A proposal to eliminate the state income tax would likely produce higher property taxes, and that won't make Oklahomans happy, three economic professors said Wednesday.
“We hate property taxes in this state,” said Robert Dauffenbach, director of the Center for Economic and Managerial Research at the University of Oklahoma.
Dauffenbach, along with Oklahoma City University's Russell Evans and Mickey Hepner of the University of Central Oklahoma, discussed economic matters during a forum hosted by the Greater Oklahoma City Chamber of Commerce.
Dauffenbach noted that $3 of every $8 in state revenue comes from income taxes.
“Pardon the facts, but I don't really see how we can get from here to there,” he said.
Gov. Mary Fallin's Task Force on Economic Development and Job Creation called for the elimination of the state income tax over the next decade. Several state lawmakers also support elimination of the income tax, with many claiming it would spur economic development.
Texas, which is among nine states that do not levy a personal income tax, has been held up as a model for some who favor elimination of the state sales tax.
Hepner, dean of UCO's college of business administration, said over the past decade, Oklahoma's economy, per capita income and median household income have grown faster than those measures in Texas and most states that levy no income tax.
“I don't know about you, but to me that says instead of us trying to be more like them, maybe they should be a little bit more like us,” Hepner said.
The Texas tax model also places a greater burden on middle-income and low-income taxpayers than among the very wealthiest residents, Hepner said.
“That's the Texas model that we would be moving towards,” he said. “On the issue of fairness, I would find that objectionable.”
Evans, executive director of OCU's Steven C. Agee Economic Research and Policy Institute, said the different methods states use to fund government could offer economic development opportunities by allowing corporate leaders to “choose which one best serves their industry.”
Evans said the issue needs a statewide discussion of priorities for government spending before determining how to proceed with tax reform.
“I think often when we talk about tax reform, it's code for tax cuts, which is not really fiscal reform,” Evans said. “I think it looks at one angle without really looking at the big picture.”
Oklahomans bear a lesser tax burden than their counterparts in most other states, Evans said.
The economics professors also discussed the large role that energy plays in Oklahoma's relatively strong economy, how much private investment the MAPS 3 project might draw to Oklahoma City and the concerns they hold about long-term federal government entitlement spending obligations.