Stan Geiger

Oklahoma State Government Facing Fiscal Problems?

There hasn't been a month in this calendar year in which state revenue collections have met projections.

In spite of having no new money to appropriate this year, the politicians balked at tapping the nearly $600 million in the state's Rainy Day Fund. That tends to indicate they are expecting a greater need for that money will arise in the future.

I'd say concerns about state government being able to pay for itself going forward are valid. Indeed, if energy production takes a dip, Oklahoma's government will be in a world of hurt.

And why is that?

Liberals are complaining of relatively minor tax cuts, blaming them for the government's inability to throw money around. But that ain't it.

Don't get me wrong. I'm not a supporter of the state's recent tax cuts, simply because they were aimed at the wealthiest among us. I support tax cuts for people that need tax relief. I do not support tax cuts for the sake of making rich people richer.

But the state's fiscal woes---and potential future woes---are not the result of tax cuts. The state's general fund has grown by $2 billion---40 percent---in 5 years. There is no lack of cash flow to the state.

From Sooner Thought, citing a recent report from a think tank:

Appropriations for the upcoming state budget year are just $46 million, or 0.7 percent, greater than the current year, according to OK Policy's FY '09 Budget Review "Falling Flat: Will Standstill Funding Force Cuts in Services?" Most state agencies received no additional funds to cover rising costs or mandatory employee benefit increases.

"Legislative leaders have billed this as a 'maintenance-of-effort' budget," said David Blatt, OK Policy's Director of Policy and the report's author. "However, state agencies are facing steep rates of inflation for basic operations, such as utilities, transportation and equipment, as well as unfunded increases for employee health care and retirement costs. While most agencies will do whatever they can to avoid cutting services to the public, in some cases cuts are inevitable."

The report notes that inflation for the goods and services purchased by state and local government are rising even faster than costs for the economy as a whole, with the government price index rising by 6.2 percent in the fourth quarter of 2007. In addition, agencies are faced with employee retirement costs that have increased by $66 million in the past three years and employee health care costs that have more than doubled since FY '03.

There you have it, in a nutshell, direct from a liberal think tank and posted on a liberal blog. The reason governments can't seem to make ends meet is the cost of government employees.

Benefit costs for government employees are totally out of control. And it's not hard to understand why.

But before we address that issue, let's look at the comment about costs to government rising faster than the costs in the economy as a whole.

Uh, why? I mean who's getting bribed?

That said, we can move on.

Health insurance costs are, of course, going up for everybody. But the report cited above notes a doubling of costs since '03. As I recall, '03 was about the time the state decided that educators shouldn't have to pay anything for health insurance. Prior to the move, educators had to pay 25 percent of their premiums themselves. Since the move, the state eats the entire bill.

Recently in the news was a story about a retired state official, whose name escapes me, that is pulling down a whopping $142,000-a-year pension---even though he made no more than 80 grand a year while working.

More recently came the report of retired---and convicted---legislator Gene Stipe. His pension is reportedly $84,000 per year. Last I looked, a working legislator draws a salary of about 38 grand per year. How is it that a retired legislator can get paid 84 grand a year?

I saw U.S. Supreme Court Justice Scalia interviewed a few days ago. He laughed about the fact that he is basically working for nothing. He could retire, he noted, and get paid the same.

Embezzling school superintendent Larry Couch has copped a plea. I have seen no report concerning his pension. I'm fairly confident he will get it.

Not noted in the above excerpt is the increase in the number of government employees or the escalation of salaries.

The governor, coming into this year, was calling for a new educator position: the "graduation coach." Things didn't work out due to a lack of money, but the effort was made.

OSU hired a new president recently. Burns Hargis signed a contract that pays him $350,000 per year. (That's just his base salary.) His pay is $75,000 per year more than his predecessor was making.

OSU has also recently hired a new basketball coach. His pay is $1.3 million a year---a figure that nearly doubles what his predecessor was paid.

Government should not exist to take from the many so the few can prosper. Get a handle on that and you get a handle on government's fiscal problems.

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