In Oklahoma, GOP Lawmakers Support Tax Increases To Solve Budget Crisis

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State revenues in Oklahoma have fallen short three years in a row. Business owners and the wider public are angry about it, and it's created problems for the Republican-led political establishment there. To solve the crisis, GOP lawmakers are now publicly backing what they have long opposed - tax increases. Joe Wertz from StateImpact Oklahoma reports.

JOE WERTZ, BYLINE: It's a soggy, sticky morning in Stillwater, Okla. Men and women in muddy cowboy boots are perched in folding chairs and leaning against towering pallets of seed to hear the latest on soil health and nitrogen management.

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UNIDENTIFIED MAN: It saves money. It saves fertility.

WERTZ: Presentations are part of Oklahoma State University's agricultural extension program which connects farmers and ranchers with the latest science on things like crops, livestock and seed varieties. James Trapp directs the program. These days, he says it's a struggle.

JAMES TRAPP: Over the last five to six years, our budget is down over 25 percent.

WERTZ: Years of Republican-led tax cuts have taken a big bite out of Oklahoma's budget. The recent downturn in crude prices has also starved revenue streams that power this oil-rich state. Now Oklahoma is struggling. Road and highway projects have been delayed. State troopers had their mileage limited. And many schools are open only four days a week. This year, the state faced a nearly $900-million budget gap. Educators, business leaders and public demonstrators flocked to the Capitol and rallied against funding cuts.

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UNIDENTIFIED WOMAN: Shame on you.

UNIDENTIFIED CROWD: Shame.

WERTZ: Some of the Republicans who control Oklahoma's capitol responded to the outcry by supporting tax hikes which conservatives here have long campaigned against. This turnabout is telling. Here's Governor Mary Fallin giving the annual State of the State address shortly after her election in 2011.

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MARY FALLIN: Now, our first priority will be to balance the state budget without raising taxes.

WERTZ: The situation has changed dramatically. This year, Fallin, a Republican, threatened to veto any budget without tax increases. Lawmakers heeded her call, and Republicans approved tax and fee hikes on vehicles, sports tickets and cigarettes. They also repealed a pending income tax cut and effectively raised taxes on oil and gas production.

RICHARD AUXIER: I don't think the tax-cut ideology or the desire for tax cuts has changed, but the budget math has.

WERTZ: Richard Auxier is a researcher at the nonpartisan Tax Policy Center.

AUXIER: But in Oklahoma and other states, the tax cuts have not paid for themselves.

WERTZ: In Kansas, a GOP-dominated legislature overrode a veto by Republican governor Sam Brownback to cancel steep tax cuts and raise a billion dollars. Louisiana legislators are meeting in a special session to continue fiery debate on increasing taxes or backing agency funding cuts. Auxier says state tax cuts are a tough sell when key institutions like schools are suffering. But tax hikes are still a no-go for many in the party.

AUXIER: It's not an easy vote. I mean Kansas, you know, voted, right - it took them three times to get enough votes to override the governor's veto.

WERTZ: Support among some Republicans for tax increases has created rifts in conservative circles in many red states.

TOM GANN: Hey, let me know when those air flag guys get here.

WERTZ: Oklahoma state representative Tom Gann recalled a dinner he had with constituents during the turbulent legislative session.

GANN: At the end, I just said, I just want to remind you guys that you elected me to come down here and not expand government and not to raise your taxes. And they broke out in spontaneous applause.

WERTZ: In the end, Republican leaders did send a $6.8 billion spending plan to Oklahoma's governor. It included some of the tax increases she called for, and she signed it. For NPR News, I'm Joe Wertz in Oklahoma City.

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