Governor asks for tax cuts, changes in tribal compacts

Jan. 26—TAHLEQUAH — A press conference via Zoom by Gov. Kevin Stitt on Jan. 25 focused on his request for a special session to address tax cuts and a renegotiation of tribal compacts.

Several key legislators, including Republican Senate Pro Tem Greg Treat and others in both parties, have said a special session would be a waste of taxpayer money, since the regular session begins Feb. 5. But Stitt said Thursday that the state has a large savings account of over $5 billion, that one tax cut has been approved already, and that there is a budget surplus.

He said the special session he has called is the third one to address tax cuts, but the Senate wants to study the issue or wait until next year.

Stitt said Speaker of the House Charles McCall, also a Republican, has passed Stitt's tax recommendations every time Stitt has asked, and has assured the governor they will pass it again next week during the special session. But Senate leaders have said they are going to "gavel in and gavel out," Stitt said, and he wants "someone to talk to and negotiate with."

"When you have excess revenue, what are we supposed to do with that, raise expenses every year to meet that revenue?" Stitt asked. "Tax cuts also control the growth of government, which is important as well."

Stitt claims he has put more money into education than any other governor before him. He said he gave raises to school teachers twice in his five years in office and they are paid "market rate," and actually some are paid in the "top of the market." He said law enforcement and corrections officers were given "huge" pay raises because he closed four prisons and saved taxpayers hundreds of thousands of dollars "without raising taxes."

But Kym Tinsley, president of the Tahlequah Education Association, said the Legislature — rather than Stitt — passed a significant pay raise for teachers and made the largest single-year investment in public education in the state's history.

"There were tireless efforts made by legislators from both parties, educators, parents, community members, and public education advocates to make that happen," Tinsley said.

She said it is essential to contextualize the raises within the broader landscape of education in the state.

"While the recent pay raise and investment in public education were significant milestones, they only begin to address the long-standing issues we face," Tinsley said.

Tinsley pointed to a continuing struggle to overcome educator shortages, and the state lags behind others in terms of teacher pay and per-pupil funding. She underscored the need for sustained attention and investment in the education system to ensure the success of students and educators.

Stitt mentioned his other successes, saying that as the "businessman governor," he's trying to be fiscally conservative and invest in roads and bridges.

"We've fully funded them for the first time ever; it's called the Roads and Bridges Fund of $775,000,000. We're ranked No 5 in best bridges right now," he said.

Stitt said it is time to give Oklahomans a "pay raise" with a tax cut and slow the growth of government. Twenty years ago, he said, the income tax rate was 7%, and that Oklahoma has been on a path to zero. As taxes were cut, revenue has gone up, Stitt said.

The governor responded to a question of how the state can maintain steady revenue to avoid an income tax increase if revenue dips.

Oklahoma would need approximately $3.7 billion in savings to weather any downturn, he said, and added that Oklahoma has that amount set aside. He is proposing $1 billion be set aside, which would be five full years of a "1/4-point tax cut" if revenue dipped.

Stitt said the grocery tax could be eliminated, and that Oklahoma is one of only 12 states that charges a tax on groceries.

Stitt claimed the Legislature believes in a "growing government" and is asking for a 9% pay raise for state employees. Stitt believes taxpayers should have a raise before government employees.

The governor was asked by a caller about the tribal tobacco and car tag compacts, and explained what will happen if more Indigenous nations won't renegotiate their compacts.

Back in the 1990s, the federal government agreed tribes can sell these products to their members without paying sales tax, while non-members must pay what everyone else pays.

"But there is already a formula without a compact, because the state collects the money at the wholesale level," Stitt said. "We take the number of members in a tribe — say it's 10,000 — what percentage of them smoke, and we reimburse them. Without a tobacco compact, no problem. The state actually makes more money because we are wiring more money to the tribes based on what's happening right now, because we know they are selling tobacco to non-Indians at a greater percentage."

Stitt said a formula is based on tribal populations and how many members smoke.

The car tags constitute a public safety issue, Stitt said.

"We've got [tribes] printing tags and charging their members, and none of that money is coming to Oklahoma," Stitt said.

A person of another race, when purchasing a vehicle, pays for infrastructure. Stitt said he is concerned because non-Natives have to pay this tax, but a Native who "looks white who is part Native ... pays zero to the state and $400 to the tribe."

Stitt said the Oklahoma Turnpike Authority has lost over $2 million because tribal license plates are not in the data base. This is dangerous for law enforcement because the officer doesn't know who is in a car when approaching it, Stitt said, and the state should know who is driving on the roads. There should be one set of rules for all Oklahomans, he said.

"If you are an Indian on [the Navajo Reservation] none of the revenue from tags, etc., — nothing goes to the state of Arizona. That reservation is different," Stitt said. "What they don't tell you is the state of Arizona doesn't patrol the reservation, nor are roads built, schools, airports; the state of Arizona doesn't provide services [to the tribe]."

Cherokee Nation Attorney General Chad Harsha said that in accordance with Legislature's compact extension and state law, the tribe's car tag compact was extended in August and does not expire until Dec. 31, 2024, similar to the existing tobacco compact.

"While we are reviewing Gov. Stitt's agreement with other tribes, we are mindful that our current compacting system has stood for two decades as a model of successful collaboration between our tribe and the state," Harsha said.

She said the current compact model, which operates differently from those of other tribes, has generated dozens of jobs, established multiple car tag offices, and delivered $84 million in tribal tag revenue for public schools — including $1 million alone annually to Tulsa Public Schools. It has generated $32 million for roads and infrastructure, and $7 million to law enforcement.

"Each tribe has the right to seek and negotiate compacts that best serve their citizens, and the Cherokee Nation will continue to exercise that right in accordance with the law," Harsha said.

A question from the Zoom audience asked if there is a divide among the Five Tribes: Cherokee, Muscogee (Creek), Choctaw, Chickasaw and Seminole.

"There are five distinct tribes with different leaders, businesses, casinos, and that's part of the problem. It is very difficult to be a state and have different regulations in the ... counties. Even Tulsa is split at Admiral. It is super-problematic in rules and zoning. South Tulsa is Creek and north and east is Cherokee," Stitt said.

Stitt did not mention the Osage tribe, which also claims part of the Tulsa area on its reservation.

"The Cherokees are different [from the Chickasaws] in the fact they don't want to put their car tags in our database and [are] the biggest abusers are on the toll roads," Stitt said. "The turnpike people went to the Cherokees and said, 'We need a list of all these tags to bill them for driving on them,' and the Cherokees told them to pound sand, they don't share that," Stitt said.

Stitt called it a "jurisdictional nightmare" and said Oklahoma needs to think long-term for 20 years.

"The fed law says — back to Navajo reservation — if you are living on your reservation, you can print your own tags. They should just have to live on their trust land, which is a super small part of Oklahoma," Stitt said. "I have a friend with a $100k Porsche because it's cheaper [to buy a tribal tag]."

Stitt says the price should be the same for all for car tags and the same compact has been offered to other tribes like were signed by the Chickasaws and Apaches.

"We now have fully executed tobacco compacts with both the Chickasaw and the Apache tribes that maintain jurisdictional continuity in Oklahoma," Stitt said. "We also finalized a car tag compact with the Chickasaw tribe that ensures Oklahoma law enforcement can confidently identify vehicles on the road and guarantees that our turnpikes can read tribal tags. For the safety of all law enforcement, and for tag compacts to be workable, the state must have uninhibited, up-to-date access to driver registration information, and this agreement ensures that."

Despite Stitt's assertion, Cherokee Nation Tax Commissioner Sharon Swepston said that for 20 years, the Cherokee Nation has complied with the requirements of the motor vehicle tag compact.

"Under that compact, the Cherokee Nation uploads all vehicle tag information into the Oklahoma Law Enforcement Technology System. Law enforcement have reported no challenges in accessing this information during traffic stops. Moreover, the Oklahoma Department of Public Safety has unrestricted access to this data," Swepston said.

Swepston said neither DPS or Service Oklahoma has contacted Cherokee Nation with concerns about tribal tags as it recently transitioned to a new PlatePay system.

"To insinuate that the Cherokee Nation is uncooperative with the state of Oklahoma in this regard is unequivocally false. If there are any problems accessing Cherokee Nation tag information, the state government's agencies are the source of the problems, and the source of potential solutions," Swepston said.

Lee Guthrie writes for the Tahlequah Daily Press.