The Norman Transcript

February 9, 2014

Cutting taxes and slashing education: A recipe for disaster


The Norman Transcript

NORMAN — Editor, the Transcript:

I hope you saw the front-page headline in The Transcript last week, “School funding down.” And now, we learn that our Republican governor wants another income tax cut.

If you think this frightening combination moves the state forward, you better stop reading now.

Expenditures for public education in Oklahoma have already taken a big hit over the past few years. This past year, for example, the state budget for education was some $572 million below the spending level for fiscal year 2009 (Oklahoma Policy Institute; OPI).

And, since the beginning of the recession, Oklahoma actually reduced state aid per pupil by some 23 percent (controlling for inflation) — the largest such decline among all states. The state’s per student expenditure now ranks us 8th from the bottom.

What about higher education? The governor’s budget calls for a 5 percent cut here.

Oklahoma lawmakers have been slashing higher education funding for years, from about 74 percent of state expenditures in 1988 to about 39 percent for 2013, according to the Tulsa World. Now more of the same.

One might hope that even conservative lawmakers would recognize the value of a more highly educated workforce.

So surely the governor and her Republican supporters offer a compelling argument for the proposed tax cuts. Well, in short, no.

Gov. Fallin, in her State of the State address, falls back on a tired and widely refuted notion that tax cuts will boost the state economy. Not so, according to an abundance of research by respected economists.

Eight published empirical studies since 2000 show no significant relationship between state tax levels and economic growth. A new report by the nonpartisan Congressional Research Service (CRS), based on 65 years of data, confirms this finding.

Nor do such tax cuts pay for themselves. It’s a right-wing myth that cutting taxes produces sufficient economic activity to pay for the value of the lost public revenue.

Tax cuts do accomplish two things: (1) they reduce state revenue, and (2) they increase income inequality because state income tax reductions almost always favor the well-to-do.

Finally, let me offer a quote from the economist and dean of the UCO College of Business, Mickey Hepner.

In a radio interview with David Blatt of OPI, he made the following statement, “Gov. Fallin’s proposed budget takes a bad situation and makes it worse.” Amen.

DAVID R. MORGAN

Norman

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