Claremore Daily Progress

July 9, 2013

Attorney maintains tax cut bill unconstitutional

Sean Murphy
Associated Press

OKLAHOMA CITY —

A bill celebrated by Republican leaders that slashes Oklahoma’s personal income tax rate and funds repairs to the crumbling Capitol building is unconstitutional and should be thrown out, an Oklahoma City attorney argued on Tuesday.

Attorney Jerry Fent, who has a long track record of successfully challenging legislative actions, argued before a Supreme Court referee that the bill is an example of “logrolling” because it violates a provision of the Oklahoma Constitution that requires acts of the Legislature to embrace only one subject.

“The first part of the title is substantive law — reducing your income tax liability,” Fent told Supreme Court Referee Greg Albert. “The second section of the title is creating a fund and providing for an appropriation.

“Here we have two subject matters as quickly as you can use your eyes to look at the title.”

An attorney for the state, Assistant Attorney General Dan Weitman, maintained the bill is constitutional because the revenue to pay for the Capitol improvements comes from income tax collections, and therefore the measure deals entirely with managing taxes.

“This is not a bill that lowers taxes and then separately appropriates money to an unrelated project. Had it done that, it might violate single subject,” Weitman argued. “Instead, the bill lowers taxes over time and it states how the money is to be divided up in the interim. Clearly this bill is a single subject. It’s all related to one purpose, and that is managing taxes.”

Fent argued the bill also is unconstitutional because it appropriates revenue to fund the Capitol over two separate fiscal years and that it wasn’t approved with a three-fourths vote in the House and Senate required for revenue measures. Fent acknowledged, however, those were “backup arguments” and that his main cause of action — the logrolling allegation — was a “slam dunk.”

Besides cutting the state’s top personal income tax rate from 5.25 percent to 5 percent, beginning in 2015, House Bill 2032 also diverts $120 million in income tax collections over the next two fiscal years to pay for improvements to the state Capitol. The bill was authored by House Speaker T.W. Shannon, R-Lawton, and Senate President Pro Tem Brian Bingman, R-Sapulpa, and was part of a three-way agreement between the House, Senate and Gov. Mary Fallin, who has long championed a reduction in the state income tax.

A major overhaul of the nearly 100-year-old Capitol, including upgrades to the electrical and plumbing systems, also has been a priority of Fallin and legislative leaders. Yellow barricades have been erected in front of the 400,000-square-foot building to prevent pedestrians from approaching the south side of the Capitol, where large chunks of limestone have fallen from the building’s facade.

Fent, who has successfully challenged the Legislature before, said he doesn’t argue that that the Capitol doesn’t need to be improved, he just questioned the way in which lawmakers chose to do it.

“It’s probably a very worthwhile cause to get some money to fix the Capitol building,” Fent said after Tuesday’s hearing. “However, they need to do it constitutionally.”

Albert, a referee for the state’s highest court, will synthesize the arguments of both sides into a secret report that is presented to the nine-member Oklahoma Supreme Court, along with the court filings in the case. The court can then issue a ruling based solely on the filings and Albert’s report or choose to hear arguments itself before making a ruling.

If the court strikes down the bill, the practical effect would be to delay or derail major renovations of the state Capitol. Because the income tax reduction is not scheduled to take effect until 2015, with a separate cut planned for 2016 if certain revenue triggers are met, the Republican-controlled Legislature would simply have to pass another income tax cut bill when the session begins in February.

Funding the estimated $120 million or more needed to overhaul the Capitol could be a more politically thorny issue, since Shannon and the increasingly conservative House have been resistant to the idea of issuing bonds, even to pay for infrastructure improvements.