Kenneth Corn
Oklahoma has been blessed with resources that boost our economy. For most of modern history, the oil and gas industry has been one of the bedrock industries building our state and providing good jobs to thousands of Oklahomans. While it has been a blessing, the revenue generated has been a curse for the Oklahoma Legislature.
When the oil patch is booming, the Legislature can’t resist the temptation of gross production revenue as it makes state budget decisions.Spending grows with new programs created and old one expanded. More stable revenue streams are reduced and supplanted with the milk and honey from the oil patch. At the Capitol, legislators seem to believe that the revenue will continue to flow forever.
Unfortunately, we’ve been here before. In the 1980s, the Legislature cut revenue and increased spending with the oil boom. When the energy cycle went bust, Oklahoma was forced to raise taxes dramatically and reduced spending to core services which crippled our state. It was a crisis that Oklahoma managed to rebound from in the late 1990s only to see the same thing happen again in 2002-2003 when we faced a $427 million shortfall. Fast forward to present day, Oklahoma again faces such a fiscal crisis due to our state’s overreliance on gross production revenue in our state’s budget.
In 2007, I introduced a constitutional amendment that would stabilize the state budget by stopping lawmakers from continuing roller coaster budgeting with gross production revenue. Its provisions were simple. For yearly budgeting, it would have required the certification of a 10-year average of gross production tax revenue from oil and natural gas. It would also have limited Legislative appropriation of revenue above that average to one-time expenditures such as infrastructure needs or even a tax rebate to taxpayers. This common-sense approach to our budgeting died because of politicians’’ desire to approve unrealistic fiscal policies and increased spending that is now returning to haunt our state.
Oklahoma must learn from her past. We cannot keep repeating the same mistakes and expect a different result. It’s time for the Legislature to give the people of Oklahoma a chance to change our budgeting process through a constitutional amendment that will halt the see-saw spending and bring greater stability to our state.
Kenneth Corn is a former state senator who chaired a subcommittee on Appropriations and Budget
I am in basic agreement here. However, we should acknowledge that the legislature has taken steps in the right direction. The “Rainy day fund” was created years ago in response to this concern. Well folks , Its about to pour. Also the state legislature took an important and bold step last year by giving those who drill in Oklahoma a 2% GPT rate for the first three years of a well. The competitive advantage that gives our state in competing for dwindling capital for drilling is of game changing significance. Other states will lose rigs that we will pick up.
Yes, we can always do better. But we ain’t done bad either.