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Capitol News Update     

 

September 24, 2012 

 

 

       Governor Fallin told the Wall Street Journal recently that she intends to accomplish lowering the top Oklahoma income tax rate from 5.25% to 4.8% or lower during the next legislative session. I haven't seen figures lately as to how much revenue loss going to a top rate of 4.8% would mean for the state. Last year Kansas, due to the efforts of Governor Sam Brownback, lowered its top rate from 6.45% to 4.9%. According to Wayne Greene of the Tulsa World this will cost the Kansas budget $2.5 billion over the next 5 years. This will average an annual $500 million loss of revenue in Kansas for the 5-year period and beyond. With a population of about a million more people, Oklahoma has already passed income tax cuts of about $1 billion annually.  

 

       Greene reports that Brownback has ordered Kansas state agencies to prepare for a 10% budget cut next year. 54 of the approximately 300 Kansas school districts have sued the state claiming state support fails to cover the basic costs of education. Greene points out that in Oklahoma those pushing for tax cuts have claimed that the tax cuts will bring enough new business to the state to make up for the lost revenue. So far that theory hasn't worked in Kansas.

 

        I've been under the impression that Kansans have been accustomed to an excellent and well-funded school system so I checked a few numbers. According to the Bureau of Census the average annual expenditure per pupil nationally was $10,615 for the school year 2009-2010. In Kansas it was $9715, while Oklahoma spent $7896 per pupil the same year. Results? One neutral measure of educational results might be ACT scores. About three quarters of students in both Kansas and Oklahoma take the ACT. The average composite score in Kansas is 22 while Oklahoma's is 20.7. The national average is 21. So, Kansas is a whole point above the national average while Oklahoma is almost a point below the national average.

 

        Politics in Oklahoma and Kansas seem to be pretty much on the same track these days. While Kansas has been a Republican state for a long time it has certainly become more conservative in the past few years, culminating with the election of Governor Brownback. In a similar move to the right Oklahoma has gone from Democratic to Republican although Governor Fallin, I believe, has not been known as an arch conservative in the same vein as Brownback. Oklahoma has felt the effects of its tax cuts already, but they've been somewhat masked by the recession. As Oklahoma moves forward with more tax cut proposals, it might be wise for elected officials to keep an eye on the reactions of Kansans to see how it's worked for them.  

Okla. AG amends lawsuit attacking health care law

By Tim Talley

Associated Press

OKLAHOMA CITY - Oklahoma Attorney General Scott Pruitt on Wednesday amended a federal lawsuit that challenges the nation's health care overhaul, continuing a legal fight that appeared to be over when the U.S. Supreme Court upheld the law almost three months ago.

Pruitt's 23-page amended petition, filed in U.S. District Court in Muskogee, challenges procedures created to help implement the new law and the effect they will have on Oklahomans. Pruitt's original lawsuit, filed in January 2011 shortly after he took office, challenged the constitutionality of the federal law and its requirement that all Americans purchase private health insurance or pay a penalty.

The amendment was filed on the last day the lawsuit could be amended under an order filed by U.S. District Judge Ronald White, who lifted a stay in the case.

White had halted the case while the Supreme Court decided a separate lawsuit filed earlier by Florida and 25 other states that also challenged the law and its individual mandate. In a 5-4 vote, the nation's highest court upheld the health care law on June 28.

In its ruling, the Supreme Court said Congress lacks the power under the Constitution's commerce clause to put the individual mandate in place. But the court ruled that the government has the power to impose a tax on people without health insurance.

Pruitt, a Republican former state senator and frequent critic of federal government policies under Democratic President Barack Obama, said the state's amended petition makes it the only active lawsuit challenging the federal Affordable Care Act that seeks to hold the government accountable in how it implements the law.

"Now that the Supreme Court has deemed the ACA a tax, and therefore constitutional, the federal government must follow the law and proper procedures, and that is not being done," Pruitt said in a statement.

The amended complaint challenges a new Internal Revenue Service rule that will help implement the law and seeks recognition that the Oklahoma Constitution protects citizens from mandated purchases of health care.

It alleges that federal regulations and plans to create online insurance marketplaces do not comply with the Administrative Procedures Act and should be invalidated.

The insurance exchanges are a key component of the health care law and will permit people to shop for health insurance and buy policies. Like many other Republican-controlled states, Oklahoma resisted setting up new online marketplaces. The law allows the U.S. Health and Human Services secretary to establish exchanges in states that choose not to.

"Under the Act, this choice has important consequences for the state's people and the state's economy," the lawsuit states. States that create their own exchange are eligible for government premium tax credits to insurers to subsidize health insurance enrollment, but subsidies for even one employee trigger what the lawsuit says are "costly obligations" on employers, "placing the electing state at a competitive disadvantage for jobs and job growth."

The lawsuit alleges the law is unconstitutional because it gives the government control over state legislative and executive power, exceeds Congress' authority and infringes on state sovereignty.

Fallin names Jones to vacant judgeship

OKLAHOMA CITY (AP) - Gov. Mary Fallin has appointed Edmond attorney Bernard Jones to a vacant district judge's seat in Oklahoma County.

Jones will replace former District Judge Tammy Bass-LeSure, who resigned before pleading guilty in March to two counts of fraud. Prosecutors alleged that she claimed foster payments and adoption assistance for children who didn't live with her. Bass-LeSure received a three-year deferred sentence.

The 33-year-old Jones previously served as associate dean for admissions and external affairs at the Oklahoma City University School of Law. Prior to joining OCU, he was an associate at the Oklahoma City law firm of McAfee & Taft, where he focused on labor and employment issues. He also served as an associate at Porter Wright Morris and Arthur, a law firm in Ohio.

Have a good week.  Give me a call at 918.671.6860 if I can be of help in any way

                  Steve Lewis

 
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AG Amends Lawsuit
Fallin Fills Judgeship