State officials appear reluctant to openly support suspending sales tax exemptions enjoyed by many Oklahomans.
Last week, Rep. Danny Hilliard, House speaker pro tempore, said lawmakers may consider temporary elimination of tax exemptions to generate money for this year's budget.
"I think everything is out there on the table," said Hilliard, D- Sulphur.
He noted that educators are seeking a hike in the state sales tax and the ability to hike property taxes, and said the temporary suspension of current sales tax exemptions -- "and there's a litany of them that we have given over the years" -- should also be part of the discussion.
But Hilliard isn't receiving backing from his party's highest- profile leader.
"Governor Henry knows that there are discussions going on on that issue. He doesn't know the specifics of those discussions," said Paul Sund, a spokesman for Gov. Brad Henry. "He's not surprised that they're looking at things like that because they're looking at every possible angle in a budget-crisis year. But his focus -- the focus of the Henry administration -- is going to be examining every agency budget for inefficiencies and trying to redirect any revenue they can to priority areas like education and health care."
Sund also said creation of a state lottery to fund education will also be a priority for Henry.
Hilliard said he does not have any specific exemptions in mind, but noted that lifting any exemption "gives you instant revenue."
"That's the quickest way to get cash, basically," Hilliard said.
He said the amount generated by lifting exemptions could vary widely, but any reduction in the state revenue shortfall would help prevent cuts in state agency budgets.
The state's tax revenue shortfall is expected to run close to $600 million lower than the amount allocated for last year's budget. (However, because state agencies have had to cut spending since the close of the 2002 legislative session, only about $250 million in total cuts still have to be enacted.) Hilliard noted that if lawmakers fund education at the same level set in last year's budget, other agencies will face total cuts of close to $758 million.
"That would be your Health Care Authority, your Corrections Department, your human services," Hilliard said. "They're the ones that have the $400-plus million budgets, the bigger budgets that would really have to take the major (cuts). And that just doesn't work."
He said cuts of that magnitude would essentially shut down the Health Care Authority, which would have to cut the state's Medicaid rolls to provide health care coverage only to those with coverage mandated by the federal government.
The prison system could face a 36 percent cut, which could be very difficult to implement without reducing public safety, Hilliard said. …