The Edmond Sun

Opinion

February 21, 2014

CONSIDER THIS: Oklahoma’s tax, budget policies make no sense

EDMOND — Tax cuts sound great. And in Oklahoma our governor and Legislature are all about cuts. But at some time we will have to pay the piper. Further cuts make no sense right now.

The issues are several fold. The budget process in Oklahoma is short term. Some decisions are purely politically driven. What happened to business reason? There seems to be no long-range strategic plan considering overall impacts of cuts on services and magically, if we reduce taxes an increase in business and sales will make up the difference. It sounds lie trickle-down economics, but there are too many variables. You could not run a business this way. We are headed for trouble.

First, once you cut taxes it is virtually impossible to get any consensus to raise taxes. Second, Oklahoma is already facing a $188 million revenue shortfall.

Third, if you examine Oklahoma’s history of tax revenue, however you slice the pie, a big part of revenues comes from taxes on the oil and gas industry — feast or famine depending on how oil markets go. When energy activity decreases, so does Oklahoma’s budget.

We have 7 percent tax on production. This was reduced to 1 percent on horizontal drilling as an incentive, which is set to expire in 2015, though some in the Legislature want to make it permanent. According to the Oklahoma Policy Institute, at 7 percent we have the lowest taxes in the nation on oil and third lowest on natural gas. Activity is up and energy strong. But with low taxes in all segments, what about the day when the energy cycle spins down? We will need this revenue. I appreciate the huge contribution energy makes to our economy and I am not proposing unreasonable taxes at the expense of the industry. This was an incentive. It worked. But many in the industry expect a negotiated agreement and some additional tax percentage can be agreed. But not if lawmakers freeze the tax at the lowest level.

The argument of the governor and Legislature is for smaller government. But how do you define smaller government? Government’s business includes a spectrum of services for citizens of all needs. Just like in a business, there are operating costs. In business if you cut prices too much and cannot support your infrastructure, the risk is your service to customers will suffer. Your customer base and revenue will then continue to decline. Government needs to be smart about budgeting and cuts.

I argue you can have a smaller government but it will only be strong if built by reforms and reorganizations in administrative overhead and improving operations without reducing services. Develop a strategic budget planning process, much like in business, targeting all necessary and possible additional services. Identify use of reasonable revenues looking for efficiencies, waste and adding upgraded processes. Move from a pension system to 401(k) retirement options. Cutting funding for the sake of a bully pulpit for political reasons is folly. The goal is building a government on best practices. Remembering the government is for the people.

With reduced revenues we will not achieve major improvements in key areas. Increase funding for a first class educational system, which is a first line of defense against poverty. Education is linked to economic growth. Education is an investment. Children going to school hungry is an issue in Oklahoma. Of 640,000 students in the state, 56 percent are eligible for free and reduced lunch. In Oklahoma City that rate is at 90 percent of 42,000 students.

We are in crisis losing teachers with pay 9 percent below regional averages. We are accepting rankings in the bottom 5 percent of all states for teacher pay and per pupil expenditures. Shouldn’t the focus be building our state government services and education to one of the best? Bite the bullet and review the impacts of reduced administration, transportation and facilities costs and duplications by consolidating Oklahoma’s 526 school districts — far more districts than larger states.

Denying federal aid, the governor is expecting the state to find a way to pick up Medicaid costs for 160,000 now without coverage. Many are children. She wants to consolidate agencies, which will reduce money for the arts. With deficit problems, refusing federal monies over ideology, is not well founded and agencies will be sacrificed unnecessarily.

Effectively, this short-term approach to tax cuts and poor budget planning will result in a smaller government but far less effective government. And, potentially a failure in services. Decisions today will impact us tomorrow. Step back and examine the agency expenditures, costs of services, needed areas for increased funding, find efficiencies and improve and adopt a systematic, reasoned budget process. Then develop a tactical and strategic plan to improve government and Oklahoma. The policies today make no sense. Stop the madness before it is too late.

PHIL BUSEY, an Edmond resident, is chairman and CEO of The Busey Group of Companies in Oklahoma City.

 

1
Text Only
Opinion
  • 'Too big to fail' equals 'too eager to borrow'

    Four years ago this month, President Barack Obama signed the Dodd-Frank Act into law, promising that the 848-page financial law would “put a stop to taxpayer bailouts once and for all,” he said. But recently, Massachusetts Sen. Elizabeth Warren told a Detroit crowd that “the biggest banks are even bigger than they were when they got too big to fail in 2008.”
    Who’s right?

    July 30, 2014

  • Sheltons travel for better life for family

    Some time around 1865 a mixed-race African American couple, William and Mary Shelton, made their way from Mississippi to east Texas. Nothing is known for certain of their origins in he Magnolia state, or the circumstances under which they began their new lives in Texas.

    July 29, 2014

  • Film critic Turan produces book

    Kenneth Turan, who is the film critic for National Public Radio’s “Morning Edition,” has written a book “Not to be Missed, Fifty-Four Favorites from a Life Time of Film.” His list of movies span the gamut from the beginnings of filmmaking through the present day.
    There are some surprising omissions on his list. While he includes two films, “A Touch of Evil” and Chimes at Midnight” made by Orson Welles, and one, “The Third Man,” that Welles starred in but did not direct. He did not however, include “Citizen Kane,” that was the first movie Welles made, that is  often cited by both film critics and historians as a favorite film.

    July 28, 2014

  • Logan County’s disputed zone

    Watchers of “Star Trek” may recall the episode from the original series entitled, “Day of the Dove.” In this episode, Captain Kirk and his crew are forced by a series of circumstances into a confrontation with the Klingons. The conflict eventually resolves after Kirk realizes that the circumstances have been intentionally designed by an alien force which feeds off negative emotions, especially fear and anger. Kirk and his crew communicate this fact to the Klingons and the conflict subsides. No longer feeding upon confrontation, the alien force is weakened and successfully driven away.

    July 28, 2014

  • Russell leads in Sun poll

    Polling results of an unscientific poll at www.edmondsun.com show that Steve Russell, GOP candidate for the 5th District congressional seat, is in the lead with 57 percent of the vote ahead of the Aug. 26 runoff election. Thirty readers participated in the online poll.

    July 28, 2014

  • Healthier and Wealthier? Not in Oklahoma

    Increased copays, decreased coverage, diminished health care access, reduced provider budgets and increased frustration are all the outcomes of the Legislature’s 2014 health care funding decisions. Unlike some years in the past when a languishing state economy forced legislators into making cuts, the undesirable outcomes this year could easily have been avoided.

    July 26, 2014

  • Medicaid reform a necessity

    Historically, education spending by the state of Oklahoma has been the largest budget item. This is no longer the case. In recent years, the state of Oklahoma spends more on Medicaid (operated by the Oklahoma Health Care Authority) than common education and higher education combined, according to the state’s Comprehensive Annual Financial Report.

    July 25, 2014

  • Remembering lessons from 1974

    This week marks the 40th anniversary of an important milestone in America’s constitutional history. On July 24, 1974, the Supreme Court voted 8-0 to order the Nixon White House to turn over audiotapes that would prove the president and his close aides were guilty of criminal violations. This ruling established with crystal clarity that the executive branch could not hide behind the shield of executive privilege to protect itself from the consequences of illegal behavior. It was a triumph for the continued vitality of our constitutional form of government.

    July 25, 2014

  • RedBlueAmerica: Is parenting being criminalized in America?

    Debra Harrell was arrested recently after the McDonald’s employee let her daughter spend the day playing in a nearby park while she worked her shift. The South Carolina woman says her daughter had a cell phone in case of danger, and critics say that children once were given the independence to spend a few unsupervised hours in a park.
    Is it a crime to parent “free-range” kids? Does Harrell deserve her problems? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

    July 24, 2014

  • Technology that will stimulate journalism’s future is now here

    To say technology has changed the newspaper media industry is understating the obvious. While much discussion focuses on how we read the news, technology is changing the way we report the news. The image of a reporter showing up to a scene with a pen and a pad is iconic but lost to the vestiges of time.
    I am asked frequently about the future of newspapers and, in particular, what does a successful future look like. For journalists, to be successful is to command multiple technologies and share news with readers in new and exciting ways.

    July 23, 2014

Poll

The runoff race for the 5th District congressional seat is set for Aug. 26. If the voting were today, which candidate would you support?

Al McAffrey
Tom Guild
Undecided
     View Results