The liberal think tank OKPolicy.org has released an issue brief that proposes policy options to manage Oklahoma's budget downturns. Their four suggestions are:
1. Improve our Forecasting Capacities
2. Strengthen our Reserve Funds
3. Suspend Multi-Year Revenue Commitments
And last but not least, raise your taxes in a recession!
4. Cap and Suspend Tax Expenditures: "While direct budgetary expenditures are being slashed, tax expenditures - exemptions, deductions, and other forms of preferential treatment - have been left largely untouched and unscrutinized. Policymakers should consider capping the amount of some tax expenditures and suspending some in years when revenues have declined."
Comments
Chris,
It's worth explaining WHY raising taxes is a bad idea.
The obvious reason why RAISING TAXES DURING A RECESSION IS BAD is that it would reduce money available to the private sector for consumption, investment, and saving.
Unfortunately, CUTTING TAXES DURING A RECESSION IS ALSO A BAD IDEA. Revenues lost from cutting taxes must ALWAYS be made up in one of three ways: 1) raising taxes later, 2) selling bonds, or 3) printing more money and creating inflation.
Options 2 and 3 are NOT readily available to states, but it's possible that - if our problem gets worse - Oklahoma could follow California's suit. CA is expected to declare bankruptcy this year, transferring liabilities to the Federal Gov't
Therefore, THE ONLY SMART LONG-TERM SOLUTION IS TO CUT SPENDING.
For example, Oklahoma incarcerates FAR FAR too many people. We could save money by decriminalizing marijuana. Education reform to allow school choice could drive down education costs, which accounts for 40% of
...con't...
the state's general budget. Privately-sponsored charter schools can also help the state save money and cut spending.
Other ideas include scrapping the new Orwellian "Fusion Centers" being built in Oklahoma to integrate state and federal law enforcement databases. We should also consider proposals such as State Rep. Jason Murphey's House Bill 1170 to modernize the state's outdated, geographically-dispersed IT infrastructure with low cost, low maintenance, more centralized computer systems using new technologies such as virtualization, remote backups, and cloud computing.
The ONLY GOOD SOLUTION IS TO CUT SPENDING.
-Kyle O
Got something to say?
Examiner.com is looking for writers, photographers, and videographers to join the fastest growing group of local insiders. If you are interested in growing your online rep apply to be an Examiner today!