POSTED ON JANUARY 5, 2011:
The Unkindest Cuts of All
State leaders offer few specifics when it comes to reducing the budget
Isn't it time Oklahoma had a grown-up conversation about the kind of state we'd like to leave future generations?
I'm not talking about the sloganeering and spin that dominates 21st century campaigning or the platitudes and pontificating that permeates the legislative process.
No, I mean the kind of serious, sober -- dare I say, intellectual -- discussion that focuses on what services we agree are essential and how we're going to pay for them, all in a collective quest to help this state and its citizenry maximize its potential.
It's alternately maddening and hilarious to watch state and national political leaders duck and dodge when it comes to citing specific spending priorities.
U.S. Sen. Tom Coburn, R-Oklahoma, frequently opines that billions could be carved immediately from the federal budget and not be missed -- but he somehow never manages to offer a detailed blueprint.
Incoming U.S. House Speaker John Boehner, R-Ohio, pressed on "60 Minutes" recently to specify where he'd cut, stammered, tap danced and finally vowed to impose a 5 percent across-the-board cut on the Congress -- scarcely a thimble full of savings in the big deficit picture.
Gov.-elect Mary Fallin so far speaks only of "targeted, thoughtful reductions" that trim fat and eliminate duplication, while shielding core services like education, corrections and transportation from the deepest cuts.
And state Treasurer-elect Ken Miller suggests the state actually has plenty of revenue, it simply needs to learn to live within its means -- whatever "means" means.
The reality is, many of our elected leaders are avoiding a detailed and open conversation about state government and its priorities because they know the hardest choices are yet to come.
Sure, 15 percent across-the-board cuts in the wake of the Great Recession the last couple of years hurt. Services were cut. Furloughs were imposed. Decaying roads weren't rebuilt.
But those were inconveniences compared to what lies ahead -- particularly if the Republican-controlled Legislature and executive branch (as of Jan. 10) continue to bow to noisy anti-government wingnuts.
It's going to be years before our state revenues return to pre-downturn (2008) levels, yet the cost of providing those services continues to increase -- just like everything else.
Since very few of the state's elected leaders have demonstrated the courage to tell Oklahomans the truth -- we may need to raise, not cut, taxes because there is no free lunch -- they would seem to have little choice but to make deep cuts that undoubtedly will infuriate certain constituencies.
There is an escape hatch for state lawmakers living in perpetual fear of the next election: They can make all these difficult spending and funding issues somebody else's problem. In fact, they're already doing it.
Don't look now, but your state elected officials are quietly and cleverly shifting the cost of services to local and county governments -- which means your property taxes and sales taxes are on the verge of exploding.
Oklahoma County Assessor Leonard Sullivan, a conservative Republican, blew the whistle on the shell game in a recent letter published in The Daily Oklahoman.
"Before lawmakers start thinking of creating more incentives for business," he wrote, "it would be great if they would pay their bills first.
"A state program to pay the property taxes for five years if manufacturing jobs locate in Oklahoma is a perfect example of failed state government policies. The fund pays the businesses first and the money that's supposed to reimburse the counties for the double-homestead exemption is ignored.
"Since 2002, the Legislature has failed to reimburse counties for the double-homestead, which totals $40 million owed counties struggling to fund essential county services, including expensive jails."
Oklahoma County alone, Sullivan said, is owed $6.6 million -- $5.3 million of which "would have gone to help troubled public school budgets." The rest, he said, could have gone to "help mend some of our troubled jail woes."
"But the Legislature ignores the debt owed to counties, so it doesn't exist. If Oklahomans wonder why their schools and county governments are in need of funds to operate jails and provide essential services, look no further than the Legislature, which ignores the debts owed counties from economic development programs."
Here's how the spineless wonders at N.E. 23rd Street and Lincoln Boulevard in Oklahoma City view it: Why make the difficult choices that tend to anger constituents -- and put re-election at risk -- when you can shift the costs to the local level? Why not continue to pander to rank-and-file voters by endlessly repeating the fairy tale that we can cut taxes and fully fund state government? Why not continue to embrace corporate welfare -- $2 billion in tax breaks that haven't created a single job -- when it ensures a steady stream of campaign contributions?
Statesmanship, where art thou?
It's unlikely that local sales taxes will climb much higher. In some areas, they're already perilously close to 10 percent -- a level that conventional political wisdom suggests would light a tax revolt fuse.
Property taxes, however, are another matter. Although lawmakers have threatened in recent sessions to impose new restrictions on annual property tax increases, counties may soon have no choice but to raise them to the max every year. And it won't even be their fault. They'll get blasted when it's our state elected officials that ought to be pilloried.
You probably don't need reminding, but we've seen this movie -- horror flick? -- already.
Remember California's Proposition 13? It stopped soaring property taxes, but it ended up strangling state and local governments working overtime to help absorb a population explosion. Now, California's state budget deficit is projected at about $24.5 billion -- yes, billion.
Remember Texas? It's been home to one property tax revolt after another for decades as seniors on fixed incomes and other middle-income earners struggled to hang on to homes threatened by escalating property taxes.
One reason local government turned to property taxes is that Texas has no state income tax. Yet Oklahoma's richest (and greediest) bleat endlessly about Texas' allegedly superior tax system, swearing -- here we go again -- that eliminating the state income tax will make our state the epicenter for business expansion.
What they're really saying is this: If we eliminate the income tax, I get to keep what's mine -- and to hell with the rest of you.
But ask the average Texan -- especially those fixed-income seniors -- what they think of a system that relies way too much on property taxes. You'll hear words like "crippling," "oppressive" and "unfair."
Accuse me of class warfare if you want, but I have considerably more sympathy for those folks of modest means, struggling to hang onto their houses as they cope with staggering property tax assessments, than I do for Oklahoma's silk-stocking corporate poobahs whining about their income taxes.
They're damned fortunate to live in a nation -- and state -- where they have the freedom to pursue their dreams, outwork their competitors and keep more of what they earn than just about any other place in the world.
To whom much is given, much is required.
Arnold Hamilton is the editor of The Oklahoma Observer; www.okobserver.net.
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