ATTENTION CANDIDATES: If You Are Serious about Winning, Sign the Taxpayer Protection Pledge
By Rick Moore
Fiscal restraint, fiscal responsibility, and expense leadership continue to take center stage during this election-cycle. Whether a candidate is a moderate or conservative on social issues, he would have the best chance at winning in 2010 by declaring to be a strong fiscal conservative. It doesn't take a political genius to notice the Tea Party movement demanding that candidates commit to reducing government spending.
Grover Norquist, President of Americans for Tax Reform, has said: "Raising taxes is what politicians do when they don't have the strength to actually govern." Mr. Norquist formed ATR in 1985 at the request of President Ronald Reagan. The flagship project of ATR is the Taxpayer Protection Pledge, a written promise by legislators and candidates for office that commits them to oppose any effort to increase income taxes on individuals and businesses. The Pledge, made to the taxpayers of the legislator's district and to all the people of Oklahoma, says "I will oppose and vote against any and all efforts to increase taxes."
In 2009, six of 48 state senators signed this Pledge: Cliff Aldridge, Randy Brogdon (Taxpayer Protection Caucus Chair), Sean Burrage, Glenn Coffee, Todd Lamb, and Jonathan Nichols. Oklahoma also had 23 of 101 House members sign the Pledge in 2009: Mike Christian, David Dank, Lee Denney, David Derby, George E. Faught, Corey Holland, Charlie Joyner, Sally Kern, Charles D. Key, Randy McDaniel, Ryan McMullen, Jason W. Murphey, Charles Ortega, Leslie Osborn, Mike Reynolds, Mike Ritze, Mike Sanders, Earl Sears, Randy Terrill, Sue Tibbs, Mike Thompson, John Trebilcock, and Paul Wesselhoft.
In 2010 the following candidates also signed the Pledge: Sen. Tom Coburn, Sen. Jim Inhofe, Rep. John Sullivan, Rep. Frank Lucas, Rep. Tom Cole, Randy Brogdon (Gov.), Rep. Mary Fallin (Gov.), Todd Lamb (Lt. Gov.), Chris Medlock (Mayor-Tulsa), State Sen. Bill Brown, Shannon Jones (State Sen.), David Holt (State Sen.), Jack Accountius (State Rep.), Kent Hunt (State Rep.), Molly McKay (State Rep.), Paul C. Parrott (State Rep.), State Rep. Mike Sanders, and Stephen Skacall (State Rep.). The following congressional candidates have also signed the Pledge: Kenneth Rice (1), Howard Houchen (2), Dan Arnett (2), R.J. Harris (4), Kevin Calvey (5), James Lankford (5), Mike Thompson (5).
"Taxpayers hear empty promises every day from elected officials in Washington about spending and taxes, only to end up disappointed because government decides it wants more and more," said Brian Downs, executive director of Oklahomans for Responsible Government. "Signing this pledge to keep all tax increases off the table while fixing Oklahoma's budget gap will give taxpayers some peace of mind that their government leaders here in Oklahoma are listening to them."
Oklahomans are tired of reading such negative headlines as "Oklahoma Has An 18.5-percent Shortfall, Making It No. 1 In The U.S." And, with the general fund revenues falling more than $1.2 billion short of FY2010 projections, Oklahomans do not want politicians reaching in our pocketbooks again. "This great divide between those who irrevocably take tax increases off the table and demand spending restraint and those who remain "open' to tax increases in place of spending cuts is dramatically revealed in the 2010 elections," said Mr. Norquist. At the end of the last legislative session in May 2009, legislators passed a budget for the 2010 fiscal year which would begin July 1, 2009. By December 2010, state Finance Director Michael Clingman ordered monthly allocations to state agencies be reduced 10-percent after Gov. Brad Henry and legislative leaders agreed. David Blatt, director of the Oklahoma Policy Institute, recently told the State Chamber of Oklahoma that about $1.2 billion of this year's budget was comprised of short-term enhancements and that Oklahoma could not have made it without that help.
These "short-term enhancements" are also known as all of the $540 million in federal stimulus package, $272 million from the state's Rainy Day Fund and $225 million in cash flow. However, Blatt warned that Oklahoma could continue to see eroding public infrastructure as departments continue facing fiscal challenges. Unless revenues recover substantially for FY 2012, with all of the federal stimulus money spent during 2010, 2011, and a drained Rainy Day Fund, the budget could be a train wreck.
Oklahoma's personal income grew by .9 percent in the first quarter of 2010 due to gains in health care, federal civilian employment and the military. The alarming fact was to see a decline in earnings in the private sector, particularly construction, real estate and mineral extraction, including oil and gas. The private sector is creating very little new wealth or income, and without this income government will not increase its revenues through taxes. This lack of private sector job creation coupled with the out-of-control spending is where the problem lies. We must create an environment in Oklahoma that encourages private sector job creation, job growth, capital investment, with no penalties! The tax base will increase as will the sales tax revenue.
State Question 744 will play an important role in the 2010 elections, as a politician's position on this issue is pivotal to fiscal conservatism. If approved, the constitutional amendment proposed by the Oklahoma Education Association will require a diversion of at least $850 million to as much as $940 million per year in state funds to Common Education. In order to fulfill that requirement, the state income tax rate would have to be increased from 5.5 percent to approximately 7.35 percent, according to the House fiscal staff, or a 34 percent increase overall.
Another option would be to raise the state's sales tax rate, which would go from 4.5 percent currently to about 6.2 percent or a 38 percent jump.
If taxes are not raised, the Legislature would have to make funding reductions to balance the state government. Since Common Education would be excluded from any cuts, the remaining state agencies would see across the board cuts as high as 20 percent to raise the necessary funds.
Currently, Common Education already receives 36 percent of the state budget, or $2.4 billion annually. The next closest percentage for a single agency is Higher Education, which receives 15 percent of the budget, and then the Health Care Authority, which receives 10 percent of the budget. If SQ 744 is approved, Common Education's percentage would increase to 49 percent of the state budget, which would effectively remove legislative control of nearly half of the state's budget.
July 31, 2010 would have been Milton Friedman's 98th birthday. As both the Oklahoma Council of Public Affairs and the American's for Prosperity Foundation are honoring Mr. Friedman, it's only fitting that his opinion be shared in this article. Back when Californians were debating Proposition 13, Milton Friedman endorsed the measure on the grounds that it is "desirable for the people to limit their Government's budget, to decide how much in total they are willing to pay for their Government." A limitation on taxes, he wrote, would enable citizens "to say to the legislature, we assign you a budget. Now it's your job to spend that in the most effective way." In a 2003 Wall Street Journal article the Nobel laureate in economics asked: "How can we ever cut government down to size? I believe there is one and only one way: the way parents control spendthrift children, cutting their allowance. For government, that means cutting taxes. Resulting deficits will be an effective—I would go so far as to say, the only effective—restraint on the spending propensities of the executive branch and the legislature. The public reaction will make that restraint effective."
If we continue to have an Administration that foists Keynesian responses on Oklahomans during this financial crisis, our economy will only worsen. Conservatives should review the credentials of every candidate on the ballot and only lend support and a vote if he signs the Taxpayer Protection Pledge. We need a legislative body that is willing to make spending reductions the top priority. A legislative infrastructure must also be put in place to stimulate economic prosperity; so when a Republican Administration wins back the White House in 2012, one thing is for certain: Oklahoma will be ready.
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