Lawmakers are discussing tax relief while ambulance providers struggle to pay for the services residents already need.
By Tim Allen, Managing Editor
Lonnie Paxton and Mike Mazzei have already begun talking about property taxes. If Mazzei wins the governor’s race next month, those conversations could become the starting point for negotiations between the next governor and the Legislature.
As we reported Tuesday, Paxton, the Senate president pro tempore, said the talks have covered Mazzei’s plan to eliminate homestead property taxes for seniors and veterans, including how it could get done and how long it might take. He has not committed the Senate to the proposal.
That leaves plenty to negotiate. Two recent House interim studies help explain why.
One examined ambulance services that depend partly on property taxes and already struggle to keep up with demand. The other considered taxing digital subscriptions and quickly reached the question of whether lawmakers could agree to collect money somewhere else while cutting taxes.
Together, they show a familiar conundrum. No one wants to pay taxes, but they still want the services those taxes fund.
The ambulance still has to run
At the ambulance-funding study, Brandi Pond, executive director of Oologah-Talala EMS, said call volume more than doubled from 2020 to 2025. Operating costs rose from $1.4 million to $2.2 million while property-tax revenue grew much more slowly.
She expects to need about $2.5 million this year. Property-tax revenue and payments for emergency calls alone will not sustain the service.
Bryan County EMS Chief Brian Norton, whose service has five ambulances, offered a more direct description.
“We run out of trucks every day,” he said.
Those are problems under the existing funding system. Reducing what it collects would leave a bigger problem to solve.
Lawmakers discussed consolidation and treating some patients without transporting them to a hospital. Counties already can ask voters to approve a sales tax dedicated to EMS.
But whichever approach a community chooses, somebody has to pay for the ambulance, the crew and the fuel.
Government-funded services are not immune to inflation any more than the households paying for them. Ambulance providers face rising demand as well. Public safety and road maintenance have costs that continue after a tax bill gets smaller.
Finding another source
Property, income and consumption are the main bases of taxation. They currently support different parts of government: Property taxes help finance schools, counties and ambulance districts. Income taxes support state government. Sales taxes support the state and are especially important to cities.
Eliminating one does not eliminate the expenses it pays for. Unless spending falls or growth produces enough additional revenue, more of the responsibility moves to the sources that remain. Money collected by one level of government also does not automatically replace money lost by another.
Claiming economic growth alone could generate enough revenue to cover the losses is a dubious proposition, but we’ll leave that discussion for another time.
Relying more on sales taxes would also mean examining what those taxes cover. At the Sept. 28 interim study, lawmakers considered taxing streaming services and software subscriptions. The Oklahoma Municipal League argues that the shift from taxable store purchases to untaxed subscriptions has weakened cities’ sales-tax base.
Rep. Mark Lepak, R-Claremore, who hosted the study, said the policy deserves consideration on its own merits. He was not presenting it as the answer to replacing Oklahoma’s income tax.
Rep. Scott Fetgatter, R-Okmulgee, doubted lawmakers could agree to such a trade.
“There is no world that I feel I can see a path to tax reform in the state of Oklahoma. None. Zero,” he said.
His concern was finding enough votes for a new tax.
“You get plenty of people to agree on what taxes we should cut,” he said.
He allowed that a new tax might not be needed. But if replacement revenue is needed, agreeing to the cut does not settle how to collect it elsewhere.
Oklahoma’s Constitution requires state revenue bills to receive voter approval unless three-fourths of the membership of each legislative chamber supports them. That is a very steep hill to climb.
Lawmakers first cleared that hurdle in 2018, 26 years after voters established it. The revenue package followed years of fiscal strain and mounting pressure from teachers, with a statewide walkout looming. It took extraordinary pressure to produce that agreement.
How long would it take?
Rep. Gerrid Kendrix, R-Altus, offered a more hopeful assessment than Fetgatter’s, though hardly a quick timetable.
He described a previous House-Senate group that spent about two years working on tax reform and simplification. Connecting tax cuts to the changes needed to offset them was one of its difficulties. His assessment concerned broad tax reform, rather than the timing of any one property-tax proposal.
“I think it’s unlikely that it’s a three-to-five-year project,” Kendrix said. “I think it’s a lot more likely that it’s a longer-term deal than that.”
He also questioned how well lawmakers understand the cost of existing tax exemptions.
“There is a process that we can get there,” he said. “It’s just gonna take time, conversation and education.”
That brings us back to Paxton and Mazzei. Whether their talks produce substantial property-tax relief, and whether replacement revenue would be necessary, remains to be seen.
Paxton, R-Tuttle, acknowledged the balancing act when we spoke.
“We just need to make sure that what we’re doing is not financially devastating to schools or counties,” he said.
Ambulance service should be included on that list too. Whatever agreement comes out at the Capitol, those providers will still have calls to answer and people in need.
