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Oklahoma Faces Epic Fiscal Disaster

Don’t take away tax breaks for Oklahoma’s businesses. Take them away from Oklahoma’s working families instead.

That’s the message Republican Gov. Mary Fallin sent this week in response to a bill that in its introduced form would make steep reductions in tax-credit programs for working families and lower-income residents while suggesting more modest cuts to some tax-break programs that would affect certain businesses.

I wrote about state Sen. Mike Mazzei’s Senate Bill 977 in my last post. Essentially, the initial bill proposed $150 million in tax-credit or incentive reductions over a two-year period. The bill, which passed out of the Senate Finance Committee Tuesday but apparently won’t be specifically considered by the full Senate, is a response to the state’s budget crisis. Reductions to the state earned income tax credit, low-income sales-tax relief and the state child-care tax credit would net a savings of $106.5 million under the bill as it was introduced. These programs help out working families. The rest of the reductions—note the disparity in the amount differential—would have included a wide range of tax breaks that benefit and include historic preservation, the investment and new jobs credit, and aerospace engineering. These cuts have drawn the ire of some people in the business community and now Fallin.

Fallin issued a statement Tuesday that warned about taking away tax credits for some businesses, claiming two business projects were apparently lost or almost lost because a legislative committee was even considering trimming tax breaks. She and her office didn’t initially name the projects, but later said they were The Boeing Company projects. Meanwhile, the reduction for historic preservation tax credit was removed from the bill so we can assume the overall “savings” from Mazzei’s bill has gone down as well. Mazzei has stressed his bill is a work in progress and other changes could be made before another bill is introduced.

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Proposed Cuts Target Oklahoma Working Families

I guess it only makes sense that some members of the GOP-dominated Oklahoma Legislature want to balance next year’s state budget by, among other initiatives, reducing tax credit programs for lower-income people.

It fits with the country’s contrived conservative narrative of “makers and takers” and, on the political operative level, with what seems almost archaic now: The “starve-the-beast” ideology (check out this post) heralded by Republicans as a panacea for decades. The idea is pretty simple. See, the government is a big, bad beast, and it needs to be starved of tax dollars that go to all those awful takers, such as the hungry and poor. This starving leads to less government/beast spending. What’s tragic is that type of thinking, often earnestly deployed by voters receiving Social Security and using Medicare, is based on emotional rage created by conservative fear mongers and demonizers. It isn’t based on a realistic interrogation of facts, evidence and statistics. That’s the larger issue.

But here’s the local issue: Oklahoma faces an approximately $1 billion shortfall for next fiscal year and has already cut spending this year because of what’s getting called a “revenue failure.” It could also just as easily be called fiscal irresponsibility and mismanagement. The state also faces a major teacher shortage because of low salaries.The huge drop in revenue is because of a relatively recent history now of tax cuts for the state’s wealthiest people and the downturn in the oil and gas industry, which, of course, in recent years, got its own substantial tax breaks.

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Education Savings Accounts Not A Wise Choice For Oklahoma

Image of Oklahoma State Capitol

A couple of legislators, with support from the governor, are pushing for a sweeping school-voucher system in Oklahoma again this year, but the proposed plan could financially devastate our public schools, and with the state facing major budget problems, now is exactly the wrong time to implement such a system.

Two points need to be established before a discussion can even begin about the legislation:

(1) The vouchers are getting called Education Savings Accounts or ESA’s, but make no mistake these would be payments generated by overall tax dollars that parents can use to send their children to private schools. That’s the main point. Legislators can distort the language all they want, but what they’re proposing is a basic school-voucher system.

(2) If passed and signed into law, the law could eventually transfer a huge amount of taxpayer money to private and private-religious schools. The proposed legislation’s broader purposes, which are left unstated by its sponsors, of course, are to privatize education and endorse Christianity. It’s telling that recent forums about the vouchers were held at Mount St. Mary Catholic High School and and Bishop McGuinness Catholic High School.

State Rep. Jason Nelson (R-Oklahoma City) through House Bill 2949, and state Sen. Clark Jolley (R-Edmond) through Senate Bill 609, are resubmitting their school-voucher legislation this year. The legislation has failed to pass in recent years.

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