News from the Plains: All this RED can make you BLUE
by Barry Friedman
Have I mentioned how free Oklahoma is? Of all the states, we're #5 with a bullet (and I do mean bullet).
But I digress.
Yet since 2009, Oklahoma’s public education budget has been slashed by $221 million or 10.8 percent, according to data analyzed by the Oklahoma Policy Institute (OPI).Two hundred million here, two hundred million there and pretty soon you're talking about fourth grade classrooms in portable trailers and gyms without volleyballs.
Well, as long as we're all sharing in the sacrifice.
In 2010, the tax rate for new horizontal wells, which constitute the vast majority of current drilling, was reduced to 1 percent. As Oklahoma Secretary of Finance and Revenue Preston Doerflinger reported a few days ago, gross production tax collections have dropped by more than $300 million, largely as a result of this bill. They are projected to drop by approximately another $300 million over the next three years. That $600 million-plus annual revenue reduction amounts to more than 25 percent of what we spend on schools, about 60 percent of what we spend on higher education and more than all individual tax reductions granted during the past several years.By the way, the above was not written by Robert F. Kennedy, Jr. to Robert Redford on tree-free hemp paper; this was George Kaiser's editorial this past Sunday in the Tulsa World.
Yeah, that Kaiser.
It is his contention that not only is the tax too low, it's aimed at the wrong people and, worse, it's not even part of the equation when guys like him decide to do whatever it is guys like him decide to do.
"Some say that Oklahoma needs to be competitive with other states. Well, at 1 percent, we certainly are competitive, but the biggest boom is taking place in North Dakota - where we and many other Oklahoma producers drill actively - and the tax there is 11.5 percent - more than 10 times as high as in Oklahoma! It sure appears that producers drill where God deposited the hydrocarbons, not where the taxes are lowest."This morning's sermon: God and hydrocarbons. Babysitting Available
North Dakota taxes on horizontal wells are ten times higher than Oklahoma's? Not the taxes assessed in the European Union; not the taxes collected by California.
North freaking Dakota!
And Oklahoma legislators are still falling over themselves trying to find new ways to fall over themselves.
But Sen. Brian Bingman, R-Sapulpa, argued that the tax breaks make Oklahoma more attractive to oil and gas companies. “The oil and gas industry has done their part—drilling more wells and creating more revenue for the state and the economy. They’re taking those dollars and drilling more wells, which creates more jobs and keeps people employed.”Mr. Kaiser, you wanted to say something?
If the money were going to small, independent Oklahoma producers to help them keep "stripper" wells in operation, it would serve a useful purpose. But virtually none of the reduction is awarded to small producers or small wells. It goes instead to the most expensive wells - where it has the least influence on the drilling decision - that are drilled primarily by a few large public corporations, all but one of which are majority owned by non-Oklahoma shareholders.Which brings us to education.
Unfortunately, for state leaders, God didn't just deposit hydrocarbons in Oklahoma, he also dumped a bunch of kids--626,159 to be exact and they're in 1831 schools.
Those students need text books, supplies, security guards, buses, gas to go into the buses, paper towels in the Girls Room, Bunsen burners, hall pass notepads, lunchroom personnel who serve inedible pizza, and a hundred other things.
Including teachers ... who presently rank 47th in the nation in salary.
As mentioned, the state legislature has cut education by $221-million; it has given $300-million in tax breaks to non-Oklahoma oil producers.
This doesn't seem difficult to fix.
The former mayor of Jenks, Oklahoma, Vic Vreeland, told me one time that when people and businesses thought about relocating to his town, one thing was on their minds: the quality of his schools.
"That's the first thing they asked about; that's the last thing they asked about."
While most states are cutting spending on education, as the figures in this analysis show, a few states are boosting it. A few states such as Alaska, Montana, North Dakota and Wyoming have significant oil and gas revenues and therefore have not suffered the same level of economic problems as other states, and thus they have enacted fewer budget cuts.I'll try not to scream: OKLAHOMA HAS SIGNIFICANT OIL AND GAS REVENUES!
Adjusted for inflation, from 2008-12, while Oklahoma spent 18.7% LESS per student, North Dakota spent 24.2% MORE.
North freaking Dakota!
As Kinky Friedman (no relation) once said about states, priorities, children, and oil--he called it 'Dinosaur Wine'--"It takes a real dumbshit not to understand the value of education."