Q&A: What You Need to Know About Challenge to Tax Rollback Petition

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The Oklahoma Supreme Court heard arguments Monday on a pair of lawsuits to stop an effort to repeal tax increases that helped pay for the historic teacher pay package.

At stake is whether Oklahoma Taxpayers Unite!, a group led by former U.S. Sen. Tom Coburn, can continue collecting signatures to ask voters to nullify the nearly $450 million revenue-raising bill passed by the Legislature earlier this year.

The court’s eventual ruling could have deep ramifications for the state’s finances and potentially determine whether there will be money to pay teachers, support staff and state employees more.

But confusion and uncertainty have marked the incipient tax-repeal referendum. Here are the answers to some of those questions.

What is being challenged?

Professional Oklahoma Educators, the Oklahoma Education Association and other educated-related organizations are asking the court to invalidate the Oklahoma Taxpayers Unite! petition.

That would stymie the anti-tax group’s push to overturn this spring’s tax increases on cigarettes, motor fuel and oil and gas production.

The two legal challenges center on whether the language in the petition is misleading or vague because it doesn’t mention the impact on state revenues or the teacher raises should the repeal efforts succeed.

The Professional Oklahoma Educators also claim the initiative is a threat to the “preservation of the public peace, health and safety” because it would affect public schools.

The educators’ other arguments are more technical. They say the anti-tax group’s failure to include a copy of the legislation with the petition and the absence of language explaining all tax increases that would be repealed should doom the petition.

What happens if the court rejects the educators’ challenge?

The petition drive will continue. Oklahoma Taxpayers Unite! has until July 18 to collect about 42,000 signatures of registered voters.

If the secretary of state certifies that the number of signatures is sufficient – and there are no challenges to that or the ballot title – it would be put on November’s ballot unless a special election is called.

In the meantime, the tax increases that are set to take effect July 1 would be put on hold once the petition and the proper number of signatures is filed and accepted.

What would happen to the raises?

There is less certainty regarding the raises if the tax increases are temporarily or permanently stopped.

The pay raise bills included language saying they would only take effect if the tax package is “enacted.”

But there are questions about whether “enacted” means when they are signed into law or when the taxes take effect.

Barrett Bowers, an attorney representing Oklahoma Taxpayers Unite!, argued during Monday’s hearing that the bills were enacted when Gov. Mary Fallin signed them. He said the teacher raises will go into effect regardless of whether voters approve the repeal petition.

When justices asked how the raises would be funded should the tax increases be frozen or repealed, Bowers said the state has been running a surplus during the past several months and the revenue would cover it.

Justices and anti-repeal attorneys repeatedly questioned whether the tax package and the raises are directly linked.

Blake Sonne, representing the Professional Oklahoma Educators, said school districts haven’t been given a clear indication whether the teacher raises would be suspended or what districts would do if they must honor the raises but lack the money to do so.

“That would be a constitutional crisis,” he said.

Justice Yvonne Kauger suggested another option: Lawmakers could go into special session and find the money for the raises.

“Isn’t this a legislative problem?” she asked. “If teachers get the money, the Legislature has to figure out how to pay them.”

Sonne also noted that the attorney general has yet to respond to State Superintendent of Public Instruction Joy Hofmeister’s request for him to submit a formal opinion on the subject.

Justice Patrick Wyrick, however, indicated that the court might decide the issue when it rules on the initiative challenge.

What happens if the court invalidates the anti-tax petition?

Oklahoma Taxpayers Unite! could theoretically create a new petition that would pass the court’s muster. But the group would have to restart the process of submitting paperwork and collecting signatures.

The state Constitution requires signatures to be collected within 90 days of the end of the legislative session, so the group would have five weeks to meet the goal.

If they fail to do that, the tax increase will take effect July 1 and the teacher raises will take effect for the upcoming school year.

What does the repeal effort mean for the teacher shortage?

Teacher morale was already low following several unsuccessful attempts to raise revenue for teacher salaries, which in 2017 were 49th lowest in the country, according to the National Education Association. If the repeal effort is successful, and as a result raises don’t materialize or school funding is cut, the state’s teacher shortage will likely intensify.

Districts already are struggling to fill teaching vacancies: recruiters report little or no qualified candidates for job postings and schools employed a record number of emergency certified teachers in 2017-18. Survey results from January show the top reason Oklahoma teachers leave the classroom is low pay.

“Pay alone will not solve the teacher shortage … but we are not in the ballgame in any way if we are not offering our teachers competitive pay,” Hofmeister said in January.

How are school districts handling the uncertainty of the pay raises while trying to hire teachers?

Oklahoma Taxpayers Unite! argues the money for the raises will be available even if the $420 million tax package is repealed. They point out revenue collections for May 2018 increased 14 percent compared to May 2017, according to the state Treasurer’s Office. But school districts in the process of hiring teachers for next school year are struggling with uncertainty. Are districts obligated to pay the higher salaries, even if the tax package (and the revenue it provides) is repealed? That could actually lead schools to lay off staff to pay others at the higher rate. School districts across the state are awaiting the court’s decision to decide how to proceed.

Have teacher strikes led to ballot initiatives elsewhere?

Arizona teachers are circulating a petition for a ballot initiative to increase income taxes on wealthy residents, which is expected to generate about $690 million for teacher pay, and school maintenance and operations. Arizona’s week-long teacher walkout ended after the governor approved a 19 percent pay raise, but some teachers say it wasn’t sufficient to address schools’ needs.