The state raked in nearly $600 million from fees, licenses and permits last fiscal year — an eye-popping 48 percent increase over the amount taken in just one year earlier.
The $194 million increase outpaces the $136 million a year that tax officials have projected taxpayers will save if the House-approved one-quarter percent cut in the state's highest income tax rate is implemented.
Conservative Oklahomans have groused for years that fees have proliferated and soared in the state since 1992 when voters curbed the Legislature's ability to raise taxes by passing a constitutional amendment. The amendment requires a statewide vote on all state tax increases unless lawmakers can get approval from three-fourths of both houses of the Legislature.
Faced with a roadblock to tax increases, the Legislature and agencies often have turned to fees for more income.
Reports produced by the state Office of Management and Enterprise Services show state revenues from fees, permits and licenses increased from $403.4 million in Fiscal Year 2011 to $597.5 million in Fiscal Year 2012.
Such revenue has more than doubled in 10 years. It stood at $243.8 million as recently as Fiscal Year 2002.
“That's a big issue,” said state Rep. Mike Reynolds, R-Oklahoma City. “I'll give you a big example of where fees are out of control, and that's the secretary of state's office.”
Reynolds said this year's general appropriation's bill is taking $2 million from the secretary of state's office, which makes money off filing fees and by charging people to examine and obtain copies of public records. Similar fee transfers from that office have occurred in past years, as well.
“A fee is supposed to be for a service provided,” Reynolds said. “If you've got $2 million extra, you are sure overcharging.”
Tracking is difficult
Identifying each new fee and fee hike that has contributed to increased state income from fees, licenses and permits would be a monumental task.
The Oklahoman checked with the Office of Management and Enterprise Services, Senate staff, Oklahoma Tax Commission and Legislative Services Bureau but was unable to identify anybody in state government with a comprehensive list of such hikes.
The state doesn't even have a statewide comprehensive fee schedule, but budget officials would like to have one, said John Estus, spokesman for the Office of Management and Enterprise Services.
The office has data that show how much fee income comes in each year, but can't tell from the data whether the increased income is the result of a new fee, fee hike or more people using a particular service, he said. More information would make financial planning easier, he said.
Last fiscal year's 48 percent increase in state fee, license and permit revenue appears to be largely attributable to some financial gimmickry by the Oklahoma Legislature working in concert with state hospitals.
Records show that more than three-fourths — or about $153.7 million — of the $194 million increase came from a hospital provider fees approved by the Legislature in 2011.
Oklahoma is required to provide matching funds to obtain certain federal Medicaid reimbursement payments for hospital care. Rather than pay money from the state's general fund, the state worked out an arrangement where some hospitals in the state pay hospital provider fees.
Those fees are used to attract federal matching funds, and then both the fees, and matching funds essentially are returned to the hospitals to pay for treatment of Medicaid patients.
Fiscal analysts told lawmakers the provider fees were expected to attract about $269 million in federal matching dollars. The arrangement saves the state budget money, but taxpayers still end up paying through federal taxes.
Sometimes fee hikes have been controversial — such as when the Consumer Credit Department hiked the fees and fines it charges lenders it regulates so it would no longer have to rely on state-appropriated funds. The department then handed out nearly $100,000 in raises in a single year that were distributed among at least six employees.
Another effort to increase fees is pending before the governor.
The state Senate sent Gov. Mary Fallin a bill last week that would raise the fee for obtaining or renewing a four-year driver's license by $12, bringing the total cost to $33.50.
The fee increase is projected to produce an additional $8.7 million a year. Officials say that would enable the Public Safety Department to hire more people so that long lines for driver's license examinations could be reduced.