April 23, 2012

You're Fiscally Responsibile? That's Adorable



Does anyone remember who once boasted (correctly) that he “passed the largest income-tax cuts in state history”? Answer: Governor Brad Henry. He and his ink pen saw to it that Oklahoma’s personal income tax was reduced from 6.65 percent to 5.25 percent—a stunning 27 percent reduction.

Would those income-tax cuts stimulate the economy? "I believe that they will," said the governor, who majored in economics at the University of Oklahoma. And regardless of any short-term effects on the treasury, Henry lieutenant Scott Meacham assured us that "tax-rate cuts like that provide a long-term stimulus."

On the other side of the aisle, then-Rep. Ken Miller (R-Edmond) was helping to push through these responsible tax cuts, while also emphasizing spending restraint.

This brief history lesson is worth remembering as lawmakers consider legislation that would reduce, and possibly even phase out, Oklahoma’s personal income tax.

Economist Arthur Laffer, who served as an adviser to President Ronald Reagan, has authored a study demonstrating that an income-tax phaseout can be done responsibly in Oklahoma. But some people aren’t persuaded. Some of our friends on the Left, for example, are calling the idea "fiscally irresponsible"—indeed, the very "height of irresponsibility"—and are pleading for adult intervention.

Of course, there’s nothing new under the sun. "Should we return money to the taxpayers or be fiscally responsible?" one Democratic state lawmaker asked a dozen years ago. Another brushed off the idea of income-tax relief by saying, "Someone around here has to be responsible, or one wouldn't have a government."

Now you’ll forgive me if I crack a smile. As someone who has dealt with policymakers for 17 years now, "responsible" isn’t always the first word that comes to mind.

It's worth remembering, for example, that someone around here has managed to run up billions of dollars in unpaid bills for our children—in a state with a constitutional balanced-budget requirement. That takes some doing.

Someone around here, rather than using part of the recent $597 million in Rainy Day spillover money to fix the crumbling state capitol building, decided that responsible stewardship entailed ignoring maintenance needs and instead spending those one-time funds on recurring expenses.

What about maintenance needs on other state-owned property? Well, that’s a tough one, because the state doesn’t even know how many buildings it owns. Nor does it know how many automobiles it owns. Yes, friends, your tax dollars are in the best of hands.

Indeed, responsible stewardship appears to be breaking out all over. Taxpayers are giving a quarter-million dollars a year to a school superintendent (in Jenks) whose district was recently placed on the federal needs-improvement list. We paid a third of a million dollars to the president of a four-year university (Cameron) from which less than 6 percent of the students graduate in four years. Hey, it’s only money.

Oklahoma continues to spend billions on Medicaid, the worst health care program in the country, even though former Medicaid boss Donald Berwick, a liberal Harvard professor, acknowledges that up to 30 percent of the spending is waste.

We spend millions of dollars each year bribing mothers (by offering them higher welfare benefits) not to marry the fathers of their children. Given what social science tells us about fatherlessness, one is tempted to say this government spending is the "height of irresponsibility."

We employ bureaucrats who encourage prospective welfare recipients to quit their job or not to declare certain income.

We take your hard-earned money and give it to people who spend it at tobacco retailers, use it to buy junk food, or (as one welfare recipient told KOCO-TV) cash it out to buy marijuana and cocaine. This isn’t a secret; food-stamp felons conduct business openly on Twitter.

Oh, and let's not forget the millions of dollars each year in Medicaid fraud, bogus EITC claims, and improper unemployment insurance payments in Oklahoma.

Moreover, one state agency paid Planned Parenthood $26,841 in part "to increase correct and consistent use of male condoms and insertion condoms during receptive vaginal and anal intercourse among youth (ages 13-19) and their sexual partners within the Tulsa, Oklahoma MSA."

Though I am persuaded that a 10-year income-tax phaseout is responsible, I acknowledge that reasonable people may differ. But I am reluctant to heed advice on "responsibility" from people whose preferred policies squander money, amass debt, erode marriage, encourage fatherlessness and multigenerational dependency, and abet anal sodomy among 13-year-olds. I’m just quirky that way.

Given Oklahoma's excessive bureaucratic overhead, it's no surprise that, according to Oklahoma’s latest Comprehensive Annual Financial Report, state government spending is at an all-time high. My colleague Jonathan Small has outlined $2 billion of spending—in addition to the examples above—that we consider irresponsible. And a recent SoonerPoll found that nearly 9 in 10 Oklahoma voters think state government wastes "a lot" or "some" of the money we pay in taxes (51 percent said "a lot"). It's small wonder that every demographic in Oklahoma—including pro-Obama Democrats—wants to reduce the state income tax.

So next time the grown-ups in the room hold forth on “responsible” stewardship, you might want to consider the source. Personally, I find their views adorable.

UPDATES: 

The Oklahoman reports that "the state Department of Human Services is relying on the honor system to enforce a law prohibiting certain welfare funds from being used in casinos, liquor stores, tobacco shops, and strip clubs." And that's probably not the best plan, the newspaper editorializes.

OCPA's Jonathan Small cites some examples from the Medicaid program: "Journalist Marvin Olasky reminds us that Medicaid laxness has contributed to our opioid epidemic. 'Medicaid cards enabled holders for a $3 copay to get the hundreds of pills a ‘freedom-from-pain’ doctor prescribed. The patient could use some pills and sell others on the street for thousands of dollars.' Or, consider Planned Parenthood. Shockingly, this disreputable organization, whose founder believes people who look like me should be eradicated, continues to receive Medicaid funding in Oklahoma. That means Oklahoma taxpayers get to pay for things like hormone therapy for transgender services and 'pre-exposure' pills for people who want to continue engaging in high-risk behavior but hopefully not contract HIV."

Oklahoma's higher education system has so much waste that it deserves its own section of the blog.

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