Unspoken State Budget Cuts?

The $7.1 billion “standstill” Oklahoma budget for the upcoming fiscal year could actually require budget cuts across state government because of rising prices and skyrocketing gasoline costs.

How rising prices will affect individual agencies will depend on what they need to purchase in order to function and how much traveling they require of their employees. If the economy continues to decline here and across the country and if prices continue to rise, the budget cuts could be quite substantial. Under a worst-case scenario, these “unspoken” budget cuts could stop new hiring among some agencies and have the potential to lead to layoffs.

In addition, the budget contains no new raises for teachers. This breaks the promise from some state leaders to raise their salaries to the regional average. Some people, like the editorial writers at The Daily Oklahoman, might shrug this off as no big deal, but the action, or rather non-action, again tells educators that they are not valued here by the state’s leaders. It gives them yet another compelling reason to seek jobs in other states.

The lack of raises for teachers and other state employees is actually a salary cut because of rising food and energy prices.

Meanwhile, Oklahoma continues to pay its teachers some of the lowest salaries in the nation. The Department of Human Services faces a major lawsuit demanding it invest more in its child welfare programs by, among other things, hiring more social workers. The state has high rates of uninsured people, and it recently led the nation in the number of hungry families.

The main issue here is the tax cuts implemented by the state legislature in recent years. These tax cuts, which lowered the income tax rate from 6.25 to 5.5, will eventually cost the state $2 billion in lost revenue, according to state Treasurer Scott Meacham. The tax cuts were part of the same tired, right-wing ideology embraced by many Republicans and Democrats alike in the legislature these days. This ideology says tax cuts grow the economy, producing new revenues. Obviously, that is not happening here.

The tax cuts can also be framed by right-wing “starve the beast” strategy, which tries to reduce the size of government by starving it through tax cuts.

But the bottom line is the tax cuts increasingly seem irresponsible because there was no effort to find replacement revenue and no real foresight about what would happen in an economic downturn. Other states are facing expected budget shortfalls for this same reason.

Restructuring the state’s tax system to eliminate the income tax altogether has always been a worthy idea, and it deserves consideration, but there can be no debate when legislators are tripping over themselves to make conservative political points.

What is most distressing is the use of the word “standstill” to describe this budget. It seems disingenuous. When you basically have the same amount of money you had last year to buy products that are rising astronomically in price, then you, in fact, face a budget shortfall.

Let us hope Oklahoma can escape the major economic distress in other areas of the country.