishop in 1938 but was based on a legendary Chinese folk tale. The story involved a family whose five sons looked exactly alike and each possessed a special talent. One could swallow the sea, one had an iron neck, one could stretch his legs for miles, one could not be burned and one could hold his breath forever.

The story begins when the brother who could swallow the sea was gathering fish from the bottom of the sea. When that brother agreed to allow a young boy to accompany him, the youngster ignores the brother’s repeated warning to go to higher ground. When the brother can no longer hold the sea, the young boy is drowned. The village charges the brother with murder and sentences him to death.

One by one, unbeknownst to the villagers, the four remaining brothers each assume the condemned brother’s place and each use their own superhuman ability to survive (one cannot be beheaded, one cannot be drowned, one cannot be burned, and one cannot be suffocated). At the end of the story, a judge decrees that the accused must have been innocent, since he could not be executed.

The legend originates from the Ming Dynasty and is over six hundred years old. Each adaption varies slightly with some accounts having as many as ten brothers. The lesson however, is always the same. The brothers are only able to survive by working in unity. That is a lesson that lawmakers should heed.

The current impasse is detrimental to the citizens of our state. Voters want lawmakers to work together for a bi-partisan solution. State Question 640 forces that cooperation. Negotiation is the only path to resolution. It is past time to negotiate and all things must be on the table.   

Thanks for allowing me to serve in the Oklahoma legislature. If you have questions or comments, please call 405-557-7401 or write David.Perryman@OKHouse.gov.

When Six of One is NOT Half a Dozen of Another

When Six of One is NOT Half a Dozen of Another - July 30, 2017

State Representative David Perryman

                My Dad was a Vo-Ag Instructor of the old school. He taught hundreds of young men about much more than just farming and ranching. Maybe it was because he grew up young having lost his mother, enlisted in the Navy and married my mother all before he graduated high school. Maybe it was because he understood that in life few decisions are either good or bad but the bulk of our decisions are what we make of them.

He taught young men that dwelling on success was just as harmful as dwelling on failure and that if a decision was not obvious, then it was probably “six of one and half a dozen of another.” In fact, that was one of my Dad’s most often used phrases. It wasn’t that he didn’t counsel students; they were taught to fully assess their options. He simply made certain they knew when a decision is made, it is time to move forward with life and not be burdened with ‘second guesses.”

While “six of one and half a dozen of the other” aptly describes many of our life decisions, it is not a suitable adage when we consider how to address Oklahoma’s revenue shortfalls. All taxes are NOT the same.

As the Oklahoma legislature concerns itself with budget shortfalls, revenue failures and devastating cuts to agency appropriations, the debate over cause and effect still echoes through the Capitol rotunda. One group, mostly ultra conservative Republicans, still maintain that the state does not have a revenue problem and that the solution to Oklahoma’s financial situation is to make more budget cuts.

Of the two groups who do believe that Oklahoma has a revenue problem, one, mostly moderate Republicans, seek to cure Oklahoma’s funding problem through the implementation of fees and taxes like a sales tax on new and used automobiles; charging an additional 7.5 cents for each cigarette purchased; and capping the amount that non-itemizing Oklahomans may claim as a standard income tax deduction.

The other, mostly moderate Democrats, believe that Oklahoma’s budget woes are directly related to income tax cuts and oil and gas gross production tax cuts over the past decade. They point to statistics issued by the Oklahoma Policy Institute that those tax cuts cost the state of Oklahoma somewhere between $1.6 and 1.8 Billion per year. That amount of money would go a long way toward filling our budget hole and doing things like paying teachers, repairing highways and making Oklahoma safer.

So what have Oklahomans received in return? Well, the 20% of Oklahomans who make less than $12,700 pay $4 per year less income tax than they did before the cuts. The next 20% who make less than $28,400 annually have seen their income tax go down by $6 per month. The monthly savings for the third 20% who make less than $49,800 is only $19 per month. Unfortunately, these meager savings are eclipsed by literally hundreds and thousands of dollars of lost services, potholes and cuts to education, all of which directly impact low income Oklahomans.

The real winners in the tax cut game are those who earn in the upper 20% of wages who see thousands of dollars in income tax savings. For instance, the upper 1% saw their income tax bill drop an average of $16,519 per year.  That is a lot, but only a very small portion of their average income of $1.6 Million per year.

Unfortunately, those legislators who want to ignore the income tax cuts and make up the difference in sales tax and taxes on services and tobacco are simply piling more of a burden on lower income Oklahomans who spend 100% of their income while allowing the wealthy who keep much more of their income (and very likely spend less in our state) to enjoy the lower income tax rates.

As a result, Oklahoma’s tax burden has been shifted from high income earners to low income earners. Perhaps that was the goal all along since “six of one is not half dozen of the other.”

Thank you for allowing me to serve in the Oklahoma House of Representatives. It is truly an honor.  Call or write with any questions 405-557-7401 or David.Perryman@OKHouse.gov.

The Gift that Keeps on Giving

The Gift that Keeps on Giving - March 15, 2015

State Representative David Perryman

Captured images and phrases often become iconic trademarks in industry and merchandising. One such image was that of Nipper the Dog sitting next to a Victrola listening to “His Master’s Voice.” Victor Talking Machine Company also originated and beginning in 1925 owned the rights to the phrase, “The Gift that Keeps on Giving,” for use in marketing its records and phonographs.

As Americans work toward the April 15 personal tax filing date, much effort is expended to capture deductions, tax credits and subsidies thereby decreasing personal income tax liability so that less money is sent to Uncle Sam. While the tax code is complex, those of us who own businesses or work for businesses that pay all or part of our health insurance premiums, are on the receiving end of a “Gift that Keeps on Giving.”

Unfortunately, Oklahoma refuses to establish an Oklahoma marketplace for private insurance companies to sell Affordable Health Care policies putting low-income working Oklahomans whose employers do not provide health insurance on the giving end of a gift that keeps on taking.

The plight of those low-income Oklahoma employees who have no work related health insurance is in the balance because Oklahoma’s Attorney General is seeking to prevent them from receiving the same federal tax credit those residents of states that did establish an insurance marketplace receive.

Since they are employed, they earn too much to qualify for Medicaid and more than 126,000 of them responsibly signed up to purchase health insurance under the Affordable Care Act. The average annual tax credit to defray the cost is $2472. However, the Attorney General wants to take away that tax credit as stated in oral arguments held last week before the Supreme Court.

Amazingly, while this red state is attempting to block a federal tax credit that averages $2500 per year to those working Oklahomans, other Oklahomans whose insurance is provided by their employers enjoy tax free health insurance benefits that often are as high as $12,000 or more, per year. 

For instance, when an employer provides an employee with health insurance, 100% of the cost paid by the employer is a tax free benefit AND a business expense write off to the employer. Couple that with the normal Section 125 Flexible Benefits Plan allowing thousands more dollars of tax-exempt income to be set aside to pay deductibles and co-pays, and a $206 health insurance tax credit given to the working poor to decrease their after-tax out of pocket expense for health insurance pales in comparison. 

Call it a deduction or a subsidy; it is tax free income that is truly a gift that keeps on giving.

The subsidy given to employees who have employer provided health care was $248 Billion in 2013, according to an article by Washington DC correspondent, Chris Casteel, in the March 2, 2015, edition of the Oklahoman. Casteel quoted the non-partisan Congressional Budget Office, “the income exclusion for employer-sponsored health insurance is the single largest tax expenditure in the individual income tax code,” and that does not even count the foregone employee tax on the benefit.

As Oklahoma’s low wage workers are signing up for Affordable Care Act policies in numbers that are greater than projected, Mike Rhodes, a deputy commissioner with the Oklahoma Insurance Department stated that, “The public is catching on; they understand the program.”  Unfortunately, if successful, the Oklahoma Attorney General’s lawsuit to unravel the Affordable Care Act will take the tax credits from those struggling Oklahomans who are least able to afford the loss, yet strive to be personally responsible for their health care.

All the while, those who receive tax free health insurance benefits through their jobs continue to receive the gift that keeps on giving.

Thank you for allowing me to serve as State Representative.  If you have questions or comments about this issue or any other matter, please contact me at David.Perryman@okhouse.gov or 800-522-8502.

Oklahoma Policy and Human Value

Oklahoma Policy and Human Value - January 4, 2015

By State Representative David Perryman

In 1943, during World War II as the Allies were driving back the Axis powers across Europe, President Franklin Roosevelt was informed that huge caches of artwork and cultural treasures were being destroyed by Nazis. In response, he commissioned the Monuments, Fine Arts and Archives platoon.

The group, consisting of 17 middle aged men and a few women who interrupted careers as historians, architects, museum curators and professors, searched for, recovered and returned to the rightful owners, hundreds of thousands of priceless artwork and treasures that would otherwise have been destroyed.

A Harvard professor, George Stout was a member of the platoon and was the basis of the character portrayed by George Clooney in the 2014 movie, The Monument Men. Clooney’s character summed up the urgent mission of the platoon when he said, “You can wipe out an entire generation, you can burn their homes to the ground and somehow they'll still find their way back. But if you destroy their history, you destroy their achievements and it's as if they never existed. That's what Hitler wants.”

In a broader sense, the professor was stating an absolute truth that goes to the very core of man’s existence: The fundamental difference between humanity and all other living creatures is that a life without a creed, a heritage, or a religion, is a life without purpose. Consequently, stripping those anchors strips a life of meaning.

During that same war, Viktor Frankl, a young Jewish doctor from Austria was stripped of all humanity having passed through four concentration camps, lost his parents, his wife and most of his family. At war’s end, Frankl authored Man’s Search for Meaning, considered by many to be one of the ten most influential books of the twentieth century.

Quoting Frankl’s message, “There is nothing in the world, I venture to say, that would so effectively help one to survive even the worst conditions as the knowledge that there is meaning in one’s life.” Conversely, the most effective way to murder the human spirit is to devalue the person by eliminating its sense of greater purpose.

Observing current Oklahoma political direction, it is difficult to locate a single policy that would tend to nurture self-worth in students or teachers by saying that we are willing to commit enough funding to even bring them closer to the regional average.

It is virtually impossible to find any plan that would communicate to those without access to health insurance and health care that they have sufficient intrinsic value that we should even be concerned.

A vocal and aggressive contingent of citizens refuse to mandate that working Oklahomans who live in poverty be paid a wage that is sufficient to house, clothe and feed a family or to purchase and insure adequate, reliable transportation.

When public policy says a person has zero value, identifying one’s purpose becomes virtually impossible.  Unfortunately, the devaluation of a class of people ultimately devalues all classes of people.

Oklahoma’s current preoccupation with cutting taxes has and will continue to cripple our ability to educate our children, have safe roads and bridges, allow correctional employees a safe place to work, improve access to health care, treat mental health and move this state forward.

Words of compassion ring hollow when public policy communicates that many Oklahomans are simply not worth the trouble. The 55th Legislative Session will begin in a few short weeks. Will it perpetuate an agenda that robs them of all purpose? Or will we be led by “Monument” legislators who search for solutions, recover hope and return opportunity to the people?

Rep. Perryman may be reached at 405-557-7401 or David.Perryman@okhouse.gov.

Following the Yellow Brick Road

Following the Yellow Brick Road - May 18, 2014

State Representative David Perryman

This summer will mark the 75th Anniversary of the original release of MGM’s “Wizard of Oz.” It’s amazing to think about my Mom and her friends standing in line in 1939 to buy a movie ticket for a showing at Carnegie’s Liberty Theater.  That theater is Oklahoma’s longest continuously operating theater and will soon celebrate its centennial.

A couple of decades later, when I was born, the movie was shown annually on TV.  Whether we were frightened by the Wicked Witch of the West, amused by the Munchkins, awed by the Technicolor cinematography or captivated by the award winning musical score, the pop culture of “The Wizard of Oz” impacted our lives. So important to American culture is the movie that the Ruby Slippers worn by Judy Garland now reside in the Smithsonian Institute. 

However nothing from the screenplay pervades our being more deeply than the quotes of the characters. Lines like, “Toto, I’ve a feeling we’re not in Kansas anymore” to “I’ll get you, my pretty, and your little dog, too!” have been incorporated into the very being of generations of Americans.  Because of this iconic movie, we all know that people who do good deeds are called “phila… er, phila… er, yes, er, Good Deed Doers.”

Upon being deposited in Munchkinland, courtesy of a tornado, Dorothy realizes that her Aunt Em and Uncle Henry will be missing her.  Immediately, her desire to be with them and the safety of their turn of the century Kansas farmstead becomes the enduring theme of the story.

Dorothy is advised that the all-powerful Wizard of Oz is surely her best hope to ever return home and that to get to Oz and ultimately to Kansas, she must, “Follow the Yellow Brick Road” that conveniently started from right there in the middle of the village.  Dorothy and Toto wasted no time in embarking on their journey.

Here in the heartland, Oklahoma shares much with Kansas.  Geography, climate, rainfall, agricultural crops and tornado seasons make life similar, but Oklahoma’s current desire to emulate Kansas politics and Kansas fiscal policy may be the trait that is most onerous.

In 2013, Kansas faced a budgetary shortfall in excess of $700 Million and that budgetary crisis placed core services such as education, roads, bridges and corrections at severe risk, resulting in core services being cut and deteriorated roads.  How did Kansas arrive at that crisis? By cutting income taxes and therefore cutting revenue without having the courage to eliminate tax credits, tax exemptions, tax moratoriums and government giveaways.

This condition did not arise overnight. As a result of this catastrophe, since 2011, 86 of Kansas' 105 counties have been forced to increase property taxes to fill the gap left by reduced state funding and the income tax cuts.

To face the 2014 budget shortfalls, what was the response of the “conservative” Kansas Governor and legislature? Extend the 6.3% STATE sales tax; Increase local real property taxes by as much as 5.7% in some counties; Extend tax breaks and tax credits totaling millions of dollars to “small” businesses like Koch Industries; and Eliminate wage earners’ income tax deductions like the home mortgage interest deduction and the real estate tax deduction.

Coupled with these “reforms” were attempts to destroy the independence of the Kansas Judiciary by making appellate judges appointed by politicians.  Does all this sound familiar?

As a true fiscal conservative, I say that we should not go down that yellow brick road trying to get to Kansas.  If Kansas wants a 6.3% STATE sales tax rate, I would rather stick with our statewide rate of 4%. 

According to the latest OSF on the State of Oklahoma website, Oklahomans pay only 1.48% of their personal income on property taxes compared with 3.75% in Kansas and 3.96% in Texas.  If Kansas wants to raise its property taxes, I say power to them.

If Kansas wants to destroy its educational system and its rural fire protection and its transportation system by eliminating its income tax and leaving tax credits and moratoriums in place, that is their business.  Supporting the elimination of income tax would be an easy choice if elected officials would institute a fair and equitable tax policy to provide for the operation of government.

It is the people’s money; let’s stop giving it away as corporate tax credits, corporate tax exemptions and corporate tax moratoriums.  When we have the courage to do that, then we can cure water problems, properly fund education, fix our roads and bridges, provide for fire protection and give it back to the people.

Likewise, we cannot afford to put all our eggs in one basket.  As in Dorothy’s song when, “the wind began to switch; the house, to pitch; and suddenly the hinges started to unhitch,” the oil and gas industry will not last forever.  Those of us who saw it bust in the 1980’s during the Reagan years know that it is a matter of time until it happens again.

Cutting the income tax which is our state’s primary revenue source makes it impossible to meet our financial obligations unless we eliminate the $400 million that we annually give away in tax credits and eliminate the moratorium on $600 million more in taxes.

So the next time someone tries to take us down the yellow brick road to the “Kansas Model of Fiscal Irresponsibility”, remember Dorothy’s conversation with the Scarecrow when she asked him, “How do you talk if you don’t have a brain?” and his response, “Well, some people without brains do an awful lot of talking don’t they?”

Thank you for allowing me to serve as a State Representative.  If there is anything that I can do to assist you, call me at 405-557-7401 or email me at David.Perryman@okhouse.gov. I look forward to hearing from you soon.

Tax Credits, Tort Reform and Tea in the Boston Harbor

Tax Credits, Tort Reform and Tea in the Boston Harbor…The Common Good - August 25, 2013

State Representative David Perryman

On December 16, 1773, One hundred sixteen men, several of whom were dressed as members of the Mohawk tribe, threw 342 chests full of tea into Boston Harbor.

The rest of the story involves tax credits, government bailouts, monopolies, American ships and yes, even tort reform in 2013. 

It is natural to think that the Boston Tea Party as it has become known was a reaction to high taxes imposed by the British Parliament. 

However, to understand the issues that precipitated the event that for decades was simply known as “the destruction of the tea” we have to go back to December 31, 1600, when the British Crown chartered and granted favored status to a business known as "The Governor and Company of Merchants of London, trading with the East Indies" for the importation of agricultural goods and products from the area of India and the Middle East.

In time, the mega-corporation that had its own military, counted opium among its commodities and for several decades was the world’s largest drug-dealing operation became known as simply, “The East India Company,” or the “EIC”.  Many members of parliament owned interests in the EIC and eerily like 21st century politics, the company’s paid lobbyists were always available to “help” make laws.

Through favorable legislation, government incentives and protectionist policies, the EIC reaped huge profits and lined the pockets of England’s merchants and members of parliament.  Enter the American colonies.  The EIC eyed the emerging American market, however, 85% of the tea drank in America was smuggled Dutch tea. In 1767, lobbyists for the East India Company compelled parliament to grant it a tax credit rebating to the company a chunk of the tax on tea that was re-exported to the colonies so that it could compete with the smuggled tea. 

In 1772, the tax rebate expired.  Sales plummeted, warehouses were full of unwanted tea and the EIC, perhaps England’s most profitable commercial entity was in dire financial trouble.  May 1773 dealt a blow to free enterprise when the lobbyists of the East India Company convinced parliament to enact the “Tea Act”, restoring the tax credit and allowing the company to bypass colonial businessmen who had previously bought and sold tea.  In July 1773, the East India Company selected agents in the colonies who would simply be hired to sell tea on commission.

What transpired aboard the Dartmouth, the Eleanor and the Beaver, three American ships carrying East India Company tea into Boston Harbor was not at all about high taxes.  As a result of the Tea Act, East India Company tea was now cheaper than smuggled Dutch tea. 

The destruction of the tea was as much of a protest against a large commercial conglomerate that had used its financial and political influence to create a government sanctioned monopoly as it was about a lack of representation.

The benchmark of the United States is its system of private capitalism.  Theoretically, and as it should be, it is a system under which, without asking anybody’s permission, various enterprises compete with each other in the market by offering the highest quality goods and services they can, at the lowest possible prices.  Progress occurs as companies and individuals strive continuously to raise quality and lower their prices.

In September, the legislature will return to Oklahoma City.  The special session has been called to review several statutes that were adopted in 2009 and ruled unconstitutional earlier this year. Among other things, those statutes limit the amount of money an injured person or the family of a deceased person may receive from the person or company who caused the damage, injury or death; make it more expensive to sue a company or another person who has caused injury or death; and make it more difficult to hold someone accountable if they harm a person, such as a nursing home resident or a child.

Our Founding Fathers drafted the Constitutions of the United States and the State of Oklahoma to give ordinary citizens the right to hold accountable those who violate the rules of society and cause harm to others.  We must carefully examine whether the legislation that will be introduced this session will be in the common good.  The last thing we should do is allow the rights of the people to govern themselves through trial by jury to be taken away or infringed.

On the day after the Destruction of the Tea, John Adams, who would later become our nation’s second President wrote in his diary, “Last Night three cargoes of tea were emptied into the sea. This morning a Man of War sails. This is the most magnificent movement of all. There is a Dignity, a Majesty, a Sublimity, in this last effort of the Patriots, that I greatly admire. The People should never rise, without doing something to be remembered—something notable and striking. This Destruction of the Tea is so bold, so daring, so firm, intrepid and inflexible, and it must have so important consequences, and so lasting, that I can’t but consider it as an epoch in history.”

Contrary to the Common Good, the East India Company sought government protection before America’s Independence.  Will the Common Good be served in this century by those corporations and their lobbyists who want government to step in and artificially tilt the scales of justice in their direction?

I appreciate the opportunity to serve in the Oklahoma House of Representatives.  I look forward to hearing from you at David.Perryman@okhouse.gov or 405-557-7401.

Committee Assignments, Fiscal Cliff, etc.

It is January and Oklahomans are thawing out from the longest period of below average temperatures in several years.  We are thankful for the snow over the holidays and that power outages were rare compared with other parts of the country.  As we move forward into 2013, away from one of the driest, and THE record hottest year, we hope and pray that increased rainfall will be a frequent and consistent part of our weather forecasts this year.  We can talk about legislation and public policy and tax laws, but there is absolutely nothing that devastates the economy and the quality of life in District 56 more than a lack of rainfall.