State LEgislature Overrides Veto of Revenue-Raising Bill

Article excerpt

"Tax equity, not a tax hike" was the theme that resulted in an override Thursday by the Oklahoma Legislature of the governor's veto of Senate Bill 1121.

Walters struck back by appointing Norman attorney Stan Ward to represent the governor as special counsel to challenge the constitutionality of the Legislature's action in court.

The bill, which would raise the income taxes of out-of-state residents who work part time in Oklahoma, was viewed as a revenue-raising measure by opponents.

According to State Question 640, approved by state voters, the Legislature can't raise taxes without a vote of the people or a three-fourths vote of the membership.

Proponents, however, said the bill would merely change the tax calculation formula so that out-of-state residents would pay Oklahoma taxes in a proportion equal to Oklahomans.

The Senate easily overrode the veto on a 43-2 vote. It was harder fought in the House, where 68 votes were needed, and the roll call was stuck on 66 for nearly two hours before the votes were obtained. The final vote was 68-30.

Walters bitterly opposed Senate Bill 1121, saying it would put a damper on outside investment in the state.

"Historically, Oklahoma has been starved for capital to fuel its economy," Walters said in his veto message. "Much of our success in economic development over the past three years has depended upon our businesslike ability to balance our budget, hold taxes in line and engender confidence in our state through prudent management.

"Simply stated, a 75 percent income tax increase on nonresidents who have demonstrated their faith in Oklahoma by investing here flies in the face of all that we have accomplished," Walters wrote.

"It is my genuine fear that passage of this single bill, which will affect almost 90,000 taxpayers, will seriously erode our successful efforts to position Oklahoma nationally as a pro-business state worthy of sizable outside investment."

But legislators who favored the bill, which would raise about $18.2 million, pointed out that it would affect individual income taxes and not investment income.

"What we're trying to do in this bill is not give the nonresident a break over the residents in the state of Oklahoma," said Sen. Jack Bell, D-Idabel.

"Aren't your constituents and my constituents just as good as the residents of Kansas and Texas? I think so," said Sen. Keith Leftwich, D-Oklahoma City.

"If they earn a total of $50,000 in two states, they're going to pay in Oklahoma on a $50,000 tax bracket. We're discriminating against Oklahomans if we do not pass this bill," he said.

"How the governor can say we're discriminating against out-of-state investors when we're not taxing investment income is beyond me."

Leftwich noted that there was a separation of powers between the governor and Legislature, "but there should also be some unity and teamwork."

Citing a "barrage of press releases" from the governor's office against Senate Bill 1121, Leftwich said: "It seems to me that throughout life we all have to be able to work and play well with each other."

Walters should state his position through his veto message, rather than press releases, Leftwich said, referring to "an attempt at using the media to intimidate and stampede the Legislature."

Sen. Bruce Price, D-Hinton, said lawmakers had a responsibility to their constituents to level the playing field, "which this bill does. It won't have the effect the governor says it will. . .these people are here because they want to be here and earn income in this state," he said.

Sen. Don Williams, D-Balko, the bill's Senate author, said a tax accountant and certified public accountant had asked him how long the "loophole" would remain in Oklahoma law for the part-time residents. …