Even with recent gains, Oklahoma’s inflation-adjusted state tax revenue is less than a decade ago, the Pew Trusts reported Tuesday.
The report, which tracks inflation-adjusted state revenue from 2006 through the second quarter of 2018, found 36 of 50 states are above their peak receipts prior to the great recession of 2008-2009.
Nationally, states were 12.2 percent ahead of 10 years ago, led by North Dakota, Colorado and California.
Oklahoma is 8.5 percent below its peak in the first quarter of 2009 and about 3 percent below revenue in the middle of 2008. Only three states — Alaska, Wyoming and New Mexico — are further below their pre-recession highs.
Exactly what the figures mean depends on point of view. David Blatt of the Oklahoma Policy Institute said they are the result of tough economic conditions and bad policy, while Jonathan Small of the Oklahoma Council of Public Affairs maintained that 2008 is an unfair year for comparisons.
People are also reading…
“What’s really important is context,” said Small. “It’s impossible to look at the revenue in 2008 and make a comparison.”
Small and others point out that Oklahoma’s tax revenue spiked to record levels in the oil and gas boom of a decade ago.
Blatt, though, said 2008 is a good starting point because it illustrates Oklahoma’s tendency to make short-sighted decisions in good times.
“I’m hopeful the lesson lawmakers take away from the last decade is that when things are going well, don’t erode the revenue base,” Blatt said.
“We’ve seen all across state government budget shortfalls and budget cuts that really strained state agencies assisting Oklahomans,” he said. “It’s been a tough decade for Oklahoma. Our numbers show we’re about $780 million below where we were in 2008, accounting for inflation.
“Some of that is because of economic conditions. Some of that is because of decisions by the Legislature.”
Small points out the Pew figures do not include new revenue from tax increases passed last year by the Oklahoma Legislature, and there are some other variables such as population growth and demographic changes. And the Pew report doesn’t say whether Oklahoma lags the nation in state revenue because of tax policy, a sluggish economy or both.
“Oklahoma has always been a low-tax state and that’s the way it should continue,” said House Majority Leader Jon Echols, R-Oklahoma City.
Echols said Oklahoma’s revenue is inherently erratic because of its large reliance on sales taxes — the most volatile major source — and low reliance on property taxes, which are the most stable.
“I’m not saying we should raise property taxes,” he said. “I’m just saying that’s the way it is.”
But Blatt said the results of last year’s legislative elections suggest Oklahomans concluded state government had been stripped a little too bare.
“We dug a deep hole and we’re only beginning to dig out,” he said.
