Tinkle Down: The Sequel

How about this for a new slogan? The Oklahoma statehouse: where bad ideas go to … thrive.

It’s certainly apropos given Gov. Kevin Stitt’s decision to call legislators into special session Oct. 3 to consider cutting state income taxes again.

“We have one job – to serve and protect all four million Oklahomans,” the governor said. “I’m calling on the Legislature to fight for Oklahomans and demand fairness and transparency in our tax system and our budget process.

“I am also calling on the Legislature to put Oklahoma on a path to zero income tax and give Oklahomans a much-needed tax break. If not now, when?”

Irony apparently is lost on the guv.

Ask transgender Oklahomans if they feel “served” and “protected” by Stitt, who signed into law restrictions on their health care rights. Or the state’s tribal nations, the governor’s current Public Enemies No. 1 and not-so-thinly veiled targets of his allusions to tax “fairness” and “transparency.” Or workaday Oklahomans who rely on vital state services funded through a shared social contract built on the income tax – the fairest tax of all because it is based on ability to pay.

We’ve seen this movie before. It has nearly as many sequels as the Texas Chainsaw Massacre. But the fantastical script remains the same: Cutting taxes for wealthy individuals and rich corporations magically generates even more state revenue!

Except that it doesn’t.

Want proof? Well, late in Democratic Gov. Brad Henry’s and early in Republican Gov. Mary Fallin’s terms, Oklahoma lawmakers went on a tax-cutting spree, eliminating about $2 billion in annual revenue.

It was a full-throated embrace of economist Arthur Laffer’s “Supply Side” – aka “trickle down” – theory, which President George H.W. Bush memorably dismissed as “voodoo economics.”

When the next economic downturn came, Oklahomans endured “tinkle down” economics instead. Yes, the wealthiest Sooners had more money in their pockets, but state revenues plunged.

Suddenly, there wasn’t enough money to go around. Lawmakers responded by imposing the nation’s deepest spending cuts on K-12 schools and higher ed. Other vital state services were squeezed. Waiting lists and class sizes exploded.

So did the public.

Remember the 2018 session when legislators, a proverbial gun to their heads, restored some gross production tax cuts, and thousands of teachers, parents, students and public ed supporters marched on the state Capitol? That’s hardly ancient history.

More recently, historically Republican Kansas – Kansas! – turned the governorship over to a Democrat, Laura Kelly, after GOP Gov. Sam Brownback’s “trickle down” approach similarly produced massive deficits, steep budget cuts and a credit rating downgrade.

Unfortunately, Oklahoma’s House Speaker Charles McCall has joined Stitt’s call for tax cuts, asserting a quarter-point cut in the state personal income tax and a reduction in the state corporate income tax in 2019-20 helped fuel soaring state revenues.

Reality check: What really helped create overflowing state coffers was an infusion of federal COVID-19 relief funds, a rebounding-from-the-pandemic economy and a spike in energy prices attributable to Russia’s invasion of Ukraine and lower OPEC production.

The speaker, of course, is quite interested in succeeding Stitt as governor. But it would be risky to bank on tax cuts as a selling point. Why? Because the state’s financial picture may not be as rosy by 2026.

The state treasurer reports gross receipts were down for the fifth straight month in August, a sign that Oklahoma’s historically boom-bust economy could be tilting toward bust again.

So far, thankfully, Senate President Pro Tem Greg Treat and Senate Appropriations Committee Chair Roger Thompson aren’t buying the tax-cut hype.

Taxpayers should hold their wallets tight.