Tax Cuts Threaten Education, State Programs

Oklahoma could soon face “enormous difficulties” meeting its budget obligations because of declining tax revenues, according to the Alliance For Oklahoma’s Future, a state think tank.

“With only minuscule revenue growth to work with, the Governor and Legislature will face enormous difficulties finding the funds to address even basic budgetary obligations for the year ahead,” according to a release issued this week by the progressive leaning organization.

The Oklahoma Board of Equalization recently met and estimated the state would only have an extra $32 million to appropriate during the 2008 legislative session. This is a relatively tiny 0.5 percent increase over the $7.035 billion amount appropriated last year. The cost of funding state government normally increases 4 to 5 percent each year because of inflation and new funding mandates, according to the organization.

“It is still too early to know whether available revenues will prove adequate to fully fund a current services budget for FY '09 (continuing existing programs at current levels),” the organization notes. “If not, the Governor and the Legislature will have to confront more difficult choices, which could include some combination of tapping the Rainy Day Fund, imposing targeted or broad-based budget cuts, or identifying new revenue sources that can muster legislative approval.”

The state legislature has cut taxes recently, and these cuts and other factors have resulted in the revenue drop. The legislature has declined to replace the tax loss by creating new or bolstering existing revenue streams. Although some legislators might have believed Oklahoma’s recent growing economy would make up for the revenue loss, other politicians simply want to irresponsibly cut taxes regardless of the effect on education and state government programs. This ultimately harms the state’s economic development and quality of life, which are inextricably intertwined. Oklahoma’s ultra conservative corporate power structure and media have supported the tax cuts in recent years.

University of Oklahoma President David Boren, the alliance and other individuals and organizations have correctly called for a moratorium on tax cuts this year given the budget situation. Higher education, in particular, usually suffers the most in years of static or declining revenues, and then college students face rising tuition rates.

The state should not cut taxes this coming session given the current budget predictions.

The corporate power structure and media outlets in the state should get off the tax-cutting bandwagon this year so the state can fund its basic programs and obligations. If the budget predictions hold or get worse, continued corporate sponsorship of tax cuts should be considered reckless and irresponsible.