Monday, May 14, 2018

OCPA column: The Slippery Three

The Slippery Three
by Jonathan Small, president of the Oklahoma Council of Public Affairs (OCPA)

Since 2015, annual taxes and other revenue taken from Oklahomans have increased by $1.1 billion. Oklahomans’ personal income taxes are up at least $185 million annually just since 2016.

Some important reforms passed this session, including enrollment audits and work requirements for Oklahoma’s expensive Medicaid program. Yet other programs proved just how slippery is the status quo when it comes to avoiding common-sense cost savings.

Oklahoma’s film industry handout is one example. The program is an actual welfare payment to cover costs for a favored business. Some of these films are never released. Others paint Oklahoma in a bad light. Perhaps the most prominent subsidized film, August: Osage County, was made by disgraced Hollywood producer Harvey Weinstein. Because of this program, Oklahomans gave Weinstein’s company $4.6 million.

Oklahoma’s Incentive Evaluation Commission found “no evidence that the Oklahoma film industry has strengthened during the time period when the rebate has been available.” The current rebate each year is $4 million, which could pay for nursing home care for 213 elderly Oklahomans or for mental health services for 1,402 Oklahomans.

A far more expensive outpost of cronyism is Oklahoma’s rebates to the wind industry. We actually pay the wind industry to come to Oklahoma and export energy generated right out of the state. Oklahoma paid out more than $70 million to Big Wind in fiscal year 2017.

The subsidies are such a sweetheart deal that the wind industry will do anything and everything to keep them–like paying for more than 40 lobbyists to lay siege on the state Capitol or apparently stalking lawmakers who oppose them. Eliminating wind subsidies would save, by conservative estimates, $70 million annually.

Finally, Oklahoma’s Tobacco Settlement Endowment Trust (TSET) offers the perfect example of mission creep. TSET grows by about $50 million every year and spends around $30 million to $40 million in earnings from its billion-dollar endowment. Its largesse has grown to the point that, in addition to some important objectives, TSET has spent $1.1 million promoting smoke-free bars and nightclubs and more than $700,000 on billboards for “water recipes.” Just capping TSET’s current endowment would give the state about $53 million in new revenues every year.

Common-sense changes to these three slippery programs could have freed up more than $125 million annually for higher priorities. But they slipped away.

Perhaps next year, legislators will finally reform these wasteful programs. Every dollar spent wastefully by these programs is a dollar that could be better used on health care for our most vulnerable and public education, including teacher pay and classroom supplies.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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