by MICHEAL MCNUTT

Published April 4, 2010

Ideas suggested by the governor to generate more money for the state so far haven’t been met with enthusiasm.

Gov. Brad Henryhas proposed about $725 million in revenue enhancements, which include refinancing bond issues at today’s lower rate, possibly saving tens of millions of dollars; eliminating and suspending tax credits; and taxing more Internet sales made in Oklahoma.

 House Speaker Chris Benge, R-Tulsa, has said the Internet tax proposal is a tax increase.

Henry suggested a system to collect sales taxes on Internet sales not currently being collected. Out-of-state businesses without a store or building in the state are not collecting sales taxes on sales made over the Internet, telephone or via mail order. It’s estimated the state is losing about $95 million annually without those sales tax collections.

David Blatt, director of the Oklahoma Policy Institute, a state think tank, said it is a collection issue.

"Taxes are already owed on purchases made by remote sellers, whether it’s Internet or catalog,” he said. "This does not qualify as a revenue bill. Not every measure or bill that increases revenue is automatically a tax bill.”

The governor’s other ideas haven’t been met favorably, either. He called for expanding the state’s insurance verification program to include out-of-state drivers, which could generate an additional $95 million in the 2011 fiscal year. The Public Safety Department is reviewing programs, which could include law enforcement officers checking a national database instead of a proposal that would call for installing as many as 200 cameras on highways across the state that would record motorists’ tags; the tags would be checked later with a national database.

Henry also called for eliminating the Rural Economic Action Plan, which would result in a savings of about $13 million. But rural legislators, who successfully fought last year to get the program included in this fiscal year’s budget, said they would oppose efforts to eliminate the program.

The governor also proposed consolidating some of the state’s 180 agencies at a savings of about $5.3 million. Not much has happened with that; merging agencies is a tough sell.

A Senate committee last week killed Benge’s proposal calling for voters to decide whether to merge the Pardon and Parole Board with the Corrections Department.

Benge also filed a bill that would serve as the vehicle for several consolidations; it’s empty after the Liquified Petroleum Gas Board and the Liquefied Petroleum Gas Research, Marketing and Safety Commissionsuccessfully opposed being made a part of the Oklahoma Corporation Commission.

An idea being bandied about recently is delaying one of the last components of the 2006 tax-cut package – increasing the Oklahoma income tax standard deduction to the level of the federal standard deduction. It takes effect for the 2010 tax year, so taxpayers next year would see the increased deduction.

Tax forms won’t be printed until this summer. Lawmakers could pass legislation that would postpone reaching the federal level until the state’s economy improves.

The state could save about $76.4 million by delaying the standard deduction increase, a spokeswoman for the Oklahoma Tax Commission said. About 73 percent of Oklahomans, or 1.29 million of 1.77 million taxpayers, use the standard deduction.

One idea suggested by the governor that does have support from legislators is a one-year moratorium on selected tax credits and eliminating a controversial rural small business credit. A one-year moratorium on selected tax credits would save about $45 million. Repealing the rural small business capital credit and the small business capital credit programs could save the state nearly $50 million.

Blatt said it’s time to review the state’s many tax credits.

"Some in particular have had runaway expenses,” he said. "Credits that were initially a few million dollars are now up to $40 million or over $100 million. There have been fairly widespread and plausible charges of questionable practices that have been pursued and some of these credits really should be suspended while there’s a chance to study them further ... or done away with entirely.”