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State fee increases offset Oklahoma income tax cut

A 48 percent increase in money the state raked in from fees, licenses and permits last fiscal year far exceeds the savings tax officials say Oklahomans can expect to receive from a legislatively approved one-quarter percent cut in the state's highest income tax rate.
by Randy Ellis Published: May 13, 2013

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.

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by Randy Ellis
Investigative Reporter
For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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