Spending brakes urged as revenue figures plunge
Capitol Spotlight for weeklies for week of Feb.18, 2007
By Jim Campbell
OPA Capitol News Bureau
A plunging projection of money available to the 2007 Legislature, based partially on a greater than expected hit from last year's big income tax cuts and lack of evidence those cuts have spurred the economy, could temper further tax cutting and spending this year.
The Oklahoma Tax Commission reported there will be about $250 million less than anticipated in December from personal income, sales and energy taxes. The commission's economists also projected a drop in estimated corporate income tax receipts, although commissioners did not adopt that figure.
Oklahoma's economic growth rate had been estimated at 10 percent but is now just five to 10 percent, the commission said. It also cited a larger than expected loss from the effect individual income tax cuts last year.
Gov. Brad Henry has proposed a budget of nearly $7.2 billion, featuring new or expanded programs for health care, education including pilot projects for three-year-olds, correction and research. A budget of about $7.1 billion, topping 2006 spending by $276.8 million, was certified by the Board of Equalization in December.
Senate and House leaders were quick to press on the brakes.
"This news validates our concerns that the governor was being rash with his spending proposals and that his budget was based on very rosy revenue projections," said Senate Co-President Glenn Coffee, R-Oklahoma City.
Senate President Pro Tempore Mike Morgan, D-Stillwater, said "it is incumbent on us now to make certain that we meet the obligations we have created and avoid recklessly rushing to over-extend ourselves in an uncertain future."
"Caution," he said, "should continue to be our watchword."
House Speaker Lance Cargill said the report "is why we have already laid the groundwork for cutting and eliminating needless government bureaucracies." Democrats have responded to revenue shortfalls in the past by raising taxes, he said, adding: "That won't happen on our watch."
State Treasurer Scott Meacham, Henry's chief financial advisor, said the figures appear to indicate the Tax Commission does not expect any an economic boom from tax cuts of the last two years.
A spokesman for Henry, Phil Bacharach, said the governor "has always worked within the constraint of fiscal realities and this year will be no different."
Meacham had said previously a decline was expected in gross production taxes on oil and gas and that January ice storms hurt sales tax receipts. He said Oklahoma's economy remains strong and the long-term outlook is for rising demand for energy.
The sharpest drop in expected revenue was about $150 million in personal income taxes.
The House Revenue and Taxation Committee voted to slash another $400 million from individual and corporate income taxes, although the legislation is not part of the House Republican leadership's agenda. Chairman Randy Terrill, R-Moore, said tax cuts of the last two years are at least partially responsible for growth of Oklahoma's economy.
Cargill has said GOP leaders would not decide on any further cuts pending the equalization board's Feb. 20 certification.
The board on some past occasions has not adopted the Tax Commission's estimates.
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Maybe it once made sense for the lieutenant governor to serve as governor when the chief executive was out of state, but the electronic age has made that horse and buggy provision all but obsolete, Gov. Brad Henry told state editors and publishers.
Predicting, "I'm probably going to get in trouble here," Henry also suggested Oklahoma's current electoral system for the two officials "is a waste of money."
The week after the governor's reply to a question at an Oklahoma Press Association meeting, a House committee narrowly approved legislation making the top two executive offices a team on a single political ballot in 2010.
Oklahoma would join 10 states, including Kansas and Colorado, where candidates for governor pick their running mates in the federal model for president and vice president.
The House Rules Committee advanced House Joint Resolution 1011 by Rep. Gary Banz, R-Midwest City, placing the question on the 2008 ballot if approved by the Legislature. The committee also approved House Bill 1637, saying the two candidates would file jointly and run together throughout the campaign.
Rep. Shane Jett, R-Tecumseh, the committee chairman, broke a tie of four Republicans and four Democrats in voting for the bill.
Banz said the changes would remove any adversarial relationship that might exist between the two officials. It also would eliminate any mischief that might occur, such as the lieutenant governor seizing the opportunity to veto bills or make appointments.
Henry had said the lieutenant governor has "to look for things to do" under the present system, a contention disputed by former Lt. Gov. Mary Fallin.
"I was very, very busy," said Fallin, elected to Congress last November.
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Oklahoma's distinction as one of fewer than a dozen states that allow straight party voting would end under SB 16 by Sen. Debbe Leftwich, D-Oklahoma City, approved by the Senate Rules Committee.
State Election Board Secretary Michael Clingman and Oklahoma County Election Board Secretary told the committee straight party voting is confusing to voters,
"The problem is, if people want to vote straight party, they actually have to mark that option on at least two or three places on the ballot," Leftwich said.
As a result, she said some Oklahomans may be disenfranchised.
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