As Oklahoma’s tax debate unfolds, it has been encouraging to hear a rising chorus of influential voices insist that any tax plan must be revenue neutral. Given deep cuts that state agencies have absorbed in recent years and the long-term fiscal challenges the state faces in the years ahead, eroding our revenue base with one-sided  tax cuts would be hugely irresponsible and fiscally unsustainable. One promising approach to ensure that we do not bankrupt the state is for Oklahoma to adopt a pay-as-you-go, or PAYGO, requirement.

State Treasurer Ken Miller recently stated:

Budget writers should adopt a “pay-as-we-go” approach to reducing taxes. To responsibly finance tax cuts, policymakers should eliminate one dollar of spending or credits for every dollar cut in taxes.

This can be accomplished with fiscal discipline, better spending prioritization and a refined approach to budgeting.

Miller’s call for a pay-as-you-go approach was quickly endorsed by both the Oklahoman and Tulsa World. Read the rest of this entry »

Ken Miller is State Treasurer and a member of the the Task Force for the Study of Tax Credits and Economic Incentives.  This originally appeared as an article in the November Oklahoma Economic Report and is reprinted with permission. For an earlier blog post on tax credit reform by Task Force co-chair David Dank, click here, and see this piece laying out OK Policy’s position.

Critics contend that if politicians are good at anything, it is studying something to death. While this legislative interim has been full of task forces and studies, many promise to be more than just simple academic exercises. True, some are meant to garner attention for a favored issue. Others are meant to bolster an opinion. And some are honest undertakings in search of good policy.

And there are some with elements of each of the above. Facing a December 31 report deadline, the Task Force for the Study of Tax Credits and Economic Incentives is preparing final recommendations.

It is this task force member’s hope that rhetoric and ideology will play a subordinate role to sound policy and economic reality. The task force recommendations can impact our business climate for years to come and must take into account the competitiveness of states in attracting industry and economic growth. Read the rest of this entry »

The 2011 legislative session was marked by passage of legislation to limit lawsuit damages, restrict the collective bargaining rights of public employees and the legal rights of teachers, revamp the workers compensation system, and consolidate state agencies. Yet when asked to name the session’s biggest accomplishment, Senate President Pro Tem Brian Bingman identified an issue that largely flew under the public radar:

The biggest thing is going to have to be pension reform. The Legislature stepped up and made some tough decisions and took our pension liability from $16 billion down to $10 billion. And at the same time we’re protecting the commitments we made to the people in the system. I think that was huge.

Read the rest of this entry »

The Oklahoman’s Michael McNutt covered the remarks I made last week at a panel on the state budget crisis at the University of Central Oklahoma’s Southwest Business Symposium. My conclusions were rather stark:

“We’ve been able to avoid the apocalypse up until now,” David Blatt, director of the Oklahoma Policy Institute, a state policy think tank, said. “If we’re going to avoid a sort of catastrophe, we need additional revenue to close that gap,” Blatt said…

The magnitude of the budget crisis that is being faced for the upcoming budget year is only beginning to be grasped. In short:  the Board of Equalization has certified just over $5.415 billion in available state dollars for FY ’11. That is $1.55 billion less than this year’s revised budget after the mid-year cuts that were made to bring the budget into balance. Assuming the state uses an additional 3/8ths of the Rainy Day Fund and the remaining available federal stimulus dollars, that still leaves a gap approaching $800 – $850 million, according to our calculations. This gap is equivalent to 12 percent deeper cuts across all agencies of state government above the cuts already enacted the past two years. The actual  gap may be somewhat lower, if the full balance of the Rainy Day Fund is used and if additional federal Medicaid matching dollars materialize as hoped, but the prospect of deep cuts next year looms large. This outlook has been confirmed in recent pronouncements by Senate Pro Tem Glenn Cofee and other legislative leaders. Read the rest of this entry »

Straight off the press release. Note especially the “free and open to the public” part. Come cheer me on!

The University of Central Oklahoma Policy Institute will be host for a panel discussion – “Oklahoma’s budget crisis in the midst of recession: What policies should the state pursue to minimize the budget shortfalls?” – from 2 p.m. to 3 p.m. March 25 at UCO’s Nigh University Center.

Panelists will include state Sen. Clark Jolley, R-Edmond; state Rep. Ken Miller, R-Edmond; and David Blatt, director of the Oklahoma Policy Institute. Read the rest of this entry »

If, as Judge Louis Brandeis famously stated, “Sunshine is the best disinfectant”, the Oklahoma Legislature seems to be on a bit of a cleaning frenzy. Several bills making their way through the legislative process this session HB 3422, SB 1633 and HB 3253 – would expand the amount of information on public expenditures that is made available online to the public.

The measures all build on the 2007 Taxpayer Transparency Act, authored by Sen. Randy Brogdon, which led to the state’s OpenBooks website. The site makes available data on expenditures by each state agency by year and purpose, including detailed payroll and vendor information. OpenBooks also provides information on individuals and businesses who claimed tax credits against the income tax (see our post on this subject). Read the rest of this entry »

There is definitely something in the air. Over the past several weeks, there has been a heavy flurry of attention paid to the state’s system of tax expenditures, the array of over 450 exemptions, credits, deductions and the like that allow taxes not to be paid when they otherwise would. Yesterday, we released an in-depth issue brief which we titled “Let There Be Light: Making Oklahoma’s Tax Expnditures More Transparent and Accountable.” In our press release, we stated:

While the merits of granting tax preferences can be debated as a matter of principle, the reality is that they are unlikely to be abandoned entirely. There is a chance now to build on important progress made in recent years in increasing disclosure and scrutiny of tax expenditures to really get a handle on which tax breaks are worthwhile and effective, and which are wasteful giveaways.

Read the rest of this entry »