Monday, May 29, 2017


Weekly Opinion Editorial
by Steve Fair
     What is the difference between a tax and a fee?  A tax is a compulsory payment levied by the government on citizens and business.  A fee is a ‘voluntary payment’ to the government for services rendered by the government, but the person paying the fee gets something in return- ae; a pack of smokes, a car or a gallon of gasoline. 
     In 1992, a group of concerned Oklahomans, who were sick of the Democrat led legislature taxing them without any recourse, stood in front of Wal-Marts and other retailers gathering enough signatures- 233,832 to be exact- to get State Question #640 on the ballot. It required all ‘revenue raising’ proposals be approved by a vote of the people or pass both chambers of the state legislature with a ¾ majority.  SQ #640 was approved by Oklahoma voters in March of 1992 by a 56%-44% margin.  Since its passage, legislators from both Parties have tried to circumvent it and raise taxes without the super majority or a vote of the people.
     The legislature adjourned on Friday after passing a $6.8 billion budget that raised fees on cigarettes, vehicle purchases and sports tickets.  The vote to approve was less than the ¾ majority needed to satisfy #640, so it is a certainty the fee increases will be challenged in the courts.  The budget left common education flat, and resulted in most agencies getting a -4% cut.  The fact is many state agencies have enough revolving fund monies that the cuts will be minimal.   
     How did we get to the point in Oklahoma where Republican legislators ignore the law and pass revenue bills with a simple majority and ignore the state constitution?  Every one of the Rs campaigned on reducing the size of government, but a significant group of them voted to keep it the same size.  Even more disappointing was these so-called conservatives celebrating and declaring this was the best they could do.  Really? 
     In April, Goldman Sachs said they expect the price of oil to stabilize at or around $50 a barrel.  There has been a steady rise in drilling activity since last fall due to the stability in prices.  Because Oklahoma government is so dependent on the gross production tax to operate, it stands to reason, Oklahoma government will get more money to appropriate next year.   And like this year, the legislature will spend every dime it takes in and try to get more. 
     Those brave Oklahomans who stood in front of Wal-Mart in 1992 and gathered signatures for #640 did every Oklahoman a solid.  At the time, most of the activists believed if Republicans got control of the legislature, things would be different.  Sad to say, that hasn’t been the case.  Big government advocates are in both Parties.   Without SQ#640, Oklahoma citizens would have had no recourse, but because some people cared enough 25 years ago to do more than gripe, this will likely be struck down. 

Monday, May 22, 2017


Weekly Opinion Editorial
 by Steve Fair
     The Oklahoma state legislature met last Saturday in a rare weekend session in an attempt to work out a budget.  With the end of the fiscal year looming (June 30th), and the state constitution regarding a balanced budget, the decline in revenue has presented lawmakers with a challenge.  After enough Republican conservatives rebelled and would not vote for increases on cigarettes and gasoline, legislative leaders reached out to the Democrats to convince them Oklahoma state government needs more money and that partnering with the Rs would be in their best interest.  Using the opportunity, House Minority leader Scott Inman twice walked out of negotiations with the Governor and Republican legislative leaders.  Inman, who has announced he is running for Governor, held a news conference after one walk-out, so it was an obvious staged event.     Several state lawmakers say they are headed for a ‘special session,’ to get a budget passed.  If the past is any indicator, Oklahomans will get tax increases and agencies ‘across the board’ cuts to balance the budget.  That is the only way they know.
Three observations about Oklahoma’s budget woes:
     First, when is Oklahoma government going to learn?  State government and our state’s economy are so dependent on the energy sector.  When oil and gas prices decline, revenue goes down and cuts to agencies are double digits.  When times are good, state government is lighting cigars with hundred dollar bills and giving raises to every bureaucrat they can find.  A permanent long term solution to insure proper funding of core services should be devised.  It can’t be done in a legislative special session.  It must be a well thought out, devoid of emotion solution that levels the revenue stream and takes out the peaks and valleys the current system has. 
     Second, why hasn’t every agency been audited, including Higher Ed (especially Higher Ed)?  It’s because the legislature and the Governor don’t really want to know where the waste is.  It has to be.  If they really wanted to know, they would have funded the Auditor’s office early in the 2017 session.  They would have asked them to expedite the audits and then after careful analysis, appropriate the bare minimum amount of tax dollars needed to provide core services to the agency.  This revenue shortfall was not surprise.  When the legislature convened, they knew it was going to be a short budget year.  To blindly believe the only solution is to propose more taxes and fees is not the conservative way to govern.    
     Third, times are tough in Oklahoma.  We have one of the highest unemployment rates in the country.  Our teachers are underpaid.  The butchers, bakers and candlestick makers fortunate enough to have a job, are also underpaid.  Our economy has faded faster than a Thunder lead in the third quarter.  In 2018, a number of people will throw their hat into the ring to run for Governor, Lt. Governor, and state legislature.  Ask them three questions: (1) What will they do to help us avoid these dramatic downturns in our state? Will they go out and help existing Oklahoma businesses grow? Will they recruit business into the state that will provide stable jobs for Oklahomans?  (2) Will they support auditing every agency, organization, association, anthill, or rat hole that gets one penny of Oklahoma tax dollars?  It is past time for that to be done and until we have a Governor who will request those audits be done, we are simply taking the word of a bureaucrat they are spending our money wisely.  Time to trust, but verify.  (3) Will they support reducing the total government footprint in Oklahoma?  This may mean reducing the number of state employees.  It may mean closing or consolidating state agencies.  It may mean consolidating school districts or sharing administrative function.  Bear in mind that no Republican, in their right mind, campaigns in a primary on a platform of higher taxes and bigger government, so don’t be surprised when every R candidate answers in the affirmative to all three questions.
    Your mission- should you choose to accept it- is to determine which candidate will actually do what they say they will do.  You can call it Mission Impossible. 

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.

Monday, May 8, 2017

The Kingdom of Darkness is going to do what the Kingdom of Darkness does!

Weekly Opinion Editorial

by Steve Fair

    In 1954, then U.S. Senator Lyndon Johnson, (D- Texas) authored a bill that prohibited all 501(c) (3) organizations from endorsing, opposing or engaging in any political activity.  Johnson’s target wasn’t churches.  He was trying to stop billionaire H.L. Hunt from using his non-profit foundation to run a campaign against LBJ in his Texas Senate re-election bid. 
     Because most churches are tax exempt organizations, LBJ’s amendment made them fearful of an IRS audit, so most ceased engaging in the political arena after 1954.  The fact is, the IRS has only pulled the tax exempt status on one church in all those years, but liberals have used the amendment to publically expose churches and pastors who engaged in conservative politics.  Liberals partnered with their media brethren to accuse churches that were political of breaking the law.  Not surprisingly, these zealous watchdogs haven’t been as vocal about liberal churches and pastors involvement in politics. 
      Last Thursday on the National Day of Prayer, President Trump signed an Executive Order directing the IRS to not take ‘adverse action’ against churches or pastors who engage in political activity.  "We will not allow people of faith to be targeted, bullied or silenced anymore. And we will never, ever stand for religious discrimination. Never, ever," Trump said.  Trump’s actions, in effect, stopped the enforcement of the Johnson amendment by the IRS. 
     Many conservatives greeted the news as a great victory.  “On Sunday, go and tell your pastor that its time to get engaged in politics,” an Oklahoma GOP leader said Saturday at the state GOP convention.  Three observations about Trump’s action and the Johnson amendment:
     First, the Johnson amendment should be repealed.  It clearly violates the first amendment.  If a church or pastor wishes to engage in politics they should have the right to do so in America.  They should be able to organize their church to help a campaign, preach politics from their pulpit, and decorate their sanctuary with campaign signs without fear of the government auditing their books and taking away their tax exempt status.  The Johnson amendment clearly violates their right of free speech.  Trump’s EO is just a temporary fix.  Congress should repeal the Johnson amendment and get it off the books. 
     Second, Trump’s action will likely lead some churches to organize and become more political.  Critics of Trump’s action believe conservative churches will solicit tax exempt contributions that will be used for political purposes and that will lead to more ‘dark money’ groups.  ‘Dark Money’ groups are defined as those involved in politics whose contributions are next to impossible to track.  That is certainly a possibility.  Some churches will ‘launder’ money from their membership to political causes, but liberal ones are doing that now.  It’s the conservatives that have been muzzled.  Rabbi Jack Moline, a liberal Jewish cleric, expressed the fear of the left: "President Trump's executive order will clear the way for the Religious Right to weaponize their churches for partisan battle."  
     Some ministers and churches- both liberal and conservative- have built their ministry on politics.  Attending a worship service is like going to a political rally.  If that’s their bailiwick (political ministry), so be it and now Trump’s actions will likely energize them and allow them to take their activism to the next level.  
     Third, just because a church can be political, should it be?  What is the scriptural mission of the local church?  Jesus gave the church its marching orders on the Mount of Transfiguration (Matt. 28:19).  That mission is to ‘preach the gospel’ throughout the world.  The good news(gospel) is the means God uses to reconcile man to Himself.  The gospel is the only message God blesses.  The gospel changes lives, cultures, and nations.  Churches and pastors who abandon preaching the gospel to preach conservatism will reap converts to conservatism, not to Christ.  The hope of America is not for churches and pastors to abandon their calling to become more politically involved.  The hope of America is the faithful preaching of the gospel.  The gospel is the only thing that eternally changes hearts and lives.  Far too many churches and pastors have abandoned reverence for relevance.  They fear man more than God.  They are consumed with the kingdom of darkness rather than the kingdom of light.  As John MacArthur says: ”The kingdom of darkness is going to do what the kingdom of darkness does.”  That is true whether a conservative or a liberal is in power.   

Monday, May 1, 2017

Rs starting to look & sound a lot like Ds!

Weekly Opinion Editorial
by Steve Fair

    On Monday, the Oklahoma legislature’s Joint Committee on Appropriations and Budget met and passed HB#2365 authored by Representative Leslie Osborn (R- Mustang) and Senator Kim David (R- Porter).  The bill if passed by the legislature and signed by the Governor would increase the tax on cigarettes by $1.50 per pack. Half of the money would go to the Health Care Authority Enhancement Fund and 23% would go to the Mental Health and Substance Abuse Services Enhancement Fund.  HB #2365 also increases gasoline and diesel fuel tax by six(6) cents a gallon.  It is estimated the two tax hikes in #2365 would generate an additional $340 million dollars in revenue for the state.  I thought it was dangerous to smoke and fill up with gas?  Attorney General Mike Hunter has issued an opinion that HB #2365 doesn’t violate the ‘logrolling/dual subject’ provision in the State Constitution, but the final decision on that will be up to the State Supreme Court. 
     The Joint Committee also considered four other revenue bills, including SB#2369, which would increase the amount of excise tax Oklahomans will pay when they tag a new vehicle.  If implemented, it is expected to generate another $12 million a year into state coffers.  Osborn says without the increases in HB #2365, Oklahoma will not have the funds to provide basic core services like public safety.  Osborn said, “We weren’t joking when we put out the 14.5% scenarios.”  Osborn said it was possible that 25% of state troopers could be laid off due to the budget shortfall.       
     Oklahoma state government faces a $1 billion dollar shortfall and legislative leaders are scrambling to find ways to generate revenue the only way they can- by taxing their people.   It remains to be seen if legislative leadership will be able to convince enough Rs to support these tax increases.  By my way of thinking, it would require a super majority (3/4) of each chamber to be legal.  Here is why:
      Back in March of 1992, Oklahoma voters passed State Question #640, aka The Oklahoma Voter Approval for Tax Increases Amendment.  The measure required that any legislation intended to raise revenue for the support of the state government be submitted to a vote of the people before it could become effective or pass the legislature by ¾ majority. The measure also removed the authority of the state legislature to block or prevent a referendum vote on revenue issues.  At the time, Democrats controlled the legislature and had since statehood.  They taxed everything that wasn’t nailed down and Oklahoma’s rate of taxation per capita ranked in the top 15 among US states.  Until #640, the legislature just passed tax and fee increase with a simple majority and grew government.  After that pesky little SQ passed, it wasn’t as easy.  Getting three fourths of a body to agree to a tax increase is a lot harder than a simple majority.  SQ #640 has allowed Oklahomans to keep billions of their own money in the past 25 years that state government wanted but just couldn’t get to.
     Rumor has it the current Oklahoma Republican legislative leadership believes these revenue increase bills don’t require a vote of the people or a three fourths majority and they plan to vote to approve with a simple majority on a floor vote.  Clearly, they want to circumvent the spirit and intent of #640.  Rest assured, if that happens, it will be challenged in court and they will likely lose.   
    Another one of the revenue bills that passed on Monday will eliminate $50 million in oil and gas production tax credits.  Several years ago, the legislature cut gross production taxes to among the lowest in the country and as a result drilling boomed in the Sooner state.  Now the legislature wants to increase the tax to the former level and eliminate drilling incentives.  Minority Leader Scott Inman of Del City, a Democratic candidate for governor called for a tax increase on “the wealthiest industry in the history of the world.”  What Inman fails to understand is business and industry(oil & gas included) doesn’t pay taxes- people pay taxes.  Every cent of taxation piled on business is simply passed onto the consumer. 
     It is amazing how fickle politicians can be.  When the Oklahoma oil and gas industry was generating record revenue, state government couldn’t do enough to encourage more drilling, but when the industry hit a downturn, they punish them. 
     The disappointing thing is Oklahoma Republican legislative leadership believes the only way out of this budget shortfall is to raise revenue.  “If you think this is the last revenue measure I plan to bring up, you would be sadly mistaken,” Osborn said.  At what point does the GOP in the state legislature actually start to practice what they preach(and campaign on) and start downsizing government?