A Price too High
TED STREULI, The Journal Record
Gov. Mary Fallin, in Monday’s State of the State address, reminded Oklaho mans of the many positive things happening in the state. Our unemployment rate is low. Personal income is up. Net migration, the people moving in, is a plus.
She also reminded Oklahomans of the challenges. Graduation rates are too low. The Capitol is crumbling. Public pensions aren’t funded.
And amid the anti-Washington rhetoric, there was a consistent theme: Government should be run more like a private business.
That was Fallin’s justification for cutting state agency budgets by 5 percent while promising another income tax reduction of one-fourth of 1 percent. She reiterated the idea that the private sector, not state government, should be the cornerstone of job creation.
She’s right on many of those points. And her endorsement of House Joint Resolution 1092 to allow school districts a one-time opportunity to exceed their bonding limits to pay for safety measures such as storm shelters is a good idea, too.
Fallin would solve the state employee pay crisis by increasing some salaries and reducing all benefits. New state employees would get a defined contribution plan similar to a 401(k), but don’t be fooled into believing that businesses made that move because it was attractive to employees; they did it because it was cheaper than pensions, as it would be for the state. That’s not a bad thing. Oklahoma could surely stand to reduce its employee retirement costs.
“State government needs to be able to attract and retain hardworking, dedicated Oklahomans like them,” Fallin said. “And to do that, it needs to compensate its employees fairly.”
Indeed. But that’s hard to do when general revenue is down, agencies are taking 5-percent budget cuts and there’s a proposal to cut income tax revenue another quarter point.
Since 2006, the Consumer Price Index has risen about 15.6 percent. That means the new car you could have bought for $23,000 then will now cost $26,588. Your $800-per-month apartment now costs $925. And if you work for the state, the $40,000-per-year salary you had in 2006 is still $40,000. It is not possible to retain quality employees when their effective income decreases every year. The loss of spending power doesn’t help the state’s economy, either.
Fallin has done a great many things right, as she enumerated Monday. But it is unconscionable to continue to reduce state income to the detriment of those who serve the public.
Posted on Mon, April 21, 2014
by Morgan Browne