Something for Nothing

It's not necessary for the Centers for Disease Control to undertake a formal study -- we already know that Oklahoma suffers an epidemic of taxus disconnectus.

That's the malady in which folks from all walks of life, whether rich or poor, educated or illiterate, seem positively oblivious to the link between the taxes they pay and the government services they receive.

In one breath, they rail about high taxes -- even though Oklahoma's overall tax burden is among the nation's lowest -- and in the next, they demand quality roads, bridges, schools, law enforcement and child welfare protections.

Unfortunately, the disconnect between taxes and services seriously complicates the panel's -- and eventually, the Legislature's -- efforts to simplify state tax law and improve fairness.

Why? It's difficult enough to enact good public policy when well-heeled special interests are pushing non-stop to protect their places at the taxpayers' trough. It's even harder when the public at large demands more for less.

Is "miracle worker" a qualification for appointment to the 21-member task force?

We've done too many things on the cheap in Oklahoma over the years, reflected in our crumbling infrastructure (think dilapidated school buildings and crumbling bridges, as prime examples).

Even worse, we've spent way too much money on things that fatten already fat cats (tax breaks, credits and incentives) and not enough on things that help produce happier, healthier, more productive -- and taxpaying -- citizens (education, drug courts and mental health services, just to name a few).

The conventional wisdom around the coffee shops in Oklahoma is there's still too much fat and waste in government. That almost certainly is true. But this is also true (and not acknowledged often enough): There's much less fat and waste than ever.

The facts: State revenues are 13 percent less than they were in 2008 and most agency budgets have been cut significantly to meet the constitutionally-mandated balanced budget. Some agencies have been consolidated; all have learned to live with fewer employees and resources.

It's one thing to be skeptical about government, it's another thing entirely to be cynical. Several years ago, legislative Republicans were hell-bent on proving the corrections department was bloated and incompetent. They just knew private enterprise could do a much better job. So they insisted on hiring a firm with expertise in corrections to audit the Oklahoma system.

What did the audit determine? The state corrections department was doing a helluva job on a shoestring budget -- effectively squeezing far more out of each buck than the taxpayers could have expected. And doing it less expensively than a private firm could.

Here was the real kicker: The auditors -- the Republican-selected and Republican-approved auditors -- urged the state to devote more money to the state corrections system. Three-quarters-of-a-million dollars was spent for the audit -- and the recommendations were trash-canned because they didn't meet the preconceived notions.

Now, the new task force will begin looking at the entire tax system, including recommendations from a joint legislative committee studying tax expenditures -- the $5 billion-plus in annual tax credits, breaks and incentives, many of which amount to nothing but corporate welfare.

I will stipulate there is evidence that some of these breaks are beneficial -- they help create jobs and taxpaying citizens and generally help raise the standard of living.

Others, though, are nothing more than a legalized looting of the state treasury, a payoff to campaign donors who in some cases invest thousands of dollars in key politicians yet reap millions of dollars in tax incentives.

Remember, an estimated $2 billion in taxpayer-financed goodies never created a single job.

Sen. Mike Mazzei, R-Tulsa, and Rep. David Dank, R-Oklahoma City, are leading a systematic review of these deals -- which can most accurately be described as government spending. It's tax dollars that are being funneled into private pockets -- just as if we were spending the money hiring teachers, building bridges or guarding inmates.

Next, Mazzei and Dank will spearhead the review of the entire tax system. The silver-haired Dank, in particular, is interested in looking at property taxes -- and whether the state should limit annual increases.

It's a serious issue, not only for seniors on fixed incomes (who might find themselves priced out of the homes they've lived in for decades), but also because California is Exhibit A of what happens when you artificially (Proposition 13) tie the hands of future generations (the state's budget hole is approaching $30 billion next year).

In addition, you can bet state leaders will be pushed to take a page from Texas' sorry public policy history and eliminate the state income tax -- the fairest tax of all. If they succumb to the pressure, they'll have to replace the money -- about 40 percent of state revenues -- somehow.

They likely would turn to the most regressive tax of all -- the sales tax -- which disproportionately hits the least well off. Or they could adopt a Texas-style system that relies on hefty property taxes. After all, the money to build roads and schools and hire Highway Patrol troopers has to come from somewhere.

The problem for the state's elected leaders is this: They are attempting to solve the state's tax problems with the equivalent of one of their hands tied behind their backs.

Thanks to the simple-minded rhetoric -- designed more to inflame than to inform -- far too many of our fellow Oklahomans now know the cost of everything and the value of nothing. And they think -- voodoo economics, anyone? -- you really can cut taxes and increase revenues or that you can reduce revenues and upgrade services.

As a result, some lawmakers live in mortal fear that demagogues will flog them in the next election if they dare mention the "T" word.

Case in point: Nary a peep out of most legislators this year when an automatic quarter-percent cut in the state's income tax rates was allowed to take effect -- even though it will end up costing the state $120 million in revenue at a time of draconian budgets.

Thinking legislators -- I'm excluding the crackpot caucus -- knew the state could ill-afford the lost revenue. But they weren't about to stand against the anti-tax tide. Leadership, where art thou?

Will we ever see the day that enough legislators are willing to stand up and tell Oklahomans the truth -- the whole, unvarnished truth?

To get the state where it hopes to be in future generations, a place that truly beckons the brightest minds and most innovative companies, it's going to take investment -- in education, in infrastructure, in public health. It's going to take efficient governments. And it's going to take m-o-n-e-y.

The sooner the taxpayers come to grips with their taxes-services disconnect, the sooner their elected officials can get to the business of solving the state's problems.

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