Oklahoma Considering Sales Tax Increase to Support Education


Sales tax increases have been proposed or approved in several states to support education with varied results — and Oklahoma may be the next to experiment.

For some states, the tax hikes have remained in place for years and have had the intended result, expanding or balancing education spending. But another result has been having the tax increase repealed by voters and a then having a second tax run into legal problems, writes Kevin Hassler of the Enid News & Eagle.

Such a proposal is in the works in Oklahoma by University of Oklahoma President David Boren, a former governor and US senator, a proposal which has already been implemented in Iowa, Arizona, Idaho, Florida, and Georgia. If voters agree, the tax plan will go forward in 2016 and would increase the state’s sales tax by one cent, resulting in a $600 million boost for education. Most of the increase would be used to raise teachers’ salaries.

A voter-approved penny sales tax was put in place in Sioux City Public Schools in Iowa in 1998. The extra money was used for constructing new schools. By 2005, all but three counties in Iowa adopted the sales tax.  According to Brad Hudson, a government relations specialist for Iowa State Education Association, the Legislature voted to have the entire state implement the tax and, as a result, over $1 billion has been spent rebuilding or upgrading Iowa schools.

The tax will come up for re-vote at the end of this decade and the question is whether the manner in which the money is spent be expanded.

“It’s done a lot of good across the state of Iowa for improving schools,” Hudson said. “The discussion is changing to, ‘Does this entire amount need to go toward infrastructure, or should some of it go to operational costs or programs for low-income students?’”

Scott Inman (D-Del City), the Okahoma house minority leader, is concerned that such a hike might mean the Legislature would use it to replace existing education funding. He would have the tax hike money put above and beyond what education is already being given.

The proposed penny sales tax increase would cost medium-income residents about $262 annually, lower-income families would be adding about an average of $90 each year, and the top 1% would be paying around $1,691 per year, according to a new data analysis. Based on percentage of income, the low-income group would bear the hardest burden, since this sector spends a larger portion of their income on retail purchases, according to Warren Vieth writing for Oklahoma Watch.

The analysis was prepared in response to the proposal and was created by the Institute on Taxation and Economic Policy, a Washington, D.C. research organization. David Blatt, executive director of the Oklahoma Policy Institute, said:

“We’re supportive of the goals, but disappointed in the revenue source. It will be felt more by low- and middle-income families, many of whom are struggling.”

An editorial by the writers at Tulsa World begins by sharing the name of  the proposal, Oklahoma Children – Our Future. Based on estimated numbers, the tax would be enough to fund a $5,000 -a-year pay raise for teachers; $125 million for higher education aimed at holding down tuition increases; $50 million for early childhood education programs; $50 million for grants for local public school reform; and $12.5 million for career technology schools.

The editors agree that the need is there since Oklahoma’s schools and most other aspects of the state government are suffering because of poor fiscal decisions. But they are not in total agreement with the sales tax hike, especially because of how it will affect poor people. The writers salute David Boren and call him “the most trusted man in Oklahoma because of his decades of “service, wisdom, and bravery,”” adding that all three of those attributes will be needed to push this cause, and Boren is the best man to have at the helm.

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