Where is the Waste

Weekly Opinion Editorial

WHERE IS THE WASTE?

by Steve Fair     

     In a recent poll conducted by SoonerPoll, Oklahoma voters were asked if they were in favor of eliminating tax credits to offset a decrease in the state income tax.  Fifty two percent were in favor with twenty four percent undecided.  A follow up question asked voters if they were in favor of phasing out the state income tax over a ten year period.  Fifty one percent were in favor with twenty percent undecided.  Just fifty one percent of Oklahomans wanted to eliminate the state income tax?  Why wouldn’t everyone be in favor of not paying a tax?

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     The primary reason is because the average citizen in Oklahoma doesn’t trust government.  They have been lied to before, so they are skeptical when government says they are going to cut out a large revenue stream without a plan to cut on the other side of the ledger.  The state income tax currently represents twenty seven percent of the state’s revenue. 

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     Republicans believe the uplift from putting more money back into taxpayers pockets will keep the revenue stream steady and make cuts unnecessary.  The theory, known as supply side economics, worked under Reagan.  Taxes were cut and government revenue went up.  As Reagan said, “A rising tide lifts all boats.” That may be the case, but Oklahoma government needs to get right sized and this is the perfect opportunity to do it.

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     Oklahoma legislative Democrats don’t want to eliminate the income tax because they don’t believe in smaller government.  Liberals never want to give back any money to taxpayers and are willing to use scare tactics to prove their point.  In an interview with The Oklahoman, House Minority Leader Scott Inman, (D-Del City) said, “I'm convinced that when the income tax is eliminated in Oklahoma, those monies that were once used for roads and bridges and education won't be there from the general revenue fund.  The counties in order to fund their schools and roads will have to increase property taxes to make up the difference. An income-tax cut at the state level will invariably lead to a property tax increase at the county level.”  Inman has no evidence that property tax increases would be the mechanism government would go to if elimination of the income tax created a shortfall.  In fact, the Oklahoma constitution prohibits a ‘statewide’ property tax.  Who knows what state government would do to make up a revenue shortfall.  As Yogi Berra said, “It's tough to make predictions, especially about the future.”

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     Elimination of the state income tax in Oklahoma is a bold move.  But at the same time we eliminate, we should work to get Oklahoma government growth under control.  In the recent past, when faced with a budget shortfall, the legislature has simply made across the board cuts at state agencies.  That’s unfair to state agencies who run their operations efficiently and rewards agencies who are wasteful.  “One size fits all,” is not a sound strategy in a budget. 

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     Oklahoma agencies should have to justify every single penny they get each year from the taxpayer.  Zero based budgeting should be implemented.  Zero based budgeting is an approach to planning and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting, agency heads justify only variances versus past years, based on the assumption that the "baseline" is automatically approved. By contrast, in zero-based budgeting, every line item of the budget must be approved, rather than only changes..  Zero based budgeting would help the legislature to identity waste. 

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     Another way to identify fraud, waste, and duplication in state government is by empowering the State Auditor to conduct performance audits. Performance audits refer to an examination of an agency that accesses whether the entity is achieving economy, efficiency and effectiveness in the employment of available resources.  In other words, a performance audit doesn’t just make sure the books balance, but evaluates if tax dollars were spent in a proper way.  A bill to amend the state constitution to authorize the State Auditor to do performance audits failed to make it to the floor for a vote this session.  It makes you question the legislature’s resolve on finding waste if they will not authorize the duly elected State Auditor to do performance audits.   

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     The Oklahoma legislature is currently considering several versions of bills that would phase out the state income tax.  In this final month of session, you will hear a lot about these bills and how important they are to Oklahoma’s future.  Elimination of the income tax should be balanced with the rightsizing of Oklahoma government and the first place to start is identifying waste.