OCPA column: Saving works. What a surprise (to government “experts”)!

Saving works. What a surprise (to government “experts”)!

By Jonathan Small

Some special-interest groups suggest tax increases are the only way to deal with budget shortfalls. But Oklahomans are benefitting from a far better, preemptive solution: Saving money during boom years.

Last year, when the state had around $600 million in growth revenue, legislators were analyzing proposed ideas to increase spending. Gov. Kevin Stitt recommended setting aside $200 million of that total, a goal many lawmakers embraced.

Most families, upon receipt of an unexpected financial windfall, see the wisdom of cubby-holing some money rather than using it to increase ongoing expenses. No one buys a new house on the theory that a one-time bonus will cover the higher annual costs of a larger house payment. Yet that’s how government often operates.

Thus, Stitt’s proposal left some officials in shock.

Sen. J.J. Dossett, D-Owasso, argued, “I don’t believe we’ll have another economic downturn over the next few years. It’s just too early to start creating new savings accounts and putting money in new savings accounts.”

Sen. Allison Ikley-Freeman, D-Tulsa, said, “People are dying in the state of Oklahoma, and we’re putting money in savings for another day, for ‘just in case.’”

The Tahlequah Daily Press reported in July that Rep. Matt Meredith, D-Tahlequah, was negatively referring to the $200 million as “the governor’s slush fund.”

Oklahoma Education Association President Alicia Priest declared it was “discouraging that the budget puts $200 million into savings when we could have made a bigger investment in our schools, our students and our future.”

Despite those complaints, the bill setting $200 million into savings passed the Oklahoma House of Representatives 92-0 and cleared the Senate 37-9.

Today, due to falling oil prices and the COVID-19/coronavirus event, the state faces large shortfalls. The current-year budget may fall up to $200 million below what was appropriated. Projections suggest lawmakers will have around $600 million less to appropriate next year than what was originally appropriated for 2020 (and things may get worse).

As Stitt recently noted, being “very fiscally responsible” even when “everything looked rosy” last year has left the state with “the largest savings account” in Oklahoma history—a total of $1 billion in savings.

“That’s significant,” Stitt said, “and it’s going to help us get through this down time.”

Yes, it will. The savings decried by the teachers’ union may now protect teachers from mid-year budget cuts at schools and avoid education cuts next year. The “just in case” money decried by some may now preserve funding for Oklahoma’s health needs during a pandemic. And Oklahomans will be protected from another round of tax increases at a time when thousands are losing their jobs.

So-called “experts” often claim government financing isn’t comparable to household budgeting. The benefit of last year’s saving effort proves the “experts” are wrong, and Oklahomans should thank the policymakers who embraced savings.

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

House Dems lament failure to meet April 1st education funding deadline

I'm so old that I can remember this being a huge deal just one year ago, with the Democrats, RINOs, and the media making it a multi-week news campaign issue (let's be real, that's really all it was about, politics and winning elections).

Here's the deal -- the Legislature imposed this deadline on themselves, and has almost never met it. If they intend to make it a permanent fixture to ignore state law, then they should man up and repeal it, or follow the law that they passed. It's that simple.

Press release from the OK House Democratic Caucus follows:

House Fails to Fund Education by April 1 Deadline

OKLAHOMA CITY – A year after 20,000 teachers walked out of the classroom and into the Capitol to demand more respect and resources for public education, the Oklahoma House has failed to produce a plan to fund public education by the statutorily mandated April 1 deadline.

“We keep saying education is a priority,” said House Minority Leader Emily Virgin (D-Norman). “But our actions show that we still haven’t learned to listen to the education community. It is absurd that the legislature hasn’t met this deadline.”

The April 1 education funding deadline has previously been met twice. Lawmakers met the deadline when the law was first implemented in 2004, and the legislature met the deadline last year when 20,000 teachers flocked to the Capitol and commanded their attention.

“This body can meet this deadline,” said Rep. Matt Meredith (D-Tahlequah). “It is a choice not to meet this deadline. The majority party has chosen to run legislation that helps corporations and high-wage earners rather than legislation that puts money back into the funding formula.”

Not meeting the deadline has real consequences for school districts, especially those in rural Oklahoma that are competing with surrounding states for teachers.

“By funding education earlier in the spring, we are giving administrators the ability to hire and retain educators at time when the rest of the country is doing the same,” said Rep. Melissa Provenzano (D-Tulsa). “It also provides teachers with more financial security or more time to plan.”

Column: the facts on oil & gas taxation

This column is from Alberto Soto, a Republican small businessman from Tahlequah:

“If the facts don't fit the theory, change the facts.”
― Albert Einstein

"The people" want more money for education, for health care, for social services but they want someone else to pay for those increases. How did we as a country get to the point where it is okay to pass the burden of our wants onto others like the oil industry, business, corporations and rich people? How is this fair? How is this not just evil greed on the part of those who want it all but wish to pay for none of it?

How can I say this when the rich keep getting richer and as liberal democrats like Mr. Inman (who is running for governor) insist that it is the rich who are getting rich off the backs of the poor and middle class.

Scott Inman:

File this in the "You Can't Make This Up" category.
To date, House and Senate Republicans have refused to raise the GPT on oil and gas companies or restore the income tax cuts for the wealthiest of our citizens . . . We will not sit by quietly as the folks in charge shift the tax burden from their wealthy contributors through income tax cuts, gross production tax cuts, and corporate tax credits on to the backs of middle-class families.

or as Nick Singer says, from a post that Scott reposted on his personal page says,

Nick Singer, “Creating a low tax rate and/or grace period and/or new and not existing wells is a give away to people who don't need, on a highly profitable, finite and very volatile resource that Oklahoman's need to make hay with while they have it.”

So the rich don’t “need” to make more money because hey they have reached their limit. We the liberal elites in this state have determined that enough is enough. We need more of your money. Sorry, it’s actually not “your” money rich oil industry but it is our money because by keeping the taxes low on you we are giving it away.

The arrogance of how they talk about the oil industry and the rich is appalling.

When I read all the back and forth from our liberal democratic friends I am left thinking that these (mostly men) men are just not being honest or are grossly ignorant of the amount of taxes the “rich” are paying in this state, specifically the oil industry and how business operate and make a profit. It is my guess that most of these men have never carried a payroll or have ever run a business in their life. They go straight from law school to politics as in the case with Mr. Inman.

“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.” “Facts are stubborn things, but statistics are pliable.” “For every fact there is an infinity of hypotheses. ”
John Adams

Facts:
Oil and Gas companies are the only business that pays this creative tax called the gross production tax or GPT. On top of this tax they pay income taxes, payroll taxes, unemployment taxes, state and local taxes. The truth is that the oil industry pays about 22% of total taxes in this state. The truth is, it is the backs of the oil industry that we are building this state on. Without the oil industry Oklahoma would not be the same state. It is the one industry that has the highest taxes imposed on it. Their tax rate is 4 times greater than the average business.

Even local democrats like Representative Matt Meredith have taken up this game

“This morning the Republican party went against, not only the people of Oklahoma, but the Constitution of Oklahoma, and passed a gross production bill that would bring in one time money and not raise the gross production to 5% or 7%. They played games, did a slide of hand and let the BIG OIL companies once again control the Capitol…

We will continue the fight for our kids, teachers, elderly, health care professionals and every family within not only District 4, but also in Oklahoma. We all deserve BETTER!!!”

Matt, buddy, the oil industry is just doing what anyone should do in their place- stop the abuse and over taxing nature of government in its tracks. Big government liberals will never have enough money. It is easy to pick on “big” business and those “greedy” rich guys because most of us are not those guys.

But the people of Oklahoma have shown time and time again that they are too smart for this. There are now only 26 Democrats in the house and 6 in the senate left and if they continue on this pattern of dishonesty that will be reduced some more.

The GPT is 2% on new wells for only 3 years after which it goes up to 7%. Liberals want to increase that to 7%. and then speak like the oil industry is abusing the elderly for wanting to keep it where it is at.

“The sum of all the taxes the oil and natural gas industry pays makes it the largest direct revenue source for Oklahoma’s budget. When other Oklahoma industries pay $1 in taxes per employee, the oil and natural gas industry pays $4 in taxes per employee.”

and

“In fact, the gross production tax is only 1/5th of the total $2.55 billion in taxes the oil and natural gas industry paid to the state in FY’15. Unlike our neighboring oil producing state, Texas, the oil and natural gas industry also pays corporate and personal income taxes, which outpaced gross production tax collections in FY’15. “

The truth is Matt that the oil industry pays 22% of all taxes in this state. Instead of demonizing our neighbors, friends, and job creators we should be treating them like we want to be treated and thanking them for how much they support this state. Instead of accusing them of greed, bribery and “shenanigans” let’s be honest with District 4 and point out these facts. If you still think they don’t pay enough in taxes then make an honest case. Tell the voters why you think that $2.55 billion is not enough for you and your democratic friends when our entire state budget is about $6.9 billion.

Do you believe Matt that the oil industry should pay half of the state budget? How much is enough? What is a “fair share”? Do you really believe that higher taxes on this industry is moral and just?

Is it really smart for our state budget to be so dependent on one industry like this? I would say no way. That is short sighted, greedy and foolish.

It it time for politicians to stop acting like politicians and start treating their fellow citizens with more respect and level with us and tell us the truth.

Alberto Soto is a small business owner from Tahlequah, and writes on Facebook at Reasonable Right.