George Kaiser has a logical, reasonable plan to tackle the state budget crisis…
11:09 AM EDT on May 16, 2017
Back in 2014, Harold Hamm, Larry Nichols, and Doug Lawler instructed the elected officials they control to lower Oklahoma's gross production taxes on oil and gas wells to 2%, as opposed to the 7% rate they were traditionally charged. The trio did this because they're our oil industry overlords and know what's best for their corporations and out-of-state shareholders.
When their plan was initially released and promoted in The Oklahoman, only two people seemed to publicly come out against it – Patrick Riley and George Kaiser. Here's what I said when the plan was announced:
Boy, we sure are lucky to have a trio of nice businessman available to come up with a “simpler,” “permanent” and “totally fair” taxation plan for their own industry. Obviously, these guys and their for-profit companies that have earned billions of dollars in revenue by draining Oklahoma resources know the best way they should be taxed. It’s why we let car dealers determine motor vehicle excise taxes, give bars the power to set liquor taxes, and let rich Republicans lower the top income tax rate.
Mr. Kaiser had similar thoughts:
“I have lived here for more than two-thirds of the life of the state. I see what’s happening to the state,” said Kaiser, owner of Tulsa-based Kaiser-Francis Oil Co. “Something has to give. I’m prepared to pay my fair share to the state of Oklahoma.”
Kaiser said he would like to see oil and gas companies — including his — pay 7 percent in gross production taxes.
Considering George Kaiser is an ultra-successful businessman and philanthropist who has made billions in banking and oil, you'd think our elected officials in the GOP would have paid attention to what he said, realized the 2% production tax only benefited oil and gas companies, and raised the rate to at least regional averages.
As we all know, that didn't happen. Unfortunately, Kaiser is not a right-wing Christian moralist who religiously follows a flawed anti-tax,anti-government ideology, so most lawmakers didn't really care about his warnings or concerns. The 2% tax passed overwhelmingly, and now Oklahoma finds itself in a perpetual budget crisis partly because we under-tax our most valuable resource.
As a result, George Kaiser is once again trying to use old-school tactics of truth, honesty and reason to let people know the 2% gross productions tax is a really bad idea. Check out this editorial he wrote for The Tulsa World on Sunday. I think all your liberal friends have already shared it on Facebook:
Like many Oklahomans, I am deeply disturbed about the deterioration of our state over the past five years, while our leaders looked away. I have lived here for more than two-thirds of the life of the state, and I have never seen the situation so desperate or the governmental response to the plight of our people so dismissive.
In terms of quality of life and core government services, we are truly in a race to the bottom. As an oilman and banker, I know that we cannot attract talent nor retain our bright high school and college graduates nor generate any true economic development with poor schools, health care, public safety and infrastructure. We are seeing an evacuation of our best and brightest, and not just teachers. Our greatest job growth is in low wage call/fulfillment centers. This is a self-inflicted wound — the direct result of an extreme application of the discredited economic theory that tax reductions stimulate economic activity, the so-called Laffer (should be Laugher) Curve.
Wow. George Kaiser is being both informative and cracking bad jokes. Is this his audition to write for us or something? If so, he should probably turn the editorial into a list. Then we'd hire him on the spot:
Most of us will acknowledge that the state is in a fiscal meltdown. We have long ago cast off the frills and fat and are now deep into the muscle. How did we get to this point and how can we turn the vicious cycle into a virtuous one? It starts by understanding and rejecting the eight myths upon which the prevailing policies are based:
Well, it's official. I'm proud to announce that George Kaiser is the newest member of the TLO Contributor Family! I can't wait to see what events he finds in this week's Friday Night In The Big Town. Maybe he can hook us up with a free checking account from BOK, or better yet, just buy the site and let me move out of here.
You can read the entire list of myths over at The Tulsa World's website. There's a passage at the end really stood out:
We have drained our fiscal lifeblood, and the ideologues are prescribing more leeches. It’s long past time to stop the bleeding and start the transfusions. It doesn’t require smarts, just statesmanship. We must acknowledge our recent fiscal folly and restore some of the revenues we cut … from where we cut them. We need a sustainable plan that brings teacher salaries and educational funding up to competitive levels and begins to restore our roads, police and safety net.
We should balance the budget without gimmicks and gradually restore the drastic cuts we have made. We should continue to seek efficiencies and hope to benefit from an energy recovery. But the starting point is to undo some of the $2 billion of tax cuts and subsidies that we doled out. Since $1 billion of that came from income tax cuts, which are a (misplaced) article of faith in the Legislature, we will have to look instead at the subsidies we handed out to select industries and bring our excise tax rates closer to other states. And, we should require internet sellers to remit the same taxes that our local shopkeepers collect, to eliminate their current 8 percent to 10 percent disadvantage.
Everyone has to accept his share of the burden. If we restore the gross production tax to the rate set in 1971, remove exemptions that wind energy no longer needs, raise the tobacco tax by $1.50 (securing public health benefits), bring our fuel taxes up slightly from 50th among the states and adopt the internet tax legislation that other states have passed, we can more than offset our current year $878 million deficit, make a substantial down payment on a teacher pay raise and reverse a few of last year’s most punitive spending cuts.
That's cool. It's kind of refreshing to see a rich, powerful Oklahoman offering rational and reasonable solutions to the budget crisis and not selfishly placing the interests of his corporation and out-of-state shareholders over our state and citizens. Now if only George will say something nutty about Islam and gays and out-bid Harold Hamm for Barry Switzer's loyalty and services, perhaps people and lawmakers will pay attention.
Anyway, if you want to take a trip down memory lane, here's the legislature web page for HB 2562. Once again, it easily passed the House and Senate in 2014, and was then signed into law by Mary Fallin. Many of the people who voted "Yes" back then are still serving today. Well, except for Dan Kirby, Ralph Shortey, Kyle Loveless, and Rick Brinkley. They all had to resign from the legislature in disgrace.
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