Stitt's Fiscal Folly
There’s good and bad news yet again at NE 23rd and Lincoln Blvd.
The bad? Gov. Kevin Stitt wants to cut taxes.
The good? Gov. Kevin Stitt wants to cut taxes.
Think about it: A lame duck governor who’s made precious few friends in either house … whose approval ratings languish in Mary Fallin territory … and who, just two weeks ago, sued legislative leaders in a temper tantrum over tribal compacts … wants to order lawmakers into special session to help fulfill his tax cut dreams.
He must have missed his momma’s lesson that you catch more flies with honey than vinegar.
Could Stitt be in a weaker position to demand the Legislature do anything, much less follow him over the fiscal cliff by cutting taxes?
Especially since Oklahoma’s economy is slowing.
In case you missed it, state Treasurer Todd Russ reported last week that gross receipts slumped again in July – down $61.1 million [4.4%] over the same month the previous year.
We’ve seen this movie before: Statehouse leaders cut taxes when the treasury is flush. Then the economy slows. State coffers tighten. Budgets are slashed. Vital services cut.
And legislators squirm as they get an ear-full from irate constituents whose schools are forced to increase class sizes and reduce course offerings … who see waiting lists for mental health and disability services mushroom … who endure higher ed tuition and fee hikes … you get the picture.
All because the state’s powers-that-be ignored the reality that Oklahoma – still too reliant on too few big-ticket sectors like oil and gas – remains a boom-bust economy.
Why would they do such a thing? Because cutting taxes is politically pleasing … until it isn’t. When taxes are cut, the average workaday family rarely gets back more than enough to fund a trip or two to McDonald’s annually. But it sounds so good when lawmakers and the governor prattle on about enabling taxpayers to “save more of their hard-earned money.”
In reality, tax cuts disproportionately benefit the state’s fattest cats. The ones who – it just so happens – fund political campaigns and teams of wining-and-dining lobbyists at the Capitol.
But when pooled as funds to invest in vital state services, the taxes we all play can be real difference-makers, a rising tide that lifts all boats – not just the yachts.
Despite the warning signs, Stitt thinks there’s no time like the present to cut taxes … crowing about all the money in state coffers, as if it’s because of his financial genius.
The truth is, Oklahoma is flush primarily because the economy roared for months as COVID-19’s darkest days lifted – and because of a tsunami of federal pandemic-related relief funds and infrastructure investments, i.e. Build Back Better.
What’s remarkable is how short Stitt’s memory is. He was first elected in 2018 – the year when the state’s fiscal crisis precipitated a statewide teacher walkout. Many of the legislators who squirmed as 30,000 teachers, parents and students surrounded the Capitol and jammed its hallways are now gone. But for those who remain in elective office – and have a lick of common sense – the misery hasn’t been forgotten.
That’s undoubtedly why Senate Appropriations Chair Roger Thompson, responding to Stitt’s tax cut drum beats earlier this year, told Oklahoma City’s KOCO-TV, “The governor is very interested in tax cuts. I’m interested in a balanced budget and making sure that we’re able to take care of the future.”
Stay tuned.