So here we are once again in a state budget mess as time begins to wind down in the legislative session and, faced with a $878 million budget shortfall for next fiscal year, lawmakers and stakeholders have starting offering up proposals.
— OSSBA (@OSSBAoklahoma) May 2, 2017
On one side of the proposals, a small group of legislators and their supporters are suggesting the state raise the oil and gas production tax back to its historic level of 7 percent and increase income taxes on the wealthiest Oklahomans. This could put a dent in the shortfall
On another side, there are proposals to tax more services and raise taxes on cigarettes and fuel, which would help the financial situation somewhat and could lead to teacher raises but would hardly solve the problem. Some people see these as regressive taxes, as well, because people with less income pay more of a percentage of their income for the essentials of life. One can argue whether cigarettes are “essential,” of course.
Then there’s The Oklahoman editorial board, which recently warned “ . . . if lawmakers raise taxes on oil and gas production and cause curtailment of drilling, they could quickly turn the current state recovery back into a recession.”
In the end, funding cuts seem to be a given once again this coming year.
So we’re stuck in a dire situation. Oklahoma, it has been noted repeatedly, has cut education the most on a percentage basis than any other state since 2008. Teachers haven’t had an across-the-board raise in years, and many are flocking to other states for better pay and support.
Virtually all areas of state government have been slashed financially in recent years as the hydraulic fracturing boom evaporated because of the world oil glut and because of tax breaks for energy companies and recent income tax cuts that primarily benefited wealthy people. The Oklahoman notes, “Energy production is a foundational element of Oklahoma’s economy,” but, well, that’s both the point and the problem.
As I’ve written here before, Oklahoma needs structural change in its economy and its tax revenue streams. What if peak oil demand and the creation of more renewable energy means Oklahoma won’t ever again enjoy the real “boom” side of the boom and bust cycles of the fossil fuel industry? That’s a possibility.
Oklahoma does have plenty of land, electricity and a decent location with two major Interstate highways running through it. It makes it ideal for growth in technology companies and tech-related businesses, but how can that happen without a more educated workforce?
How do you get an educated workforce after draconian cuts to education at all levels, which includes a16 percent funding cut to higher education last year.