POSTED ON MAY 19, 2010:
A Corporate Welfare State?
What does the legislature want, a Great, Big, Fat Greek Funeral?
There is still time for the Legislature's Republican majority to do the right thing.
This year's session isn't required to wrap up until May 28, leaving ample time to spare vital state services -- and thousands of state jobs -- from painful, totally unnecessary cuts that will haunt Oklahoma for generations.
Will GOP leaders come to their senses? Are they willing to lay aside their fealty to the Ronald Reagan, Grover Norquist, drown-the-evil-government-in-a-bathtub orthodoxy and acknowledge that real people -- their neighbors, children and those needing a hand-up, not a hand-out -- would be brutalized by a government-hating, cut-at-all-costs approach to governing?
You see, there's absolutely no reason to fire 5,000 teachers and cram our children into classes with 30, 40 or more students. There's also no reason to force 5,600 people into nursing homes -- the most expensive treatment option -- because of cuts in home health care funding.
And there's no reason to leave millions in federal matching dollars untapped just because a few hardheads in leadership equate a provider fee on hospitals -- a fee endorsed by the hospitals themselves and already imposed in 20 states -- to a tax increase.
The truth is, the state's budget woes are easily solved: Repeal, delay or freeze some -- repeat, some -- of the $5.6 billion in tax credits that state lawmakers enacted to reward special interests (translation: deep-pocketed campaign donors) during times of plenty.
It's worth noting that corporate welfare historically has been a favorite tool of both political parties in Oklahoma. It was a problem when Democrats controlled both houses of the Legislature. And it's been an even worse problem since Republicans gained a majority in the House in 2004 and the Senate in 2008.
Nonetheless, the pressure is building for the Legislature to take a serious look at tax credits, particularly corporate welfare.
When the 2010 session opened, legislative leaders dismissed by fiat any possibility of rolling back tax breaks. As the magnitude of the $1.2 billion budget crisis became clear, legislative leaders sought to pacify those who demanded the tax credits be scrutinized publicly -- one-by-one -- by agreeing to study the matter during the out-of-session months.
Now, however, the Legislature's top budget writers, Sen. Mike Johnson, R-Kingfisher, and Rep. Ken Miller, R-Edmond, are both saying publicly that all tax exemptions are on the negotiating table as legislative leaders and the governor seek to craft a 2010-11 state spending blueprint. The governor's chief budget negotiator, state Treasurer Scott Meacham, described some "pretty good discussions" over ways to increase state revenues, including possible changes involving some of the state's 450 tax breaks.
Evidently, though, there is at least one sacred cow whose tax credits won't be considered for repeal or moratorium: the oil and gas industry. The Oklahoma Tax Commission estimates energy producers could tap the state treasury for about $150 million in drilling rebates during the next fiscal year.
Let's call it what it is: The Not-So-Free Enterprise System. Lawmakers are using taxpayer money to bolster the bottom line of an industry that is doing just fine on its own. Just ask Tulsa oilman and banker George Kaiser, who bravely advised lawmakers last year that taxpayers deserve the breaks more than the oil and gas industry.
All business ventures carry risk. There are few sure things. It is true, for example, that natural gas prices are sluggish. And some experts predict we won't see a typical summer driving season spike at the gas pumps that help burnish oil company bottom lines.
But before you start spinning me about all the tax-paying jobs the industry creates -- which it does -- it's also worth noting the 5,000 or so teachers whose jobs are in danger, including nearly 300 in Tulsa who received pink slips last week, are tax-paying citizens, too. So are the state employees whose paychecks are shrinking because of furloughs resulting from 7.5 percent across-the-board cuts that seem destined to reach 11 percent or more unless legislators man-up and make the tough choices.
The problem is, the GOP's legislative leadership has shown its true colors since seizing control of both houses. They don't like government, except when it can benefit the wealthiest among us. They want to starve the beast to ensure it can't do the job, then out-source the duties to the businesses operated by their well-heeled friends.
With willing accomplices in a Democratic governor and half-assed Democratic legislators, they rammed through $700 million-plus in tax cuts that mostly benefited the wealthiest Oklahomans -- knowing full well that State Question 640 makes it all but impossible to ever raise taxes, even when an economic calamity rivals the Great Depression.
At the same time, they all but wet themselves whenever anyone conjures up a new scheme to further loot the state treasury -- cleverly sold, naturally, as job-creating, business-growing, economy-boosting tax incentives. The problem is that too many didn't create anything -- jobs, airlines, automobiles -- except a direct draw from the state treasury for a privileged few.
Welcome to the second Gilded Age, Oklahoma-style.
Asked why lawmakers won't touch the $150 million in energy industry tax incentives, a Republican lawmaker leaned over, out of earshot of other legislators, and matter-of-factly described the Legislature as "a wholly-owned subsidiary of the oil and gas industry. How's that for an honest answer?"
Yet, the GOP in Oklahoma has brilliantly tapped into anti-government Tea Party resentments, carefully steering the focus to national issues, especially a Democratic president and his health care policies.
Oklahoma's Tea Party crowd has been had. And they don't even know it. Much of their furor reflects traditional populist resentment of a rich and powerful elite and its oppression of the proletariat. Yet, while teabaggers obsess over conspiracy theories involving Barack Obama's birth certificate and religion, Republican legislative leaders have engineered what is arguably the greatest transfer of public wealth to private interests, both individual and corporate, in Oklahoma history.
The $5.6 billion in tax breaks is nearly as much as the entire state budget projected for 2010-11.
Like it or not, rank-and-file Oklahomans must accept their share of the blame for this mess. Most are woefully ignorant of what is occurring at the state Capitol. They make no connection between taxes and services. Roads and bridges don't just appear magically, you know.
Far too many can tell you about Rush Limbaugh's latest ranting or Glenn Beck's weeping. And they know all about country couple Blake Shelton and Miranda Lambert's pending nuptials, 12-year-old YouTube sensation Greyson Michael Chance of Edmond and who's expected to start at quarterback next year for OU and OSU.
How bad must it get before Oklahomans begin to pay attention to their state lawmakers -- and hold them accountable?
-- Arnold Hamilton is editor of The Oklahoma Observer; www.okobserver.net
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