A recent editorial in The Oklahoman suggested that because state income tax revenues are increasing, recent tax cuts did not hurt state revenues. The truth is that the cuts have prevented us from taking the opportunity to reinvest in Oklahoma. Revenues aren't increasing at the rate that they normally would during such an economic boom - or at the rate Oklahoma needs.

Oklahoma is in an enviable economic position compared with many states. The energy sector, which drives our state economy, continues to benefit from record-breaking prices. Unfortunately this prosperity is not translating into enough revenue to fund the state budget. This year, the state was forced to pass a standstill budget. Anyone who budgets for a business or household knows that a "standstill budget" is really a "backslide budget," especially with inflation at the highest rate in 27 years.

In these boom times, how can we be at a standstill? This should be our time to be moving ahead.

In the editorial, it was pointed out that a series of tax cuts made since 2003 "is a major factor in the standstill growth of the state budget." Personal income tax collections, which grew at an average annual rate of 7.5 percent from 2002 to 2006, grew by less than 1 percent the past two years. Without the deep cuts to the state's personal income tax, the state would have collected $400 million to $600 million more this past year than it actually did. It's easy to see how this has limited the state's options to reinvest in Oklahoma.

Some will argue that tax cuts put money back into Oklahomans' pockets at a time when gas and grocery prices are soaring. In reality, three-quarters of all benefit from the largest of the tax cuts, the top rate cut, goes to households in the highest income quintile, including a full $169 million of reduced taxes going to the wealthiest 1 percent of households. The suggestion that these Oklahomans are now more able to afford gas and milk rings a little hollow. Meanwhile, the bottom 40 percent of households receive a mere 2 percent of the benefits from lowering the top rate.

By reducing our already low taxes even further, Oklahoma has squandered a rare opportunity to improve underfunded schools, colleges, social services and infrastructure. The tax cuts going to the wealthiest 1 percent of households alone could fund a $1,500 salary increase for every teacher in the state and a 3 percent cost-of-living adjustment for state employees, and still address critical staffing shortages for our child welfare system and correctional facilities.

With Oklahoma's economy flourishing, we now have the opportunity to reinvest in our state. Given the host of issues facing Oklahoma, tax cuts aren't the best way to spend the additional money coming into our state. Let's invest in our citizens and our economy.

Matt Guillory

Executive Director, Okahoma Policy Institute

To read the full text of this article on the Oklahoman website, please click on the following link:

http://newsok.com/article/3293684/?print=1