Tax cut proposal would stave state government (Tulsa World)

By Ken Neal

Oklahoma income is declining, so we must cut taxes again.

Gov. Mary Fallin, inoculated long ago by the failed trickle down theory from the Ronald Reagan years, continues a tax policy that has failed time and again, both nationally and at the state level. She knows that is a failed doctrine. Why else would her budget cut spending?

There will be less money for already-starved schools. Higher education will continue to shift costs to students. State employees haven’t had a pay raise in seven years. While the prison population grows, the number of men and women guarding them is declining to dangerous levels.

Since statehood, Oklahoma has had comparatively low taxes. If low taxes attract industry, the state ought to be the most industrialized state in the union. Reagan himself had to raise taxes several times after proclaiming the trickle down theory. His budget director, David Stockman, admits he made up the numbers to make the Reagan budget sound plausible. Today, Stockman is a firm opponent of trickle down economics.

Countless studies of industries seeking to locate plants have shown that taxes are far down the list of attractions to a state.

Quality of life attracts business at all levels. Yet, Oklahoma fails to raise funds for all state services that go into making a high quality of life.

Fallin constantly repeats the GOP mantra that government ought to be smaller. By all accounts, Oklahoma government is small. So just how small does she expect it to be? Are we to eliminate public service after public service until it can be “drowned in a bathtub” as Grover Norquist insists?

Former Gov. and U.S. Sen. David Boren, now president of the University of Oklahoma, was quick to point out the fallacy of reducing taxes. Fallin would cut higher education by $71 million on top of already draconian cuts. Boren has famously said that while OU was once a state-supported university, then a state-assisted university, it soon will be simply a university located in Oklahoma. David Blatt, who runs the Oklahoma Policy Institute, said the Oklahoma budget is already $572 million less than in the recession year of 2009. Now Fallin wants to cut another $100 million, she says. Her budget cut would not help ordinary Oklahomans. The bottom 60 percent of taxpayers would receive only 9 percent of the reduction. Wealthy Oklahomans would benefit due to a tax structure that benefits the rich.

Blatt reminded citizens of the desperate straits of hospitals. “At a time when Medicaid needs new funding just to continue existing services, the governor suggests cutting state funding for Medicaid while refusing federal funds,” he said.

Fallin refused federal funds to expand the number of people covered by Medicaid under the Affordable Care Act.

The fact is that despite continued wrong-headed policies, Oklahoma’s economy is strong. It is strong because of the state’s oil and gas resources. Money from those sources cloaks the sad state of affairs. If not for the income from these, plus the income from oil and gas industry jobs, etc., the picture would be far darker.

Oklahoma has used oil and gas income in the past to cut taxes. The state cut taxes during the oil boom of the late 1970s, only to raise them when the oil bust came in the early 1980s.

That can’t be repeated. Oklahomans foolishly passed a tax limitation amendment to the state Constitution in 1992 that requires either a 75 percent vote in each house of the Legislature or a vote of the people at a general election. This means a tax cut is extremely unlikely to be restored.

Oklahoma is headed toward smaller and smaller (make that more and more starved) government.

We do that by following Gov. Fallin’s belief that a tax cut brings in more money. Don’t be fooled. A tax cut means less and less state services and a more and more backward state.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.