Monday, May 15, 2017

"The sacred cows belong next to the mashed potatoes." Mark Costello

Weekly Opinion Editorial
by Steve Fair

     In Sunday’s Tulsa World, Oklahoma billionaire oilman and banker George Kaiser wrote an editorial weighing in on the state government budget shortfall.  In a piece titled, ‘8 myths about Oklahoma,’  Kaiser , makes a case Oklahoma can tax its way to prosperity. Kaiser, a big supporter of former President Obama, is known for advocating for liberal causes.  He is also a generous man.  Kaiser has given away over one half billion dollars to various causes, most involving alleviating poverty and early childhood education.
     In the guest op/ed piece, Kaiser called the Laffer Curve the ‘laughter curve,’ stating supply side economics doesn’t work and states that tax the most have the best economy, but the facts prove otherwise.  In the 1920s, 1960s, and the 1980s, the federal government cut taxes and tax revenue increased.  A rising tide lifts all boats.  Art Laffer was right.  Kaiser also contends lowing taxes does not generate economic development and prosperity, but states with lower tax rates are growing in population at a much faster rate than states with high taxes.  It stands to reason that business and industry follow population.  When a state starts losing population, their business and industry isn’t far behind. People tend to migrant to areas with lower taxes. 
     In Kaiser’s #3 myth, he states Oklahoma government’s budget can’t be balanced by eliminating waste.  “We have long ago cast off the frills and fat and are now deep into the muscle,” Kaiser wrote.  It appears most Oklahoma GOP lawmakers agree with him.  Little or nothing has been said about identifying and eliminating waste in state government.  Lobbyists and bureaucrats have effectively convinced legislators there is nothing left to cut.  Perhaps that is case in rare instances, but why are legislators simply taking their word for it?  Wouldn’t it be prudent to fund performance audits conducted by the established constitutional office- State Auditor & Inspector- on every agency or entity that gets a dime of taxpayer dollars?  That sounds too simple of a solution, yet no one has proposed it.  Why?  The simple answer is Oklahoma government has sacred cows legislative leadership doesn’t want to take on.   As late Labor Commissioner Mark Costello used to say: “The sacred cows belong next to the mashed potatoes.”     
     Kaiser is wrong about there not being waste.  There is waste and lack of productivity in every organization.  It is not likely Oklahoma government is the exception to that rule.  Most efficiency experts estimate the norm for waste in government in general is between 15-20%.  The challenge is finding the waste, and bureaucrats are experts at hiding it.  For some reason, lawmakers lack the political will to go after the sacred cows.   Perhaps they should talk to their constituents.  A 2014 Gallup poll found taxpayers believe that government- at all levels- wastes 51 cents of every dollar they collect.  It is doubtful half of all of Oklahoma tax dollars are being wasted, but there is waste. 
     Rest assured, Kaiser doesn’t operate his businesses like state government.  In order to remain viable, he must be competitive in the marketplace and stay profitable.  When revenue is down, Kaiser must adjust staff accordingly.  He isn’t in business to lose money.   Government never has a layoff.  Seldom is an agency closed or consolidated.  Government expands.  Kaiser can afford to pay more taxes, but can the average Oklahoman who has been laid off from the oil patch?  Government should adjust to the levels of revenue available.
    Kaiser concludes his op/ed by stating the way to balance the budget is to raise taxes.  He advocates increasing the gross production tax back to 7%, eliminating wind energy tax credits, raising cigarette and fuel taxes and taxing merchandise brought over the internet.  Sound familiar?  Those are the same proposals the Republican governor and GOP led legislature have proposed.  It’s getting hard to tell the conservatives from the liberals.  Kaiser claims raising taxes takes political courage, but the truth is it takes more courage to not raise them.

1 comment:

SPR said...

Every state agency has been cut deeply for multiple years in a row. Any "waste" was shed about eight budget failures ago. How can you not acknowledge the Billions of dollars of reductions in state income for years in a row?

Even Dave Ramsey will tell you to get a second job to increase your income when facing astronomical debt. Cutting expenses only goes so far in any budget. Schools have closed, state parks are going to close and even Inhoff is warning us that the current budget will cause road work in process to stop completely.

Nobody wants high taxes but there is a point where they get too low to function. How can you honestly not look at the state we are in see the scary truth?