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SB 1246 Might be a Bayonet to the Gut
for the Oklahoma Senate

Powerful forces are afraid in Oklahoma…very afraid.
SB 1246 signed into law by Governor Fallin at the end of the 2014 legislative session might well be a the straw that broke the camel’s back if the Oklahoma Supreme Court follows higher court rulings and strikes down the law as unconstitutional.  The legislation was sold as a cut to personal income tax rates but only if revenue targets were met by other tax collections.  The reality is that it was a fig leaf for massive tax cuts for special interests, a check that was written that would never have to be made good because the revenue targets would not be hit due to the special interest group’s taxes going down.
Most concerning is a generally good and well intentioned conservative think tank that is opposing Mr. Fent’s lawsuit and our thought is that their opposition is extremely shortsighted and they need to reconsider their stance.  Unfortunately they seem to be panicking and most of what they say will happen is nearly impossible should the court uphold our Constitution.  If their position on taxes is to limit special tax breaks and move toward a simplified, lower rate and shift to taxing consumption instead of income then they are wrong on this issue.  One thing for sure is that they are smarter than we are so they seem to be doing a knee jerk reaction and are afraid of losing existing tax credits even though that isn’t going to happen.
And for certain the entire state will be better off if the court does the right thing.
 The sky will not fall.
This lawsuit is probably the best thing ever to come forward for Oklahoma taxpayers and liberty activists.  Rember the hard fought battle to get all bills heard in committee?  This lawsuit is going to make that happen and it will force the legislature to actualy deal with elected House and Senate members as equals that represent their constituents and not as "help" to be ordered around and threatened with reprisals if they don't obey.
Jerry Fent’s lawsuit has had oral arguments at the Supreme Court here in Oklahoma and Fent believes that SB1246 violates Article 5 Section 33 of the Oklahoma Constitution as modified by SQ 640 back in 1992.   SQ 640 was very simple; require any bill that raises revenue for state government to be submitted to a vote of the people unless a supermajority of the House and Senate approve of the legislation.  The ballot language is below and the actual Oklahoma Constitution language is below that for comparison.  Note the total absence of the words “increasing taxes” or “raising taxes” and the use of “raise revenue” and “revenue raising” language.
§ 33. Revenue bills - Origination - Amendment - Limitations on passage - Effective date - Submission to voters.

A. All bills for raising revenue shall originate in the House of Representatives. The Senate may propose amendments to revenue bills.

B. No revenue bill shall be passed during the five last days of the session.

C. Any revenue bill originating in the House of Representatives shall not become effective until it has been referred to the people of the state at the next general election held throughout the state and shall become effective and be in force when it has been approved by a majority of the votes cast on the measure at such election and not otherwise, except as otherwise provided in subsection D of this section.

D. Any revenue bill originating in the House of Representatives may become law without being submitted to a vote of the people of the state if such bill receives the approval of three-fourths (3/4) of the membership of the House of Representatives and three-fourths (3/4) of the membership of the Senate and is submitted to the Governor for appropriate action. Any such revenue bill shall not be subject to the emergency measure provision authorized in Section 58 of this Article and shall not become effective and be in force until ninety days after it has been approved by the Legislature, and acted on by the Governor.

Critics of Mr. Fent’s bold lawsuit contend that “raising revenue” means increasing revenue or increasing tax rates.  And they have no other choice but to confuse the court because:
  • the legislation originated in the Senate and thus violated the Origination Clause
  • was not referred to the people though a State Question on the General Election
  • it did not receive a ¾ majority vote in the House or in the Senate, 56 to 30 in the House and only 32 to 10 in the Senate
Of course all of this hinges on exactly what is the definition of a revenue bill.
Revenue bills impact the methods for raising money as in taxes, user fees, custom duties, or tariffs.  It is that simple, raising or lowering fees or taxes do not matter, only if it impacts the process of raising revenue for the government.  Our founding fathers were well aware that the purse strings must be held by the House of Representatives because they were closer to the people due to being elected every two years and at the time and up until the early 20th century the Senators were appointed, not elected.  So our U.S. Constitution was written with an “Origination Clause” that was copied nearly word for word into most state constitutions as the states were formed.
Legal fights over the Origination Clause are not new, this became a battle ground early on in our country’s history and the law is well established on what violates the Origination Clause and what a revenue raising bill exactly is.
Opponents of Jerry Fent’s efforts are trying  to paint a picture of a good law used for bad purposes.  The claim is that the voters approved SQ 640 to make it difficult to increase taxes when in fact that language was not in the ballot language nor is it in Section 33 of our Constitution.  What the State Question did was place the power of the purse into the hands of the people at the General Election.
Opponents of Fent’s lawsuit state that SQ 640 restrained the lawmaker’s ability to increase taxes and revenue by requiring that all revenue bills start in the House, must not be passed in the final five days of the session, and that they must be submitted to a vote of the people or get a supermajority approval in the legislature.  The truth is that the first two restraints were part of the original handwritten Oklahoma Constitution; only the submission to the vote of the people was added in 1992.   When good intentioned organizations play fast with facts is when I start to pay attention.
Another point they are making is that tax reduction bills do not require a vote of the people and that to require a general election state question somehow violates the “plain wording” of the amendment and the intent of the voters.  Bunk…  The people voted to seize the power of the purse strings and not until Jerry Fent came along did anyone try to impose their will.   The argument that revenue bills are not subject to a vote of the people contradicts the plain language of the ballot measure.
Next opponents claim that there will be “grave consequences” on the ability of the legislature to provide tax decreases in the future.  Well, following the Constitution is supposed to constrain government, which is the purpose of both the U.S. and the Oklahoma Constitution; to constrain government, not allow it to run wild and disregard the law of our land.
Opponents claim that if the Supreme Court of Oklahoma follows the law there will be numerous problems such as requiring Appropriation bills, technical amendments to revenue related statutes, legislation lowering user fees or previous personal income tax cuts all to pass before a vote of the people.  They worry about business tax cuts, estate tax cuts, tax credits, tax deductions for seniors and retirees and veteran tax cuts all being challenged in court.  These arguments have mixed validity:
  Appropriation bills simply spend the money so they won’t be affected.   Look at the system like a tank and pipelines.  What comes in is revenue regardless of the size of the pipe or pressure, if it comes in it is revenue and anything that impacts or effects the pipeline is a revenue bill.  What goes out is Appropriations and there is a defense for any money previously spent or any legislative action taken in good faith called the estoppels doctrine or retroactivity doctrine.   Any decision by the court would have no effect on grandpa’s tax return last year but it would force the legislature to proactively fix their mess before the end of next session.
Amendments to revenue related statues would and should follow the law and require a vote of the people.  Do they think the average citizen is too stupid to vote to support the public good?
Legislation lowering user fees or personal income tax cuts are going to pass by a wide margin.   Things like charity deductions, veteran deductions, interest deductions and all the others have a wide margin of support
Then we get to the actual problem for the special interest groups, special interest tax cuts that might be impacted and might not survive a general ballot vote.
Business tax cuts would have to be fair and help all businesses, not the State Chamber of Commerce members.    Constituencies of special interest bills simply are too small and don’t have millions and millions of dollars needed to bribe legislators to pass special interests tax credits by a ¾ margin or have the money to defend the tax credits before a skeptical public at the polls.  The losers will be the tall building crowd in Tulsa and Oklahoma City, not the average Joe or Jill.
Estate tax cuts will probably have no problem passing as everyone dies eventually and has dealt with the effect of Estate taxes on surviving family members.
Tax credits….oh boy, that struck a nerve!   These good old boy deals that are passed after millions of dollars in campaign donations will have to survive public scrutiny and most won’t.  The gravy train will be over.
Seniors, retirees, and veteran’s tax cuts are going to have to pass the smell test too.  Let’s face it; most seniors are not living on dog food in a cardboard box.  They are the single largest group in America with the most disposable income.  House is paid for, kids are through college and self supporting, plenty of money for travel and leisure for the vast majority of seniors.  And the ones that are struggling simply are not making enough money to pay that much in Oklahoma tax anyway.  Reducing everyone’s taxes is the fairest way to get a tax reduction passed and the income tax rates are highly regressive so the wealthy and higher income brackets will continue to pay more in taxes.
Opponents dig down deep into the weeds in their spurious arguments by claiming that past expenditures of revenue would be ruled void.  Nonsense, that is spending, not raising revenue or effecting the process or method of raising revenue.  Estopples doctrine will protect past actions and any impact will be forward directed to the upcoming tax year of 2015.
The upcoming Oklahoma Supreme Court ruling will indeed set a precedent that could affect legislation like the gross production tax compromise that was passed in 2014 and that legislation will surely be challenged.   But think about this, is it more important that we reward special interests for their bribery of public officials or is it more important that we follow the law?
Opponents of Mr. Fent are trying to use scare tactics, claiming that routine state budget bills that are generally passed in the final days of the session will be overturned and funding for schools, public safety, transportation, and safety net services will be eliminated.    Again they are being dishonest as Appropriation bills or spending are not impacted by Article 5, Section 33.  What they do provide is a laundry list of special interest legislation since 1992 that could be challenged:
  • Reductions in the state income tax from 6.25% to 5.25% passed in 2006
  • Manufacturing exemption from the state corporate income tax for distributors passed in 2005
  • Prohibition of taxation on intangible personal property passed by the voters in 2012
  • The gross production tax rate of 2% for all new oil and gas wells drilled for the first three years that was passed this year
  • Repeal of the Oklahoma Estate Tax repeal in 2005
  • Disabled veteran tax relief passed since 2005
  • Matching the federal deductions on the tax return passed in 2006
  • Veteran personal tax relief passed in 2006
But some of those laws were passed before the people in a general election...
Oh the sky is falling Chicken Little!
Oh, and one huge point… the actual case or controversy rule in law requires that a court case challenging a law have a plaintiff that can prove actual damage before they are allowed to challenge a law.  We know that the blackmail statute needs struck down to protect the First Amendment but until our case came along no one could challenge it.  Fent had the right to challenge the law within a certain time frame after it was passed.  It is going to be tough to find someone willing to go after a disabled veteran tax break and prove that it damaged them in some way.
What our opponents want is for people to petition the Oklahoma Supreme Court to ignore the Oklahoma Constitution and to strip the right of the people of Oklahoma to control the purse strings of the legislature.   SQ 640 has been good for the state since it was passed in 1992 but imagine how much better we all would be if the Constitutional amendment had actually been followed by the legislature?
But getting past the wonderful opportunity for the people of Oklahoma to seize control of the purse strings, what does the law actually say about revenue bills and the Origination Clause in our Constitution?    Remember that the law is comprised of the actual statute or Constitutino AND the higher court cases that hare handed down to define that law.
The U.S. Supreme Court has numerous examples of legislation being struck down because it violated the U.S. Origination Clause and examples of what a revenue bill is and isn’t.   The best example is Wardell V. United States, a frivolous tax appeal case  in 1985 where the U.S. Court of Appeals for the Ninth Circuit said this :
“We cannot accept this restrictive and strained reading of the Origination Clause. The term “bills for raising revenue” does not refer only to laws increasing taxes, but instead refers in general to all laws relating to taxes.”
The court gave numerous reasons why they rejected this particular case and documented both their thinking and the U.S. Supreme Court’s thinking on the legislative process.   First the U.S. Senate has never regarded itself as being empowered to initiate any sort of revenue bill, even one that lowers taxes.   They quote Exhibit 2A, Hinds Precedents of the Houe, written 1872. 
Second they state that it would be impossible to decipher if a bill raises or lowers taxes because the impact will have varying effects on individuals and businesses and on the amount of total taxes raised in a fiscal year.   Lastly the Court brought up other Supreme Court decision where the Senate took a House bill and reversed the intent, raising taxes instead of lowering taxes as in the original language.  They ruled that the Senate had the right to do as they wish as long as the amendments were germane to the original subject of the bill and as long as the enacting language remained on the bill.
They ended with this statement:
“We therefore reject Armstrong’s proposed interpretation of the Origination Clause, and conclude instead that in adopting that clause, the framers of the Constitution intended that all legislation relating to taxes (and not just bills raising taxes) must be initiated in the House. . . . However, we also conclude that once a revenue bill has been initiated in the House, the Senate is fully empowered to propose amendments, even if their effect will be to transform a proposal lowering taxes into one raising taxes. We therefore conclude that the Senate did not exceed its authority under the Origination Clause when it proposed the extensive22 amendment that ultimately became TEFRA.”
The Ninth Circuit Court said its decision was controlled by Flint V. Stone Tracy Co decision in 1911
That upheld a Senate amendment regardless that the amendment increased taxes and they said:
“The [Supreme] Court was not swayed by the fact that the amended tax plan increased taxes for corporations or that it might raise total taxes to a greater extent than the proposed House bill.”
The Precedents of the House of Representatives written in 1872 were quoted as saying that the phrase “raising revenue” did not depend on raising or lowering taxation:
“Suppose the existing law lays a duty of 50 per cent upon iron. A bill repealing such law, and providing that after a certain day the duty upon iron shall be only 40 per cent, is still a bill for raising revenue because that is the end in contemplation.
Less revenue will be raised than under the former law, still it is intended to raise revenue, and such a bill could not constitutionally originate in the Senate, nor could such provisions be ingrafted, by way of amendment upon any House bill which did not provide for raising — that is, collecting — revenue. “
You can read the entire research on the Originating Clause research done for the U.S. Congress here.
Another case that is quoted is Milazzo V. United States, another tax evasion case where the U.S. Supreme Court covered what a revenue bill is:
“We cannot agree that "revenue-raising" means only bills that increase taxes. "Although the bill was dramatically altered by amendment in the upper house of Congress, it remained a revenue bill, regardless whether it raised taxes or lowered them." Milazzo v. United States, 578 F.Supp. 248, 252 (S.D.Cal.1984
Now imagine if the Oklahoma Supreme Court does the right thing and follows the law.   The Oklahoma House of Representatives would finally be following our Constitution and originating all revenue bills in the House.   They would control the purse strings, not the Senate, then the people would have the final say.    Elected officials that face the people every two years in hotly contested races would be responsible for legislation that would raise taxes, lower taxes, what tax credits are handed out, and the Senate would have to retreat to its historical role of consent and providing a slow moving flywheel  effect to prevent a stampeded House from passing something silly.   Millions of dollars in bribery (campaign donations) will have been wasted on the Senate and the minority will have to be listened to at the legislature.  A more deliberative process will ensue, more bills will be heard because the leadership of both House and Senate could not afford to offend a legislator needlessly.   The Senate will know that when they kill good legislation that originated in the House like the state’s rights issues or the Agenda 21 restriction legislation that there will be a price to pay for doing the wrong thing.
A disaster for the State Senate?  Yes, they caused it and should have to pay the price.  But this is a golden opportunity for the House of Representatives.   They will retake their rightful place in control of the legislative process and better government, fairer taxation, and liberty will all improve.
Power Corrupts, Absolute Power Corrupts Absolutely
The rest of the quote is rarely mentioned
Great men are almost always bad men
By the Watchman
Fighting corruption at any level of government is usually a thankless job. I write under a pseudonym because I don’t want the thanks for what I do, but I also don’t want the hassle that goes along with it. You see I don’t need a corrupt District Attorney attacking me with trumped up charges like they have other writers in this state. What I want is to open people’s eyes to the corrupt politicians in this state and show you, the citizens of Oklahoma how the political bosses and the Oklahoma State Chamber of Commerce have been sticking the shaft to the citizens of Oklahoma for the last forty years.
We’ll begin with an article from the Oklahoma State Constitution:
Section XXIV-2  Constitutional convention to propose or new constitution. No convention shall be called by the Legislature to propose alterations, or amendments to the Constitution, or to propose a new Constitution, unless the law providing special election, alterations, revisions or new Constitution, proposed shall be submitted to the electors of the State at a General or Special election….” 
Our state constitution was written to provide a check on the legislators by requiring a Constitutional Convention every two decades but has it been done?
You can read more on this information here. Folks this is a question that is supposed to be put to a vote of the people every twenty (20) years. It’s been over forty (40) years since we’ve had the opportunity to vote on this subject. We ask this question:  Does the Oklahoma Constitution matter?
Oklahoma is known as the reddest state in the Union but the Republican Party is supposed to stand for smaller government and fiscal responsibility. We think that if you were to look at this video  you will see that the Oklahoma State Government is as bloated as the federal Government is. Do we really need that many agencies and bureaus to run this state. Payoffs to cronies at the expense of the taxpayers is no way to run a state.
Oklahoma has a long history of political scandal. One of those scandals is considered the “Largest Local Corruption Scandal Investigation in American History.” That investigation indicted 2/3rds of the County Commissioners representing 60 of 77 counties in the 1980’s. That was just one. You can read about plenty more here. Some of these included the Justices of the Oklahoma Supreme Court. It makes a person wonder if they can even get justice in this state.
Individual states, Oklahoma included, have abandoned their duty to act as the vertical check on Washington’s excesses for the chance at a cut of the $3 Trillion dollar lottery offered by the corrupt politicians in Washington D.C., in fact Oklahoma has built its own little power base. You can read about it here. We pay our legislators a lot for what little time they put in conducting state business, but did you know a lot of the decisions were made before the secessions ever started? Well they are.
“Power in Oklahoma is concentrated at the Legislative level by the Speaker of the House, the president pro-tem of the Senate and the various Chairmen of the committees.” In short unless you’re on the good side of these individuals or a member of the leadership team, your bill stands a slim chance of being heard.
When it comes down to the part of the budget that the House and Senate must approve is negotiated by representatives of the Governor’s office and the Senate behind closed doors and then presented to the full House and Senate for approval. We ask where the fairness in this is. The House and Senate members are being paid more for four months of work than a lot of their constituents make in six months. They keep saying that they are pressed for time to get the people’s business done, yet we’ve never seen a bill passed requesting a state question to extend the working days of the session.
It is we the people demand that a bill be introduced to call for a State Constitutional Convention in accordance with the Oklahoma State Constitution. Perhaps we need a bill that extends the working days of the session of the House and Senate by forty five (45) days.  Another bill stating that all future laws include in the opening declaration that they are in accordance with the Oklahoma State Constitution and what section and sub section of the State Constitution. It’s time that the Republican controlled House and Senate started acting like the party of the limited government and smaller government they’re supposed to stand for.