Federal Programs Underpin State Success

Image of Thomas Hart Benton work

The official mantra from many Oklahoma Republican and corporate leaders over the last two years or so is that the state is a national “success story” for the way in which it has weathered the 2008 economic downturn.

Another trope that has surfaced these past two or three years is based on the idea that Oklahoma has much to teach Washington, D.C. and President Barack Obama about the way to operate a government.

This, for example, is what Mary Fallin had to say about that issue in her last State of the State speech:

People all across the country are noticing: Oklahoma stands as a testament to the fact that low taxes, limited government, and fiscal discipline are a recipe for job creation.

Our success stands in stark contrast to the record of dysfunction, failed policies, and outrageous spending that occurs in Washington, D.C.

In Oklahoma, we could teach Washington a lesson or two about fiscal policy and the size and proper role of government.

But while it’s true that the state’s unemployment rate remains low—even despite a small rise in July—Oklahoma is hardly an economic miracle or a textbook example of what to do or not to when times get tough. There also remain major problems and the state has hardly recovered from the 2008 downturn.

Let’s outline some of those problems, and see how the federal government in some cases has helped Oklahoma through the largest economic downturn since the Great Depression.

  • Unemployment. There is no argument that Oklahoma has one of the lowest unemployment rates in the country, but, still, the rate rose from 4.7 percent in June to 4.9 percent. Compared to the national rate, which has hovered above 8 percent, this is still pretty good in a relative sense. However, the increase in July does mean 2,860 more people are without jobs, according to Business Week. And let’s not forget the federal government has offered benefit extensions throughout the crisis, helping states cope with the long-term unemployed.

  • Tax Revenues. Oklahoma’s July tax revenues only rose by 1.6 percent over last year, and overall they “have yet to fully recover from the collapse that accompanied the last economic downturn,” according to David Blatt, director of the Oklahoma Policy Institute. Blatt points out that July revenues were 15 percent below what they were four years ago. That 15 percent is a huge number, and the overall decrease in tax revenues has meant devastating cuts in state government and education. Teachers have lost their jobs and educational positions have been eliminated in school districts throughout the state. It could have been worse, though. Fortunately, the federal government’s American Recovery and Reinvestment Act helped Oklahoma prevent even more cuts to its budget.

  • Supplemental Nutrition Assistance Program or SNAP. SNAP benefits, formerly known as food stamps, have increased dramatically in Oklahoma during the economic crisis. SNAP is funded completely by the federal government. The numbers are staggering. Last year, the Tulsa World reported that 622,991 people were receiving assistance. At that time, and this is truly a telling number, 30 percent of the state’s children were getting at least some food through SNAP. Fortunately, this federal program probably helped to save lives and develop healthier children in Oklahoma.

  • Doctor Shortage. KOSU, part of the National Public Radio network in Stillwater, ran an insightful piece by Ben Allen recently that showed the state faces a major doctor shortage. Allen reported the state needs two thousand more primary care physicians just to reach the national average. If the Affordable Care Act remains intact, “hundreds of thousands in the state could gain insurance coverage,” according to Allen. The solution remains unclear. What is clear is that state Republican leaders are dragging their feet on what could become a serious issue as they wait for the results of the 2012 presidential election. Oklahoma stands to gain in a big way with the ACA in terms of medical access and outcomes, yet another federal initiative.

  • Wildfires, Drought. More than 600 homes were destroyed in the recent devastating wildfires in Oklahoma, and the extended drought continues to take its toll on the state’s agricultural production. The federal government will pay 75 percent of the firefighting costs for the recent fires, and Fallin has requested additional federal disaster assistance. Fortunately for Oklahoma, President Obama recently announced the federal government was going to provide $30 million more in drought assistance throughout the country.

This is just a partial list of why Oklahoma might not be the type of ‘success story” that Fallin wants it to be, and it also shows the federal government’s involvement in whatever success we do have here is readily apparent to anyone who can get beyond the conservative sloganeering and political tropes.

As I pointed out in my last post, Oklahoma continues to receive more money back from the federal government than it pays in federal taxes, according to 2010 statistics. That means people who live in “donor states,” such as Massachusetts, continue to bankroll whatever success that we do have here. There’s nothing necessarily wrong with that on some level, although some donor-state residents no doubt see it much differently. But this much is clear: Oklahoma is highly dependent on the federal government.