State Rep. John Michael Montgomery has introduced legislation as part of his “Vision 2050” that would end reliance on volatile revenue sources, bolster long-term education support and supercharge state investments in research and development.
“As I talk with constituents and fellow Oklahomans, it is clear that they want a long-term vision and plan, both economically and financially for our state, and I am committed to doing what it takes to put that in place,” said Montgomery, R-Lawton.
House Bill 1400 would establish a “Vision Fund” that would set aside excess cash that normally would be appropriated, as well as a barely noticeable amount of tax receipts into an endowment style fund. Part of the interest from the fund through the years would support smaller sub-funds for pre-K through 12th-grade education, research and development and the Oklahoma Center for the Advancement of Science and Technology (OCAST). Once the Vision Fund interest is large enough to replace income taxes, Oklahomans would receive money from the fund, while maintaining the smaller endowments for education and research and development.
“Oklahoma could be the second in the country, after only Alaska, to put a plan in place to eliminate major state taxes,” said Montgomery. “We would be insuring a permanent investment in an essential state service while unleashing the creativity and innovative spirit of Oklahomans.”
House Bill 1401 would establish a “Legacy Fund” that would set aside a part of gross production taxes from oil and gas, in addition to saving funds for designated education endowments. This plan would set the state on course for ending its reliance on this volatile revenue source, said Montgomery. Apportionments currently relying on this source of tax would be either held harmless or put in position to not rely on the revenue within a decade.
“Eight of the nine states that rely on gross production-style taxes already do this to some extent, so Oklahoma would be the last to do so,” Montgomery said.
House Joint Resolution 1010 would add a state question to the November ballot that if approved would be vital to unleashing the financial juggernaut of the Vision and Legacy Funds.
The question would add language to the law that would allow the Legislature to authorize any fund created by the State Constitution or by statute to be used for the purpose of generating returns on investment.
Investments would be limited to the amount that could be placed in each category of investment. The law would further specify that investments be made with purpose and care by persons of prudence, discretion and intelligence not for speculation but for investment considering the probable safety of the capital.
Applying the rule of compound interest with the objective of reducing and eliminating reliance on major tax sources would be reached sooner, said Montgomery.