Budget Woes A Stinky Mess

Image of Oklahoma State Capitol

The state’s financial situation right now is a confusing, contradictory mess.

Set aside, for a moment, the state’s pressing needs, from more school funding to repairs to the crumbling Capitol to an increase in prison guards. Take a look at the revenues, and scratch your heads like everyone else when you realize the state may face mandatory budget cuts soon.

Oklahoma has one of the lowest unemployment rates in the country, the oil and gas business is booming here and areas in the state, such as downtown Oklahoma City, are brimming with new construction and other projects that will create economic growth. Yet Oklahoma’s general revenue fund allocations were down 1.7 percent in April from the previous year and are now down 4.7 percent for the entire fiscal year. If allocations in May and June are down as well and it reaches an overall 5 percent decline or more, that might precipitate mandatory across the board cuts to most state agencies. The state currently faces a $188 million budget shortfall.

The reason for the revenue drop is complicated conjecture, according to the Oklahoma Policy Institute, but the bottom line seems to be it’s partially due to an overall drop in corporate taxes, growing tax credits for businesses and continued tax breaks for the oil and gas drilling process known as “fracking.” There are other reasons, as well, such as a rise in funding for road and bridge infrastructure, but at least taxpayers are getting something tangible out of it.

What we’re witnessing in Oklahoma is a large and noteworthy exchange of money—at least on a per capita basis—from public institutions, such as schools, to corporations and businesses. This fits neatly with conservative Republican ideology, and, of course, the government is dominated by Republicans right now, but it’s ultimately self-defeating in a state with a myriad of historical and contemporary problems.

Amid the budget woes, a new idea has emerged to tie an increase in education funding to an increase in revenues. The education-funding increase will probably be contradicted by both the ongoing tax breaks for corporations and the income tax cut recently passed by the legislature and signed into law by Fallin.

It makes no sense to pass tax cuts and then tie budget funding increases to revenue growth unless it’s an intentional act of subterfuge to appease voters by claiming dual, opposing arguments in any given political issue.

Meanwhile, concrete is falling through the ceiling at the dilapidated state Capitol building, which reeks of raw sewage in some areas. The building needs $160 million in repairs, but legislators are refusing to float a bond issue to pay for them. The symbolism is too obvious. Things are falling to pieces in Oklahoma, and it stinks.