Highway 51 Bridge between Wagoner and Coweta. Photo by flickr user doug_wertman used under a Creative Commons License.

Last week, Gov. Fallin announced a plan to fix the state’s decaying bridges by 2019. The proposal involves putting more money in the ROADS fund, which receives a portion of income tax revenues that would otherwise go to the state’s General Revenue Fund.

OK Policy released a statement on the Governor’s plan that was mentioned by both The Oklahoman and The Tulsa World:

We welcome Governor Fallin’s focus on fixing Oklahoma’s crumbling bridges. However, we must note that her proposal would be paid for entirely by diverting more income tax revenues from an already cash-strapped state budget. At the same time, Governor Fallin and other state leaders are promoting further cuts or outright abolition of the income tax. This should remind us that the income tax remains vital for funding Oklahoma’s needs and that we cannot meet our obligations to pay our bills while undermining our revenue base.

The Oklahoman included a response from the Governor’s spokesperson that the effort to fix bad bridges “does not reflect a lack of commitment to other areas of government.” Fallin’s office told The Oklahoman, “much of the additional transportation funding would come from growth revenue, and Oklahoma has enjoyed nice growth in revenue this fiscal year.” Read the rest of this entry »

On January 1^st, tax cuts with a revenue impact exceeding $100 million, which include the full repeal of the state’s estate tax and a steep increase in the standard deduction, will take effect in Oklahoma.  Do these tax cuts reflect our priorities at a time when budget shortfalls are leading to layoffs of school personnel, cuts in Medicaid benefits, and the closing of treatment facilities for people suffering from mental illness? If Oklahoma legislators, and the voters they represent, were asked to make these choices today, most would likely decide to target scarce resources to limiting the magnitude of cuts. But because of multi-year revenue commitments made by the Legislature several years ago, during very different economic and fiscal circumstances, these tax cuts will take effect automatically next month.

As state leaders grapple with the short-term challenges of bringing the budgets for this year and next into balance, it is not too early to draw lessons from the current state fiscal crisis to design policies that will allow us to respond better the next time the economy falters. This post, the third in a series that will recommend changes to our budget and tax system, looks at options for putting multi-year commitments on hold during downturns. Our first post recommended enhanced and expanded budget forecasting; the second looked at strengthening reserve funds. The final piece will consider tax expenditures. Our proposals are all intended to enhance the Legislature’s ability to manage budget downturns without having to implement deep cuts to vital state services or enact tax increases. Read the rest of this entry »