As Gov. Kevin Stitt rolled out his wish list for the 2025 legislative session – promoting an income tax cut and flat budgets – it was impossible to ignore the wise words of two historical luminaries.
“Those who don’t know history,” British statesman and philosopher Edmund Burke once said, “are doomed to repeat it.”
“History doesn’t repeat itself,” opined American essayist and humorist Mark Twain, “but it often rhymes.”
So it is with Oklahoma’s not-so-distant history of ill-advised tax cuts and the draconian budgets they wrought.
It was just seven years ago – the historical twinkling of an eye – that tax cuts and a downturn in the state’s economy brought the statehouse to its knees.
It also yielded the first and only tax increase since voters in 1992 approved SQ 640, the constitutional amendment thwarting any new tax hikes without approval of a statewide referendum or from a legislative supermajority.
Most days, of course, you can’t get 75% of lawmakers to agree the sky is blue, much less on raising taxes. But things were so bad in 2018 that 75% agreed to restore previous cuts in gross production taxes, despite Harold Hamm glowering from the gallery. The new revenue went to fund education, including teacher pay raises, and other investments in vital public services.
At the time, there seemed universal agreement no elected official wanted to go through that again. Yet, here we are: Stitt and some lawmakers once again embracing the short-term, not the long.
Though state savings are unprecedented – allegedly in the $4 billion range – warning signs are flashing, including the fact Oklahoma’s on the verge of a third consecutive year of declining revenues.
In the past, when state lawmakers cut the state’s primary and most stable revenue source – the income tax – it all-but-wiped out the Rainy Day Fund and resulted in draconian cuts to vital services – hence, the teacher walkout.
You might think that would be enough to make income tax cuts a non-starter, but you would be wrong. Stitt wants to start with a .5% cut, enroute to wiping it out entirely. What would that half-percentage-point cost the state treasury? About $500 million – a half a billion dollars – over a fiscal year.
With claims of $4 billion in savings, Stitt argued, Oklahoma can afford it. Indeed, he implied, it is a necessary step in building on the “progress” his administration has made to help create “the very best state” in which “to live, to work and to raise our families.”
Imagine what investing a small portion in state savings could do to help begin building a better public health, education and anti-poverty infrastructure.
In other words, a better future for all Oklahomans.
The question, given Sooner history, is why state lawmakers would seriously entertain the governor’s tax proposal?
One answer, of course, is fat-cat campaign donors stand to benefit the most from cuts in their personal income taxes.
A second could be term limits. There aren’t enough legislators still in office who endured 2018’s political pain – about 1 in 5 in both houses.
Legislative leadership appears to be wary … but that hasn’t stopped the stampede to foolishness in the past.
History repeats? Or rhymes? In Oklahoma’s case, it may be both.
