Here at the beginning of the twenty-first century, Oklahoma is decisively in a lose-lose situation.
Gross oil and gas tax collections reach 17-year low https://t.co/8ltKLPUaNO
— Treasurer Ken Miller (@OKTreasurer) May 6, 2016
If fossil fuel prices go down, which they have over the last several months despite a recent rebound, the state’s tax revenues plummet, our poor state gets even poorer in terms of government funding and the overall economy declines. If oil and gas prices skyrocket, then the frackers go berserk, creating environmental damage, including global warming, and now the earthquakes that rattle our homes and nerves on a daily basis.
We’ve all heard of and many of us have cringed at the term “The Oklahoma Standard,” but what we really have is “The Oklahoma Dilemma.” Unless the state can really diversify its economy—energy-related employment represents around one-quarter of all jobs here—then we’re tied to the boom and bust cycle of the fossil fuel patch for years to come or until fossil fuels are reduced to just one small segment of the world’s overall energy use.
Why oil prices will likely drop below $40 soon https://t.co/RQqik4U5oq
— TIME.com (@TIME) May 4, 2016
I highly doubt Oklahoma CAN diversify its economy in any major sense. For decades, state leaders have talked about such diversification, and for decades nothing has really been done primarily because it can’t be done. Our state has major structural problems, like its Tornado Alley, its anti-education bias, its crumbling infrastructure and its almost intentional lack of modernization. Oklahoma is also tied to a slowly dying industry that is getting replaced incrementally by renewable energy, such as wind power, which doesn’t have the same economic impact or create speculative boom times like the oil patch.
I was reminded of the large and depressing picture of our state after Oklahoma State Treasurer Ken Miller released his monthly tax revenue report last week. The grim news is that overall tax revenues continue to decline as the state faces a major budget shortfall of $1.3 billion next fiscal year. The report also significantly noted that gross production taxes from the oil and gas industry haven’t been this low in 17 years. Here’s Miller’s news release. In it, he refers to the oil and gas sector here as the state’s “anchor industry.”
A major part of the reason for such a major decrease in revenue is that conservative legislators have given oil and gas companies tax breaks in recent years related to fracking so now our nightmare conundrum becomes clear. Should we root for an industry that is rewarded financially by state leaders for slowly destroying the planet through carbon emissions and quite possibly destroying our homes with fracking-related earthquakes or do we do away with the oil and gas tax breaks, which could limit production and drive down tax revenues even more?
Let’s also be clear that this conundrum was created by conservative ideology, which embraces the “drill baby, drill” mantra and low taxation for large corporations. This starving of government is intentional and calculated, although it’s never spoken in such direct terms by the GOP. See, all these tax cuts for corporations and primarily for wealthy people, according to the conservatives, are supposed to create a robust economy that will produce even more tax revenue, just like it didn’t happen in Kansas or anywhere else, and never will happen.
It won’t happen because people need schools and roads and courts and police officers in order to live in an organized and relatively safe society. If we do away with these things, then chaos ensues, and no one wants to live within it. If we privatize all of it, then we do away with fairness and human decency. Government is not a necessary evil; it’s simply necessary and foundational in a democracy. It needs to be adequately funded for democracy to flourish and personal dreams to be realized, even for those born into wealth.