Offering similar criticisms of the Republican-led Legislature’s budget process that Democrats have griped about all year, Oklahoma Gov. Kevin Stitt said today that he will veto a bill increasing funds for private prison companies, veto bills providing one-time tax rebates to citizens and will call lawmakers into a special session June 13 for the purposes of “real relief.”
Standing next to a poster showing how inflation across the nation has increased the cost of foodstuffs, Stitt said he wants the Legislature to reduce or eliminate the state portion of the sales tax on groceries and reduce the personal income tax rate by 0.25 percent, as also happened last year.
Stitt requested both of those tax reductions in his Feb. 7 State of the State address.
“What did Oklahomans get instead? $75 inflation checks that won’t be sent out until December,” Stitt said. “And, by the way, it’s federally taxed, so you don’t even get to keep the full amount. Instead, Oklahomans will be forced to send $19 back. (…) I never expected Republicans to take a page out of Joe Biden’s playbook and waste $181 million sending government checks out.”
Stitt criticized House and Senate budget leaders for mostly leaving his designated negotiators out of the room while they determined their $9.84 billion in appropriations for next fiscal year. Stitt’s team was only welcomed into budget negotiations May 10, one week before the budget was revealed. Last year, by comparison, the governor’s team entered the room April 21, his staff said.
“Let me be clear, this budget is not — was not — an agreement. Agreement requires negotiation, requires consensus. Negotiations did not happen in this year’s budget,” Stitt said. “I received, as the governor of the state of Oklahoma, the final budget for the first time on May 16 at 8:45 p.m., just hours after it was made public. I wasn’t the only one left out. The people of Oklahoma were left in the dark.”
Stitt said “parts of this budget make sense for Oklahomans,” such as pay raises for public safety employees and a nearly $700 million fund designated for recruiting a multinational company to build a battery plant at the MidAmerica Industrial Park.
But other parts, he said, “are the result of back-room deals between lobbyists and the Legislature.”
The budget-related bills Stitt ultimately vetoed all or some of are:
- HB 4473, which directs more than $181 million to the Inflation Relief Stimulus Fund;
- HB 4474, which specifies the use of funds from the Inflation Relief Stimulus Fund to include one-time direct payments of $75 to Oklahoma taxpayers filing as single and $150 to taxpayers filing as married;
- SB 1052, which directs the Oklahoma Department of Corrections to dedicate $4.89 million to the privately operated Lawton Correctional and Rehabilitation Facility for a per diem increase. It also directs $2.92 million to the privately operated Davis Correctional Facility for the same purpose;
- SB 1075, which eliminates a 1.25 percent excise tax on the purchase of motor vehicles that had been created by the Legislature in 2018.
Stitt said his team spent days looking through the budget bills line by line.
“We kept asking the question: ‘How did this get in there?’ ‘How did this get in there?'” Stitt said. “It’s long overdue, but we need to have a real conversation as leaders in this state and as Oklahomans of how this budget process happens. (…) Why are only a select few in charge while the rest of us are expected to nod our heads and not even ask questions?”
‘Apparently I’m never going to leave’
House Minority Leader Emily Virgin (D-Norman) has been asking questions about the Legislature’s annual budget process for more than a decade.
“We’re glad that the governor is agreeing with us on the policies that we have been calling for for a couple years now,” Virgin said. “Number one, of course, is transparency in the state budget process. We haven’t heard the governor calling for that in the past. I think the change is that he, himself, was left out of the process this year, and he is feeling the same way that my caucus and the vast majority of the Republican Caucus feels, which is that they were given the budget and were expected to vote yes or no on it in a matter of days.”
Virgin and her House Democratic Caucus — population 18 — have advocated for eliminating the state portion of sales tax on groceries for the last two sessions. Stitt pitched the same in his State of the State address, but Republican budget leaders ended up not signing off on the idea this year, instead shucking the two bills on the topic and filling them with measures limiting Stitt’s influence over how American Rescue Plan Act money will be distributed and calling themselves into concurrent special session to deal with ARPA dollars.
With Stitt calling for a special session of his own to begin June 13, lawmakers who have hit their term limit or who simply decided not to run for reelection face a sour summer.
“I thought I was terming out this year, but apparently I’m never going to leave,” Virgin said. “It is pretty clear right now that the governor and Republican legislators are on different pages. So I’m not sure if the governor expects for anything to actually happen in this special session he is calling because he’s calling for things that Republican legislators rejected.”
Virgin said House Democrats debated and largely voted against the measures Stitt said he would veto, so House Republican leaders will need to bring 67 of their own votes Friday to override the governor. Although 82 Republicans serve in the House, finding 67 members to stand functionally against Stitt’s request for more tax relief could be challenging. For instance, 72 House Republicans voted for the private prison funding increases in SB 1052, but Stitt’s veto casts the proposal in a new light, and some lawmakers could have already departed on travels to start their Memorial Day weekend.
“I think it would be safe to say that we would sustain his vetoes on those, but we have not had a caucus meeting on that,” Virgin said of House Democrats. “So we will have to see exactly what Republicans have planned for tomorrow.”
It was not immediately clear exactly what Republican legislative leaders have planned for Friday, their constitutional deadline to adjourn regular session. But House Speaker Charles McCall offered a brief statement criticizing Stitt’s claims.
“The House will respond to the governor’s many inaccurate and misleading statements in due course,” said McCall (R-Atoka).
Speaking on the condition of anonymity, another GOP lawmaker told NonDoc that he expected a full day Friday.
“We’re going to go in and override some vetoes,” the Republican legislator said. “I don’t have the full list yet, but I guarantee you the list just became a lot longer after today’s shenanigans.”
Whether the votes are there for overriding the budget vetoes, however, could come down to the wire.
“I don’t think it’s a certainty,” said Rep. Forrest Bennett (D-OKC). “I think it puts some of my colleagues in a tough position, whether to go with their caucus or side with the governor. It will be interesting to see.”
Bennett said the elimination of the state sales tax on groceries had been popular with some House Republicans, and income tax cuts typically ring Pavlov’s bell.
“Maybe there are some folks who have some buyers remorse for supporting the $75 (tax rebate) and will appreciate getting a second chance?” Bennett said. “A lot of these people have primaries, and between now and June 13 they are going to be hearing form their constituencies at home.”
Bennett said that’s a factor that doesn’t come into play when lawmakers reveal their budget bills at the last minute and then rush them through in one week.
Stitt vetoes: A 2020 session redux?
If the budget battle between Stitt and Republican legislative leaders feels familiar, you might be thinking of the 2020 legislative session, when Stitt vetoed the general appropriations bill because he wanted greater savings and cuts to agencies as the pandemic raged and caused economic uncertainty.
That year, Stitt’s budget vetoes were widely expected, and members of House Republican leadership were giddy at the opportunity to override him and cram their budget down the governor’s gullet.
This year, State Capitol hallways were quiet in the hours following Stitt’s press conference.
Americans for Prosperity, a national group that routinely advocates for lower taxes, smaller government and criminal justice reform, released a statement from its Oklahoma director.
“While the Oklahoma economy is stronger than the national economy, the Biden-Harris administration’s inflation policies are killing opportunity,” said John Tidwell. “Oklahoma families are having a hard time making ends meet and one-time, California-style rebates are not the answer. People deserve lasting relief in the form of permanent income tax cuts for individuals and families.”
State Chamber of Oklahoma CEO Chad Warmington similarly supported Stitt’s decisions in a statement.
“The governor’s veto of HB 4474 is an acknowledgement that this is the wrong policy at the wrong time. It doesn’t address the root causes of inflation plaguing the economy and is identical to the federal policies that created overheated demand and supply shortages,” Warmington said. “What is needed in Oklahoma is meaningful, pro-growth tax policies that stimulate capital investment and business expansion and address the supply crisis. We encourage the legislature to take the opportunity of special session to enact bills that would squarely address the real problem facing our economy and utilize the state’s surplus revenue to give everyday Oklahomans long-term tax relief.”
(Update: This article was updated at 9:40 a.m. Friday, May 27, to include additional information about the bills vetoed by the governor.)