Oklahoma’s budget woes could hamper services, groups say (Tulsa World)

By Barbara Hoberock  

OKLAHOMA CITY — Groups expressed concern Wednesday that a revenue failure for the current fiscal year and large budget hole for the next fiscal year will seriously hamper the state’s ability to provide core services.

Officials said the poor revenue outlook is a result of depressed oil prices. Others blamed revenue lost due to the Legislature’s unwillingness to reduce economic incentives that benefit certain groups and industries. Some pointed toward a series of cuts to the income tax.

Gov. Mary Fallin defended the tax cuts. Fallin signed a bill that reduces the top income tax rate to 5 percent from 5.25 percent Jan. 1 at an annual cost of $147 million.

“Of the six personal income tax reductions that have taken effect under Republican and Democrat governors since 1998, all but one were followed by revenue growth,” Fallin said. “The only exception is the tax reduction passed in 2001 that took effect during a subsequent recession in which all major tax streams were declining.

“Like the 2001 reduction that has since proven its worth over time, the measured tax reduction effective Jan. 1 is starting during a major oil price collapse that is causing declines in all major tax categories. Once the price of oil rebounds, I am confident this tax cut will prove its worth in the long term.”

David Blatt, executive director of the liberal policy group Oklahoma Policy Institute, said the core services were already cut to the bone during a time when energy prices were high.

“The only responsible path forward is to put new recurring revenue on the table and to reassess tax cuts and tax breaks that are becoming more unaffordable every day,” Blatt said.

Jonathan Small, incoming president of the conservative policy group the Oklahoma Council for Public Affairs, said the downturn means it is time for policymakers to be innovative, prioritize government spending and focus on transformational reforms, such as corrections reform.

State agencies have been hit with years of cuts and have little room for more cuts without reducing services they provide, said Sterling Zearley, Oklahoma Public Employees Association executive director.

House Minority Leader Scott Inman, D-Del City, said the Republican-controlled Legislature helped create the crisis buy eroding the tax base over the years.

“Republicans campaigned on a platform of fiscal responsibility, but instead they have presided over fiscal insanity,” Inman said. “It’s long past time for this state’s Republicans leaders to stop governing by a failed political philosophy and begin to govern with an understanding of political reality.”

The Board of Equalization is expected to meet Monday to adjust the certification numbers for fiscal year 2016 and approve the amount lawmakers will have to spend in crafting the fiscal year 2017 budget.


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