Thousands of state employees are behind in their income taxes and risk disciplinary actions or termination if they don’t resolve the matter, according to data compiled by the Oklahoma Tax Commission.
A total of 5,599 employees received a final notice of noncompliance this year, an increase of 26 percent from 2018.
State employees behind in their taxes are notified three times in a year by the Tax Commission to work out plans before their cases are referred to managers at their agencies for disciplinary procedures. Receiving a final notice a third time is an automatic termination under a law passed in 2003.
The Oklahoma Public Employees Association, however, believes the law should be changed.
“If you’re a private citizen and you don’t pay taxes, they don’t fire you from your job. They garnish your check,” said Sterling Zearley, executive director.
The final letter advises employees to file their taxes, pay any balances due or establish a payment plan with the commission.
“As a state employee, you are required to be in compliance with the income tax laws of Oklahoma,” the letter states. “Failure to be in compliance will subject you to disciplinary action by your employer.”
The agencies with the largest numbers of employees generally have the most people on the final noncompliance list of letters sent by the commission in March each year. They include the University of Oklahoma, Department of Human Services, Department of Corrections, Oklahoma State University and the OU Health Sciences Center. Those five agencies accounted for almost half of the final letters sent in 2019.
Some agencies, like the Tax Commission, had no employees on the final list in 2019 or 2017, although it had 15 employees show up in 2018.
“We’re really strict on it,” said Paula Ross, Tax Commission spokeswoman. “People know as part of the job that they have to comply with their taxes.”
Gov. Kevin Stitt, who has new authority over several of the largest state agencies, said the commission gives ample notification to state employees to come into compliance.
State Workers Notified of Unpaid TaxesThe number of state employees notified of tax non-compliance at each agency in 2019 tended to reflect the size of the agency. However, percentages could vary widely. The following is a sampling of agencies; data on total employees was not immediately available from colleges and universities.
|Agency||Employees Notified of Unpaid Taxes||Total Agency Employees||Percent|
|Department of Human Services||604||5,722||10.6%|
|Department of Corrections||546||4,180||13.1%|
|Department of Veterans Affairs||222||1,578||14.1%|
|Mental Health and Substance Abuse Services||218||1,572||13.9%|
|Department of Transportation||129||2,343||5.5%|
|Tourism and Recreation Department||120||403||29.8%|
|Office of Juvenile Affairs||96||641||15.0%|
|District Attorneys Council||67||955||7.0%|
|Oklahoma Military Department||67||322||20.8%|
|Department of Rehabilitation Services||58||849||6.8%|
|Department of Health||56||1,522||3.7%|
|Management and Enterprise Services||41||1,173||3.5%|
|Health Care Authority||36||516||7.0%|
|Source: Oklahoma Tax Commission.|
“Oklahoma taxpayers’ hard-earned money provides for our state’s public services and the jobs that deliver those services, and it is important we ensure state employees are in compliance with the law,” said Baylee Lakey, Stitt’s communications director.
Ross said the notification process gives state employees time to work out their tax issues. The agency sees a drop of about 40 percent between when employees are first notified in August and the final notices sent in March.
For example, 9,717 letters were sent in August 2018; that fell to 5,599 by the time of the final notice in March, Ross said.
The Oklahoma Public Employees Association said the noncompliance process is too strict and state employees should be treated like their counterparts in the private sector. The association is working with lawmakers to change the process and expects legislation will be filed in the upcoming session, said Zearley, who heads the group.
“We’ve had several employees we’ve assisted where either the Tax Commission made a mistake or they weren’t notified, and the next thing they know, they’re getting a notice of discharge,” Zearley said. “We understand they should pay their taxes; they owe it. But why would you terminate them? Why not garnish their checks if they don’t set up a payment plan?”
OSU gets the list each February – 2019’s list had 483 names – and runs it against its data to see who still is employed by the university. The list indicates the number of years the employee has been noncompliant.
“We focus on those who have three or more occurrences,” said Christa Louthan, OSU’s assistant vice president and chief human resources officer. This year 86 people fell into that category.
The university sends letters giving the employees 90 days to show they are compliant. A second letter is sent at 60 days and copied to the vice president of the employee’s department. That one gets the most response, Louthan said. “They really don’t like that.” At 30 days, they get the final letter warning them they face termination.
“I can’t find anybody we terminated for this, but several have left or decided to retire,” Louthan said. “We have everything from people who this is their first job ever to tenured faculty members.”
At DHS, three employees have been fired since 2017 for failure to pay their state income taxes, said spokeswoman Debra Martin. More than 600 DHS employees, or about 11% of its workforce, were notified they were out of compliance this year.
“We work very hard to help our employees address underlying issues which can make it difficult for them to stay current on their taxes,” Martin said. “Termination is a last resort.”
The Department of Corrections said its disciplinary process on taxes is among the policies employees are expected to follow. It hasn’t terminated anyone in the last three years for tax noncompliance, said spokesman Matt Elliott. About 13 percent of the department’s workers got noncompliance notices from the Tax Commission in 2019.
Contributing to this story: Kathryn McNutt.
Reach reporter Paul Monies at email@example.com.