Left High and Dry?

Make no mistake: The seats occupied by the state's leaders are getting warmer by the minute.

Oklahoma's revenue picture is careening beyond crisis and toward carnage not seen since the oil bust and the collapse of Penn Square Bank a generation ago. Although, it certainly was no picnic when Gov. Brad Henry took office in 2002, the Rainy Day Fund depleted and state finances sluggish.

As schools slash budgets, as layoffs and furloughs victimize more state workers and jeopardize essential services, and as seniors still plead for their hot meals to be restored, lawmakers from both parties are publicly exhorting House Speaker Chris Benge, Senate President Pro Tem Glenn Coffee and Gov. Henry to act.

You can bet legislators are hearing from constituents, many of whom wail incessantly about taxes and spending -- until their favorite programs are in the budget-cutting cross-hairs.

So far, all the public talk is focused on tapping the state's emergency fund -- brimming with about $600 million -- or imposing deeper budget cuts that no doubt will affect more state workers and more services.

While the government-haters in the Legislature are rejoicing over a golden opportunity to shrink what they regard as The Beast, the really smart guys know that layoffs, furloughs and reduced services actually could prolong the state's recession and slow its recovery.

It's virtually impossible to raise taxes thanks to State Question 640 that requires either a super-majority of legislators supporting an increase or a statewide vote of approval. And it's doubtful Henry and the current crop of legislators who cut taxes $770 million when coffers overflowed would be willing to even take on such an uphill battle.

So it stands to reason that legislative leaders soon will be in search of more revenue -- you can only cut so much, after all. The trick is identifying revenue generators that appeal to the average Oklahoman who's been convinced by the very same legislative majority that taxes are too high and government must be cut.

Lawmakers could look first at eliminating some of the corporate welfare they've heaped on their favorite campaign contributors: $100 million over four years for energy exploration and deep drilling (can you say Chesapeake?) and $60 million for Oklahoma City's NBA franchise (owned by some of the state's deepest, most influential pockets).

Or they could revisit a fascinating proposal by then-state Rep. Jerry Ellis, D-Valliant, who -- the last time Oklahoma's revenue shortfall was in the hundreds of millions -- suggested an increased tax on soft drinks, the equivalent of less than two cents on a 12-ounce pop.

Ellis' plan would have generated about $60 million a year in new state revenues -- money that could have been doubled if matched with federal dollars for things such as bridges, roads or health care.

The GOP House leadership bottled up the proposal in committee, delaying action until heavyweight soft-drink industry lobbyists could jet into Oklahoma City and apply serious pressure. The pop poobahs warned ominously that a two-cent hike was more than many everyday Oklahomans could afford. Seriously?

The corporate stranglehold on the Legislature's Republican majority is so complete that it's doubtful Ellis' idea -- he now serves in the state Senate -- would get a serious hearing, even if he were inclined to pursue it again.

Where will the money come from to salvage essential services?

I'm afraid the old saw "desperate times call for desperate measures" could come into play, meaning that legislative leaders -- feeling the heat -- could revive their past efforts to sell Oklahoma water to Texas.

It's not that I'm for or against selling excess Oklahoma water to Texas. It's just that we're not entirely certain we have excess water to spare. A comprehensive statewide water plan -- researching what Oklahoma has and what it will need for generations -- is due to be completed in 2011. It's worth waiting for before making any decisions -- especially since history shows that once a state starts shipping water to another, it's nearly impossible to turn off the spigot, even if drought or other calamity leaves the providing state high and dry.

Still, the state's water bounty may be too tempting for legislative leaders to ignore in the face of what appears will be a long-term financial drought.

Former Gov. David Walters, for one, cites previous Oklahoma Water Resources Board research to argue Oklahoma has plenty of water to meet its future needs and to sell North Texas what it needs -- at a price that will hasten Oklahoma's economic rise.

The state agency estimated an average 1,300 million gallons spill over the dam each day at Hugo Lake -- "lost forever to the brine" of the Red River. "That is 40 percent to 50 percent of all the water used in Oklahoma," he said.

Oklahoma's financial windfall from a water sale, Walters said, could be astronomical -- even if it sold only the Hugo spillover. For example, he said, Colorado farmers sold their water rights to Las Vegas in 2007 for as much as $12,000 per acre foot, the equivalent of $37 per thousand gallons. If Oklahoma sold its Hugo spillover for only $1 per thousand gallons -- more than Texas previously offered -- it could generate $474 million annually.

The two states are fighting it out in federal court over whether Oklahoma can be forced to sell. A judge in Oklahoma City last week tossed out the Texas lawsuit, but it's far from dead. A similar suit -- involving a Hugo plan to sell water to Texas -- is still alive in Muskogee federal court.

Of course, the state's tribes also contend they have a historical -- and thus, financial -- stake in the state's water supply, a matter that also would likely end up in federal court.

Sen. Ellis thinks water is the key to Oklahoma's future, so he's adamantly opposed to selling to Texas. "Growth will go where the water goes," he said. "We don't want to be a water plantation for someone else."

The truth is, water is the new oil -- the 21st Century's most precious natural resource. The short-term (relatively) economic crisis is no excuse for anyone in state government to even think of cutting a (long term) water deal, just because it will help soften the current financial woes.

Will it remain off the table until 2011?

-- Arnold Hamilton is editor of The Oklahoma Observer; www.okobserver.net