In August, the Oklahoma Supreme Court’s decision to invalidate a recently enacted fee on cigarettes brought Oklahoma’s budget crisis back to the fore. While the loss of those potential funds is significant (especially to the health agencies directly impacted), it constitutes only a small part of the overall funding crisis facing state government. In the wake of the court’s decision, some have suggested further reductions to agency budgets are the solution. Others have sought quick-fix gimmicks or the use of available non-recurring revenue.
Meanwhile, what Oklahoma really needs is bold leadership to fix the structural imbalance that exists between available revenue and critical funding needs. Passage of the recently announced Republican plan that calls for some additional revenue is far from assured. This likely means those advocating for additional cuts to state services will increase their activity.
Define the ‘right size’ of state government
Recently, three former Oklahoma officials submitted a letter to Oklahoma policymakers urging them to reject calls for increasing revenue and to instead make additional cuts to state services. In the letter, former U.S. Sen. Tom Coburn, former Gov. Frank Keating and former Secretary of State and Commerce Larry Parman called on Republicans to “right-size” state government.
With the budget reductions of the past few years and Oklahoma falling further behind other states, the letter’s authors surely can’t be suggesting the right size for Oklahoma’s education budget is lower than 49th in the nation. Or that the right size for a school week is four days. Or that the right size for the health department budget excludes funding for the nine child abuse-prevention programs and 25 community health centers scheduled to be cut Nov. 15.
A historic crisis demands leadership, deliberation
The two authors of this column have more than 30 years of direct experience working on developing, enacting and implementing state budgets. Without a doubt, the current budget deficits are significantly more severe — and potential budget solutions are significantly more difficult to enact — than at any time during our official tenures.
After several consecutive years of revenue shortfalls, state agencies continue to reduce services, teachers are leaving for surrounding states, schools are cutting back on instruction days, road projects are being delayed or cancelled, and public safety is being compromised. It’s safe to say Oklahoma now faces a budget crisis of historic magnitude.
We propose that times like these demand leadership and thoughtful deliberation instead of blind adherence to the idea that additional revenue can never be the appropriate answer. If these former officials feel compelled to advocate for additional budget cuts, they are obliged to outline the programs or services they would eliminate or reduce and be forthcoming on the consequences of those actions.
Authors of OCPA letter should be specific
Keating now sits on the OU Board of Regents. He has ready access to OU and higher education budget and expenditure data. If he believes the higher education budget should be reduced further (the appropriation to higher education has been cut by over 20 percent during the past three years, and the current appropriation is below what it was in 2001), then he should tell us how big of a cut they can take, identify the areas he thinks should be cut and outline the impact of those cuts.
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Meanwhile, Coburn has been directly involved in providing health care services and is aware of the many difficulties Oklahoma faces in providing adequate and affordable health care. If he thinks we can further reduce health care spending, then he should outline the impacts of those cuts.
What would the corresponding loss in federal funding be? What reductions in provider rates would be necessary with the loss of the state and federal funding? What will the impact of those rate cuts have on access to quality health care (especially in rural Oklahoma)? How many health facilities would likely close given the reductions in funding? What would the impact be on Oklahoma families that receive assistance for nursing care?
Last, former Secretary of State and Secretary of Commerce Parman was charged with the difficult task of recruiting businesses to locate in Oklahoma. We wonder how often his pitch to those looking to relocate here touted that Oklahoma is slashing education funding, and the resulting declines in education will result in a business climate where your business can prosper?
Proposed cuts raise myriad questions
If these officials believe that further reductions in mental health funding are possible, how many Oklahomans will lose services, and what will be the impacts for affected families? Will reductions to now-scheduled outpatient services reverse the progress that has been made with programs such as drug courts? What are the public safety implications to eliminating these services?
Do they believe that we can continue to underfund our corrections system without jeopardizing the safety of correctional officers, staff and the general public? Do they not believe the well-respected director of the department of corrections (the former chief of staff to then-Texas Gov. George W. Bush and former director of FEMA) when he outlines the significant additional revenue necessary to operate a safe correctional system? Will reductions to the Department of Public Safety further limit the travel of state troopers?
Oklahoma currently ranks 49th in per-pupil funding for k-12 schools. Are these former officials advocating that we should spend less on public education? It is well documented that we pay our teachers significantly less than they can make in surrounding states. Are they advocating that we ignore this disparity and allow it to get worse?
Oklahoma has clearly made progress in recent years on rehabilitating our crumbling roads and bridges. Are they proposing that the funding increases provided for infrastructure be reversed, and that we can now cut transportation funding?
If they are not advocating funding cuts for the agencies discussed above, they will have a difficult time balancing the state budget. These agencies account for 80 percent of state appropriations.
Oklahoma out of ‘easy’ options
The governor’s office, the Senate and the House each have professional staffs that have spent the past several years scouring the state budget for cuts that have the least impact on state services. These same staffs and the Oklahoma Tax Commission have searched for ways to increase revenue while putting the lowest burden possible on Oklahoma taxpayers. The “easy” cuts and revenue options are all used up.
It is our belief that an objective review of Oklahoma’s revenue and budget situation will lead to the conclusion that, instead of further budget cuts or shortsighted budget fixes, we now need structural revenue changes that will allow Oklahoma to adequately fund its government going forward. We need to determine the best tax policy for the state based on thoughtful consideration of how proposed taxes will impact Oklahoma citizens and economic growth (and not merely on the vote threshold required for enactment). While former officials with no real understanding of the current budget problems offer ill-informed advice, current officials who have spent the past few years actually involved in enacting budgets and examining the consequences of their budget decisions have concluded that additional revenue is necessary.
Current officials, including Gov. Mary Fallin, Secretary of Finance and Revenue Preston Doerflinger, and Rep. Leslie Osborn (R-Mustang), should be commended for their willingness to take difficult positions to do what is needed for Oklahoma to prosper. Our guess is, the last thing these Republican officials want to do is advocate for additional revenue, but they came to the difficult conclusion that new revenue is needed because they understand our current budget situation and the consequences of additional budget cuts.
Times like these require a comprehensive revenue package that adequately funds state services, eliminates our reliance on non-recurring revenue and provides for stable long-term revenue growth. Numerous options for additional recurring revenue have been identified and vetted (including options presented by the governor, legislative caucuses and a more comprehensive plan proposed by the Save Our State coalition). Further cuts to state services have real-life consequences for Oklahoma citizens, and those consequences will hinder opportunities for Oklahoma to prosper and grow.
