Oklahoma faces budget crisis despite economic boom

By SEAN MURPHY Published: April 22, 2014
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The tax breaks granted range from tiny slices of the state’s roughly $7 billion annual budget — like the $47,000 a year in sales tax forgiven for purchases by the Boys and Girls Clubs— to hundreds of millions of dollars for the burgeoning wind industry and oil and gas producers. The state pays wind farms’ local property taxes for the first five years, at a cost of $28 million annually, and grants credits covering most of the taxes owed for selling the energy produced.

“It’s very easy for somebody who lives in western Oklahoma to look at those industries and see how they’re benefiting our state,” said Republican Rep. Mike Jackson of Enid, whose rural district is dotted with wind farms, citing the jobs that both industries create.

Fallin’s proposed personal income tax cut would cost about $147 million annually. The legislature is also considering new tax credits for rural housing construction, fundraising by cheerleaders, and chapel building. Already, Oklahoma has about $188 million less to spend on state programs than last year.

By all appearances, revenue would seem to be no problem with so much prosperity on display.

Hydraulic fracturing and horizontal drilling have opened up vast new oil and gas plays. The Oklahoma City skyline has been transformed with a massive new 50-story skyscraper built by oil company Devon Energy. Unemployment has dropped below 5 percent.

However, funding for public schools is now $200 million below where it was in 2009, while student enrollment is up 40,000. State employees haven’t received a raise in more than six years and disability programs are suffering.

“It’s like $43 a case for diapers for a 23-year-old,” said Lance Davis, whose 23-year-old son, Tomas, is confined to a wheelchair with cerebral palsy and is on a 7,000-name waiting list for a medical equipment stipend. “When it’s a person that uses several in a day, those things add up.”

Preston Doerflinger, Gov. Mary Fallin’s chief negotiator on budget matters, said state agencies can save money by becoming more efficient, but that the Legislature should consider the budget impact when approving new tax credits.

“Unfortunately, in this building sometimes we have difficulty thinking past our noses,” he said.

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