Lawmakers have Oklahoma’s individual income tax in their crosshairs heading into the next legislative session.
But the personal income tax makes up about one-third of the state’s revenue. So, if efforts to reduce or eliminate the tax are successful — the state might need another source of funding.
Gov. Mary Fallin’s Task Force on Comprehensive Tax Reform suggested a state-run property tax as a possible replacement for the lost income tax collections.
As we’ve reported, that’s just not an option in Oklahoma. Our hatred of property taxes has its roots in the Great Depression and the administration of Gov. ‘Alfalfa’ Bill Murray.
Murray, a Democrat, had populist economic ideas that mirror some of today’s Tea Party movement.
“We…have the right of liberty, the right of self-government, the right to pursue own own business,” Murray said in an undated radio interview. “These are the fundamental rights of an American citizen.”
Murray hated the state property tax. When the wider depression and collapse of oil prices drained the other main sources of revenue to the state, the property tax was adjusted to balance the budget. This caused chaos, with citizens simply unable to pay.
“I went through the old Equalization Board reporters and was flabbergasted to see how dramatic those numbers changed,” said former State Finance Director Alexander Holmes, who chairs the Economics Department at the University of Oklahoma. “Your property tax might triple from one year to the next. Then it might drop in half. Then it might double again. The ability to plan to meet your property tax obligation for the landholder was practically zero. The poor earth isn’t growing anything and your property tax is doubling.”
‘Alfalfa’ Bill Murray led the effort to abolish the statewide property tax, and a 1933 amendment to the Oklahoma Constitution did just that.