Democratic viewpoints on politics, policy and activism

Oklahoma Faces Budget Problems Once Again

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.

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.

Where Is The Plan To Fund Oklahoma Teacher Raises?

Legislators have apparently yet to come to an agreement on how they plan to fund proposed teacher raises and with their session scheduled to end in about a month that’s not an encouraging sign.

NewsOK.com reported that the Oklahoma Senate has not scheduled a hearing on a proposed House bill that would raise teacher salaries by $6,000 spread out over three years. This means it missed a Thursday deadline, although by rule it could still be worked out by the Joint Committee on Appropriations and Budget, according to the NewsOK.com article.

The Oklahoma Legislature, at least in recent years, has been noted for bringing up companion legislation and passing budget deals at the very end of the session, which is a practice that sometimes gives little time for public input on crucial matters impacting the state.

The teacher pay raise, which is a crucial matter given that some teachers here are flocking to other states for better salaries, has been endorsed by a number of Republicans in the GOP-dominated legislature and Gov. Mary Fallin. The sticking point, of course, is that the state faces an $878 million budget shortfall for next fiscal year. How will the raises be funded?

The lack of an agreement on a funding plan may well mean at least some legislators want to be perceived as trying to fight for teacher raises when, in fact, they know that given the dire budget situation there’s no way any significant increase is possible.They want to have it both ways. Even a nominal raise would help, but committing the state to a three-year, $6,000 teacher pay increase without significant tax hikes or additional revenue streams would mean drastic cuts elsewhere in the budget.

Gov. Fallin has suggested the state start taxing a list of services, which has been met with mixed approval. There is a proposal to raise taxes on cigarettes by $1.50 a pack. The Democrats in the legislature have suggested raising taxes on higher incomes and restoring the overall oil and gas production tax to 7 percent. There’s still no real agreement on these issues.

Is it possible that education will face cuts again and teachers will go without raises? It could happen.

Got A Light To Help The State Budget? Increasing Cigarette Tax Under Consideration Again

I don’t necessarily see anything wrong about raising the state’s cigarette tax by $1.50 a pack, but the legislative effort to pass it again shows how Oklahoma is still dependent on small fixes to help shore up its budget.

The proposed tax increase would generate around $184 million the first year in a budget of approximately $7 billion, and some $50 million of that would go to the Department of Mental Health and Substance Abuse Services, which is a good thing. With additional matching federal funding for health programs the amount of money the tax would generate has the potential to increase incrementally.

The problem though is that part of the mission of the tax is to get people to stop smoking so, if that happened, fewer smokers would mean declining revenue. It’s a tax that seeks its own demise.

In addition, those of us that don’t smoke won’t contribute at all, and smokers would pay a steeper price for their habit. The tax is regressive in that lower-income people, if they smoke, spend more of a percentage proportion of their money for cigarettes. I understand why smokers would oppose the cigarette tax and feel singled out, but the evidence is clear that long-term smoking can and does lead to severe illnesses, such as cancer and emphysema. The nicotine contained in cigarettes is also a highly addictive drug, and it’s difficult to quit. The tax is regressive, but it’s also a public health issue in terms of the overall medical costs to our society.

So it’s a debatable issue with no real answer. Do people have the right to smoke? Of course. But how much of that right infringes on other people in terms of its health costs to our society? This question will never be resolved to everyone’s satisfaction, and we know people will continue to smoke in the foreseeable future.

The state faces a $878 million shortfall for next fiscal year. Education funding is at dismal levels, and teacher pay here is ranked 49th in the nation, pushing some educators to leave the state for increased salaries. The budgets of state agencies have been sliced because of the state’s recent budget problems caused by an oil slump and relatively recent enacted income tax cuts and tax credits for the energy industry.

As I wrote earlier, the state budget faces structural financial change. What if we’ve experienced the last true fossil fuel boom in Oklahoma? Revenues from production taxes—taxes that have been cut recently—and income taxes paid by oilfield workers have always driven the economy and the state budget to an proportional extent in Oklahoma. What do we do now besides finding small revenue streams like the cigarette tax to help balance the budget? What happens when there are no more streams to find.

State Question 776: Unnecessary, Unaffordable, Uninformed

By Camille Landry for OklahomaActivist.com

sq776-ballot-lang

The ballot language for State Question 776

This is an OklahomaActivist.com original opinion piece from contributor Camille Landry. Cross posted with permission. 

camille-head-shotThe leaders who founded our nation and our state envisioned a government of laws and principles that would apply equally to everyone. They wrote a federal, then state constitutions to ensure that the most important principles of our society are clearly enshrined. The right to vote, the right to speak freely, freedom of the press, protection against unwarranted search and seizure, a prohibition against cruel and unusual punishment, and other constitutional rights form the foundation for a government of the people, by the people and for the people.

The founders took an additional step to protect democracy: they made it difficult to change our constitutions. Opinions change, society evolves, but the constitution is meant to be the solid foundation that our government of laws is built upon and was never intended to be changed without serious consideration. After all, you don’t start tearing at the foundation unless you have a good reason – and then you proceed very carefully in a well-thought out way lest the whole structure comes tumbling down.

SQ776 would enshrine the death penalty as part of Oklahoma’s constitution. The amendment would make all methods of execution constitutionally allowable, regardless of how barbaric they are, and would forbid the death penalty from being construed as “the infliction of cruel or unusual punishments.” It opens the door for beheadings, firing squads and the return of the electric chair.

SQ776 is unnecessary and would accomplish nothing. There is no compelling reason for people who are either for or against the death penalty to vote “yes” on this question. Its passage would do nothing but shout “hooray” at something that is already an established practice; it is wasteful and serves to trivialize what is literally a life-and-death issue. Continue reading

Blue Oklahoma Making Some Changes

Hi, everyone. As you can see, Blue Oklahoma has migrated to the WordPress platform and is undergoing a makeover. I’ve decided to leave the site up through the mess of all these changes for the next few days in order to continue to post. You will note, for example, I posted today on University of Oklahoma President David Boren’s sales tax proposal that would boost education funding, which I support.

Thanks for your patience during this process. You can also find my posts on Okie Funk.-Kurt Hochenauer.

P.S.: Amazingly, Blue Oklahoma still contains all of its posts dating back to 2006 under “ARCHIVES” in the right sidebar.

Boren Plan Deserves Serious Consideration

Finally, a prominent Oklahoma leader has come up with the barebones of what I view as a workable and perhaps revisable plan to help bolster education funding in the state.

University of Oklahoma President David Boren has proposed a ballot initiative to allow voters to raise the state’s sales tax by one cent to help increase Oklahoma’s dismal funding of education.

Boren, according to news reports, said the increase would raise $615 million a year, and that $378 million could be used to give public school teachers a $5,000 raise. Oklahoma has some of the lowest average teacher salaries in the country and currently faces a major teacher shortage because of it. The state also ranks 49th in the nation in per pupil funding.

Boren said the additional money, among other things, would go to fund incentive pay for teachers, an issue pushed by conservatives. Some of the money would also go to higher education to limit tuition increases.

One of the first and somewhat negative reactions to the proposal came from the Oklahoma Policy Institute, a Tulsa progressive think tank, which argues the tax, if voted into law, would hurt lower income people the most because sales taxes, as we all know, are regressive. OKPolicy did note it supported more funding for education overall, but, as usual, it seems to want to have it both ways when it comes to funding education. It’s for it, but, well, there doesn’t seem any way to get it done. Parse through the lines in this final sentence of its statement about the proposal:

Oklahomans urgently need real tax reform to create a tax system that does not put the greatest burden on those who can least afford it and that collects enough to meet critical needs of Oklahoma families — not just for education but also health care, safe communities, and other public services to ensure a stable economy and strong quality of life.

Translation: We’re probably not going to support this proposal and we know there’s not one iota of chance for “real tax reform” right now in our conservative-dominated state government. Also, education is important, but, well, is it AS important as, say, health care?

Watch for OKPolicy and the right-wing Oklahoma Council of Public Affairs to join together again to defeat another education funding proposal if Boren goes forward with it.

It seems to me that one obvious solution to the “regressive issue” when it comes to the sales tax increase would be to make it more progressive by exempting lower-income and middle-class income people from all or some of the “education tax” through income-tax credits or rebates. This might complicate the language on the petition drive to put the measure on the ballot, but at least it’s worth considering.

As it stands now, the state faces what will likely be a $1 billion shortfall next fiscal year, and state agency heads are getting informed that they could face cuts in their budgets. This complicates the ballot initiative even further.

If Boren and any type of coalition he helps to put together go forward with the proposal, those circulating the petition would need to collect 65,987 signatures in a 90-day period for the November 2016 ballot.

Sure, I agree that the tax proposal, as it stands, is regressive, but that can be fixed with credits and rebates in the tax code, and, it’s only ONE CENT. Even if the proposal stands as is, I would support it and urge other voters to do the same. We shouldn’t forget that lower-income people would benefit by better schools. This could enable them to raise their incomes. It goes together.

If this is what it takes to improve education funding, then we need to get behind it. We face a real emergency here when it comes to education funding. Let’s do something about it.