COMMENTARY: The stage is set: unimpressive tax cut, big jump in spending
Published: April 24th, 2013
OKLAHOMA CITY – No doubt, I often err. My beloved wife sometimes reminds me of her favorite among my thousands of Chinese fortune cookies: “Firm in opinion, always in the wrong.”
I am but a lowly scribe, whose policy views incline to the Right – a reporter, analyst, commentator, pundit.
Every now and then, my hunches are on the mark. I always feared Republicans didn’t mean it when they promised to cut taxes and reduce spending.
Gov. Mary Fallin, Senate President Pro Temp Brian Bingman, R-Sapulpa, and Speaker of the House T.W. Shannon, R-Lawton, on April 23 (Tuesday) announced agreement on three important issues.
One is for a “pay-as-you-go” approach to infrastructure, including the state Capitol; a second points to a new era for workers’ compensation, ending “dialing for dollars” in the litigious comp courts with a new administrative system, a shift toward the model pursued in states with lower system costs than Oklahoma’s.
Fair enough. Those fall within the framework of things promised or implied in the campaigns that brought all three people to statewide power. But then, there’s that income tax cut agreement.
The proposal they all support will nip the top rate from 5.25 percent to 5.0 percent – effective January 1, 2015. A second cut of .15 percent will come on January 1, 2016, contingent on revenue growth in Fiscal Year 2016 being equal to or greater than .15 percent.
It might all happen, and relief for taxpayers will be welcomed when it comes. Nonetheless I, for one, am not impressed with a plan that essentially says Oklahoma workers will get a break so long as they continue to drive an economy that is the envy of the nation.
What’s border-line infuriating is the sense of self-congratulation conveyed,
as if GOP leaders have done something that will have a dramatic effect.
These are good people who have talked themselves into believing they are doing something historic — but I am not persuaded.
To a man and a woman, Republicans wanting jobs in the Legislature and executive offices in recent years were elected while promising to cut taxes and make government smaller. A year ago, they were talking about a glide path to abolition of the state income tax.
Under this tax accord, Fallin will be a few days away from taking the oath to start her second term before she implements her first legislation lowering taxes.
Senate Republicans made it clear they did not want any government revenue cuts this year. Their line in the sand took the form of explicit promises to boost certain funding categories.
When they did not have the muscle to force reforms of tax credits and business incentives, they held tax cuts hostage unless effective dates were far in the future. The Speaker and the chief executive went along.
I’m not always right, but was when I wrote this month (and last year):
“Proposals to cut spending come and go, but the permanent government and its allies in the government-dependent private sector go on forever. Distrust of government is high, and voters long (theoretically) for restraints on taxes and spending, yet government spending at all levels has risen. It took an unwelcome Great Recession to moderate the pace of growth, but the direction thus far remains inexorable.”
Now past the immediate need for budget discipline to finance the $140 million or so annual impact of this modest tax cut, the Big Three can start the horse-trading that has characterized every legislative session since Republicans took control, after promising they would govern differently than Democrats.
These points bear repeating:
* Education bureaucrats have little or nothing to fear from Republicans. Both common and higher education will get some budget budget lovin.’
* Selected government employees will get pay hikes – even as thousands of working Oklahomans in the private sector run in place, at best.
* The state will carry through, as it must, on financing for the “Pinnacle Plan” legal settlement for human services.
* State spending has never, ever gone down in Oklahoma, even during the Great Recession (see accompanying chart).
*And so it goes.
Republicans are snatching a tie from the jaws of victory. We’ll stay in the income tax “sandwich” (Kansas to the north with lower rates; Texas to the south with no income tax at all) Gov. Fallin once said she feared.
In terms of income taxes, it’s as if OU football Coach Bob Stoops held a press conference at halftime of a game against Norman Middle School, to announce: “We had no penalties or interceptions, and we’re ahead 49-0.” Imagine, Coach Stoops then grins, waiting for reporters and fans to cheer.
This is not high drama. It’s more like musical comedy.
Here they come, walkin’ down the street. Get the funniest looks from, every conservative they meet: Hey, hey, it’s the Repubs.
You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.