The clock is ticking! State legislative leaders must craft a budget by Friday, May 27. On its face, the budget for the next fiscal year would seem simple, because there is so much extra cash to work with. Revenue estimates indicate more than $10 billion is available for spending, but nobody really knows what our current stable revenue base is.
At the moment, the state of Oklahoma is awash in “funny” money due to the massive amount of stimulus funding provided by the Federal government during the COVID pandemic. My estimates indicate more than $35 billion of taxpayer money was poured into Oklahoma in 2020 and 2021. Our annual Gross State Product (GSP) is around $190 billion.
Oil is over $100 a barrel and natural gas is over $7 mcf. Historically, these prices are never sustainable. And with inflation roaring and the federal reserve hiking interest rates, the risk of a recession in 2023 grows larger every day. The decisions made this year will determine how difficult the next downturn will affect our goals to become a Top 10 State.
Historically, Oklahoma politicians have mishandled the good times by spending too much, giving away too much in the form of insider corporate welfare, and cutting taxes for hard-working Oklahomans. I’m all for tax cuts and believe we can’t truly become a Top 10 State unless we eliminate the state income tax. In the past, however, we have shot ourselves in the foot more than once and hindered our progress toward that big goal.
I’m very heartened that Senate and House appropriation chairmen Roger Thompson and Kevin Wallace are both committed to a prudent approach to spending and to prioritizing increased savings. The best form of tax relief in this overheated economic environment is one-time tax rebates to taxpayers so they can share in the revenue windfall and offset what is hopefully temporary higher prices for goods and services.