No reason not to save

Many problems in state government owe more to short-term thinking and short-term memory than outside forces. Gov. Kevin Stitt is trying to break that cycle when it comes to government financial planning, but there are signs lawmakers are finding old habits hard to break.

This year lawmakers have about $574.5 million in additional revenue. Stitt wants to use part of that money for things like a teacher pay raise, but also wants to set aside $200 million for savings. Combined with an expected $359.7 million deposit that will go into the state's Rainy Day Fund later this year, that would bring state savings up to more than $1 billion.

That may sound like a lot, but $1 billion will cover only one-and-a-half months of state expenses. Stitt's longterm goal is for Oklahoma to have at least $2 billion in savings, which would cover about three months of expenses.

From 2015 to 2017, lawmakers faced budget shortfalls of $610 million, $1.3 billion and $870 million. Those shortfalls owed much to an oil bust. Yet, as Stitt noted in his State of the State speech early this month, the tax increases approved by the Legislature in recent years have made state government finances “more dependent on the price of oil.” Thus, when another inevitable oil price downturn occurs, the impact for state government will be even more severe than in recent years.

Clearly, placing $1 billion in savings is not an extravagance far out of line with potential need.

Yet lawmakers show little evidence they want to face this reality. House Republican leaders say they want to save only around $60 million. House Democrats don't want to save any surplus.

That is short-term thinking at its worst and an almost inexplicable case of selective amnesia when it comes recent financial events. Lawmakers' proposed combination of higher state spending and lower state savings will leave Oklahoma government finances more precarious than ever.

Secretary of Budget Mike Mazzei warns that current trends indicate there may be “no growth revenue” next year. “If current trends continue, and we appropriate all available funds for FY 2020 operations, we could be setting ourselves up for some difficulty next year,” he said.

Just one year ago, the state Board of Equalization certified that lawmakers had $5.88 billion to spend. Due to economic growth and numerous tax increases, that figure now stands at $8.24 billion, an increase of 40 percent. There is no sensible argument against setting a small, $200 million piece of that growth into savings.

Stitt wasn't in office during the recent budget shortfalls but appears to recall them far better than the legislators who were in office at the time. Oklahomans need to support Stitt as he fights to keep spendthrift legislators from driving Oklahoma into the financial ditch again.