A fine line on tax cuts

by Leslie Osborn ([email protected]) 465 views 

Before joining the Oklahoma legislature in 2008, I was a small business owner for 22 years. During that time, I learned firsthand how things like red-tape and high taxes could hurt the growth of businesses and the economic development of communities.

That’s why, when I became a representative in the Oklahoma House I wanted to help make the government work better for Oklahomans. I worked with my colleagues to make the state more efficient by streamlining the number of agencies. In my second term, I was even the House author of one of the income tax cuts.

With a strong oil sector and funds from the federal economic stimulus package, Oklahoma was well-positioned to grow its economy and attract new businesses. And for the first several years, that is what happened. But as new rounds of tax cuts continued to pass, and oil revenue fell, the strain on the state budget began to take its toll.

Because of Oklahoma’s balanced budget amendment, tax cuts had to be paid for, and the result was cuts to programs. Some programs needed to see cuts to become more efficient, but as the average cuts rose to 45%, things became dire. Some school districts in Oklahoma went to four-day school weeks and parents were forced to find child care for their children on Fridays. We had too few case workers for our foster care system. And rural hospitals and nursing homes faced closures because of low Medicare reimbursement rates.

As House Appropriations Chair, I looked at our budget cuts over the past decade, and even as a Republican who is supportive of smaller government and cutting government waste, I felt we had gone too far. It was time to increase revenue and begin investing back in Oklahoma.

That opinion did not make me popular with party leadership in the state House. I was replaced as Appropriations Chair. But the call for revenue increases began to grow both in the state legislature and from the people of Oklahoma. The lack of dollars in common education proved to be a deciding issue.

Last spring, after years of underfunding, Oklahoma teachers went on strike to advocate for increased funding for classrooms and increased teacher pay. They filled the Capitol building sharing stories of the real impact cuts had on their students and themselves. And people across the state and the country paid attention. And for the first time in 25 years, the legislature voted to increase taxes with the 75% majority vote required.

As other neighboring states, like Arkansas, consider new rounds of tax cuts, I urge them to look at our example. While a healthy amount of tax and budget cuts can spur growth and help the government run more resourcefully, there is a line. And when tax cuts continue to grow, while revenue continues to decrease, the state and economy suffer.

Editor’s note: Leslie Osborn holds the statewide elected position of Oklahoma Labor Commissioner, and served as a member of the Oklahoma House of Representatives. The opinions expressed are those of the author.