In this episode, Ginnie Graham and Bob Doucette talk about how the midterm election filings ended with some crowded races, fewer than one-third of the 125 legislative offices up for election in November will be contested. Also discussed: Rep. Sean Roberts fought to be known as Sean “The Patriot” Roberts on the ballot for Labor Commissioner. The Oklahoma State Election Board denied the request. The U.S. Supreme Court is unlikely to reverse its McGirt decision. The latest on tribal and state jurisdiction. Citing safety concerns, local officials floated the need for a roughly $5 million extension of the new Tulsa County Family Center for Juvenile Justice and funding for more staffing to solve a problem created by a federal policy change. Remember when Tulsa tried to get Tesla? The latest on Elon Musk, Twitter and free speech Oklahoma ranks No. 8 in the rate of euthanizing dogs and cats in shelters, according to the Best Friends Animal Society. Last year, nearly 90,000 dogs and cats entered Oklahoma's shelters, and about 11,560 were euthanized. Remembering the late Joe Worley, former Tulsa World executive editor and an advocate for open records in Oklahoma. Join us Aug. 2 as we honor the best in area high school sports at the annual All-World Awards banquet, presented by Bill Knight Automotive. Get your tickets here.
With the passage of a $698 million incentive designed to lure a major manufacturer to northeastern Oklahoma, some lawmakers are rightly concerned that now is not the right time for tax cuts.
Legislators are considering at least $557 million in various tax cuts this session, prompted by rising state revenues and an influx of federal relief funds that have stuffed Oklahoma’s treasury with cash.
But some legislative leaders have been hesitant to move on tax cuts, given what has happened in Oklahoma when tax cuts, combined with economic downturns, have created damaging fiscal crises.
“I have been against tax cuts all year,” said Senate Appropriations Committee Chairman Roger Thompson, R-Okemah. “I personally don’t think we could move forward with any tax cuts while we are moving $698 million into a rebate package.”
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House Appropriations and Budget Committee Chairman Kevin Wallace has expressed similar reservations in the past. There are good reasons to be wary.
First off, the substantial funds in the state’s savings are partially filled with nonrecurring federal funds. There is no source that will replenish these funds once they’re spent.
Secondly, tax cuts are notoriously difficult to reclaim. State Question 640, approved by voters in 1992, requires an unusually large majority of the Legislature to pass tax increases. It’s either that or a majority vote of the people.
Only one time — in 2018 — has the Legislature approved a tax increase since SQ 640 was passed, and it did so only under extreme pressure due to statewide teacher walkouts. For all practical purposes, once a tax cut is enacted, it’s revenue that’s gone for good.
Thirdly, veteran lawmakers understand how quickly reserve funds can disappear. Substantial state savings evaporated during lean times caused by last decade’s oil crash, followed by the economic fallout from the early days of the COVID-19 pandemic.
Should Oklahoma land the deal to have a company build a factory in Pryor, money for the incentives will come from the state’s reserve funds.
Oklahoma’s economy is doing well at the moment, but Thompson — a conservative on fiscal matters — noted that headwinds are here. Inflation remains stubbornly high, and that plus other economic uncertainties could sour the state’s economic fortunes.
In that scenario, falling revenues would be choked further by tax cuts now being proposed.
Oklahoma already has one of the country’s lightest tax burdens, so the rush for tax relief is one of choice and not necessity. With the state committing so heavily on landing a major employer, that’s one more reason to be wise with the funds the treasury has on hand as well as the revenue it hopes to collect in the future.
The temptation to bring tax cuts to the state’s voters might be strong in an election year, but lawmakers should instead be prudent and shelve such proposals this session.
