OKLAHOMA CITY (AP) — As state leaders look for ways to raise revenue to help close an estimated $868 million hole in next year's budget, they should consider broadening Oklahoma's sales tax base to include some services, like tattoos and car washes, that are currently exempt, Gov. Mary Fallin said Wednesday.
The Republican governor said modernizing Oklahoma's tax code to reflect a more service-based economy is one of several ways she hopes to ease cuts to state agencies, many of which have endured deep cuts over the last three years.
"Once again this session we'll put some ideas on the table and try to get our Legislature to see the different funding needs we have in our state," Fallin said.
She specifically mentioned the Oklahoma Highway Patrol limiting the number of miles troopers can drive, overcrowded prisons, overloaded child welfare workers and school teachers leaving the state because of low pay.
"There is a point you reach that you do harm to the services that we provide to our citizens," she said.
The governor made the comments after the State Board of Equalization met to certify that the Legislature will have about $6 billion to spend on the fiscal year that begins July 1. Fallin will use that figure to create her executive budget that will be released to lawmakers when the legislative session begins in February.
A final revenue estimate will be certified in February.
Fallin and her chief budget negotiator, Preston Doerflinger, have been urging lawmakers for years to consider limiting the amount of non-recurring revenues, like agency revolving accounts and the state's Rainy Day Fund, they use to fund state government.
In her last executive budget, Fallin suggested lawmakers could generate about $200 million by eliminating some of the estimated $8 billion in current sales tax exemptions in the tax code.
"We have about 150 different items that we exempt from sales tax, and when you compare that number to other states, like Texas, Kansas and surrounding states, we exempt a lot of things, like car washes, tattoos, pet grooming, sports tickets," Fallin said. "They don't pay sales taxes on those things, and thus we lose revenue."
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