Two news items this week brought the state’s economic woes into a tighter focus this week.
The Bureau of Economic Analysis reported that Oklahoma’s economy shrank more than any other state in the second quarter, and the Center on Budget and Policy Priorities reported the state still leads the entire nation in the amount it has cut education since the 2008 recession, a whopping 24 percent or almost a quarter of total funding.
This dismal news follows other dismal news on the economic front. State leaders are bracing for perhaps a billion dollar budget shortfall for next fiscal year. Tax revenues continue to drop, and it’s possible state agencies will have to begin budget cuts soon in order to make ends meet this current fiscal year.
The short-term reasons for the growing economic crisis are falling oil and natural gas prices caused by a glut on the world market, which leads to less production, and relatively recent income tax cuts that primarily have benefited the wealthiest people here but have overall led to a decrease in state tax revenues.
The long-term reasons, however, are more important. The state needs to diversify its economy and change from an anti-education or anti-intellectual state into one that, above all else, privileges common and higher education.
As a longtime Oklahoman, I’ve encountered the economic diversification argument for decades. It goes like this: Oklahoma’s economy and government funding are too dependent on the oil and gas industry, which has a history of boom and bust cycles. When things go “bust” here, which they always do, people leave the state in droves and government budgets are drastically cut, reducing funding for education and vital social services. The ensuing poverty builds on itself. Homelessness, hunger, mental illness and urban blight grow exponentially.
I haven’t seen any statistics that show people are leaving the state in droves, and that might not be the case this time around. Our unemployment rate, still hovering around 4 percent as of October, according to one report, is relatively low, but that’s almost certain to change.
— Tulsa World (@tulsaworld) December 10, 2015
The diversification issue and the lack of education funding go hand-in-hand with each other. So here are three things state leaders could do:
(1) The state desperately needs to provide better funding for all levels of public education. It’s not only a cliche that education is the absolute answer to the state’s economic woes. It’s true. If we had more college graduates, they could help produce and work at the type of jobs that pay well and provide good benefits. The taxes paid by well-paid people in both income taxes and sales taxes would boost the economy. By cutting education the most of any state in the nation, Oklahoma is essentially committing a long drawn-out suicide. The state is still below the national average in college graduates. This has to change, and it all starts with adequate funding for education.
(2) The state needs to invest on both the private and public level on creating more renewable energy sources, such as wind and solar power. Oklahoma is a perfect place to do this, especially with wind power and its vast spaces of open land in its rural areas. This not only creates new jobs, but it makes the state less dependent on the ups and downs of the energy markets.
(3) One thing that any state can do these days is invest in programs that can attract technology companies or help people start their own technology companies. I’m not just talking about software development. Web content development, which can require knowing computer languages, is a growing field as well and can be done anywhere. Why not here in Oklahoma? The state can offer low overhead costs, a decent cost of living and a slower lifestyle space than, say, Silicon Valley. While it’s true the state is landlocked and doesn’t offer the amenities of larger coastal communities, technology jobs offer flexibility in terms of traveling. Developers can do their job anywhere. Why not create Oklahoma as a solid home base for them and their companies?
None of these ideas are earth shattering, of course, but hydraulic fracturing, or fracking, is bringing the fossil fuel era to a dwindling end with severe environmental damage, from water pollution to earthquakes. Is this one of the world’s last fossil fuel gluts, one of the last “busts” we Oklahomans have to endure? Should we remain tied to an illogical and anti-intellectual economic philosophy?