Skip to main content

Top-Ten in Low Taxes, But Oklahoma Still Has Much Room for Improvement


In a comparison of states’ total taxes as well as spending in certain broad categories that the 1889 Institute has just published (Oklahoma Government Revenues and Spending in Perspective – Update), some interesting facts arise. Using federal data, we compared states by looking at the percentage of personal income collected in state and local government revenues. We also looked at the percentage of personal income spent in six broad spending categories: higher education, public education, public welfare, hospitals, highways, and corrections.

The data shows that in 2017 Oklahoma’s state and local governments:

  • Extract 13.2 percent of Oklahomans’ personal income in taxes and fees, moving Oklahoma into the Top Ten lowest-taxing states, ahead of Texas. 
  • Spend 12.38 percent of personal income on the six featured spending areas (which include federal dollars), only a little below the national average of 12.7 percent. While 9th overall (least spent being first), Oklahoma is not that much better than the 25th-ranked state.
  • Spend a higher percentage of our income on higher education than 28 states.
  • Spend a higher percentage of income on public education than seven states, including Arizona, a leader in educational choice and progress, but making us a Top-Ten state in how well we hold schools’ feet to the fire for their spending. 
  • Spend a higher percentage of state personal income on public welfare than 24 states.

In addition, we calculate that if Oklahoma’s state and local governments increased efficiency by 10 percent, doable given the examples of other states, $2 billion would be available to enhance existing services, provide new ones, or be returned to taxpayers.

Unfortunately, compared to two years earlier, the personal income per capita (average per person) numbers, which are adjusted for cost of living, show Oklahoma having lost some ground relative to other states. In fact, the unadjusted personal income per capita actually fell from 2015 to 2017. After all, when the oil industry sneezes, Oklahoma catches cold. 

Nevertheless, Oklahoma is still in the top half of states when it comes to average personal income. A big reason for this is due to the adjustment for cost of living. Oklahoma has a low cost of living compared to the vast majority of states. We’re not just Top-Ten in that category; we’re Top-Five. It’s a distinction we should strive to keep.

It’s now arguable that Oklahoma is a low-tax state. But when it comes to specific spending categories, we’re all over the place. We can get a lot better overall if we become more like Florida or New York on higher education, Texas or Virginia on welfare, Georgia or Arizona on highways, and Massachusetts or Illinois on corrections.

We should strive to be the leanest and most efficient of all states in every category of spending at all levels of government. Doing so, we would extract as little as possible from citizens, leaving the greatest possible amount of resources in the private sector, where our free choices cause resources to migrate to their highest valued uses.

Oklahoma has not yet achieved the status of being a low-spending state, but it would be something to celebrate. Some seem to think that high spending and high performance are synonymous, but every value-adding organization on earth knows better. Unbridled spending shows a lack of accountability and an uncritical willingness to take from hard-working taxpayers. It’s a path toward weakness, not strength.

Byron Schlomach is Director of the 1889 Institute. He can be reached at bschlomach@1889institute.org. 

Popular posts from this blog

Official Statement of 1889 Institute: Open Oklahoma’s Schools

Byron Schlomach, director of the 1889 Institute, issued the following statement today regarding the ongoing school closures throughout Oklahoma as a result of the Oklahoma State Board of Education’s response to the COVID-19 virus: Way back in March, the 1889 Institute first protested school closings based on then-existing evidence that school-age children are not prone to the disease, evidence confirmed in intervening months. This evidence, combined with the failure of school districts to provide a rigorous online education and the hardship on two-earner families created by distance learning, makes it clear that closing the schools has, indeed, been a policy error of epic proportions. To that end, 1889 Institute is calling on the Board of Education to rescind its current guidance that recommends such closures and reopen traditional brick and mortar schools immediately following the upcoming Christmas break. Not doing so is a disservice to both students and parents and will have a last...
Read more

Thankful for Real Community: A Thanksgiving Lesson

What follows is a true story – actually, two true stories, or the same story that occurred in two different places in very different times and circumstances. Read on to find out where. They had been discussing amongst themselves in pairs and small groups for months, concerned with their poverty and lack of progress in improving crop yields, so important to feeding themselves and building a thriving community. What they’d been doing, it seemed, should have succeeded. They all worked the same fields together – clearing, tilling, sowing, weeding, and reaping – everyone in the same fields at the same time. Anyone who might be weak in one skill should have had that weakness made up by others working beside them, with everyone benefitting from everyone else’s unique abilities. They all had a common purpose. But for the occasional troublemaker, present in every community, they liked each other, helped each other, and took care of each other when some among them fell ill. And, everybo...
Read more

Welfare of Oklahoma’s Children Panned In Flawed “Study”

Are Oklahoma’s children underprivileged? According to a recently published list by Wallethub, which attempted to rank states with the most underprivileged children, Oklahoma is the 7th worst. However, if the goal was to help states improve their policies, or to show parents what states to avoid, the authors might have done better to provide sources for their data (outside the lists Wallethub had already compiled), and more importantly, choose better metrics. The authors don’t provide much context or support for why their chosen metrics matter, or how they could be changed. Of course, the goal might just be clicks.   The study is divided into three sections: Socio-economic welfare (50 points), health (25 points), and education (25 points). Each is evaluated based on Wallethub ’ s list of arbitrary metrics and then assigned a weighted score. These are then combined to get the final overall “ underprivileged” score. But are these scores worthwhile?   Socio-economic Welfare Share...
Read more

Want to Improve Public Education? Put the Governor at the Top of the Executive Branch.

Whatever your gripe about the state of public education in Oklahoma, don’t tell it to Kevin Stitt. He can do very little about it. That’s not because he doesn’t want to or because he doesn’t have good ideas about how to improve our schools. It’s because our governor lacks the most basic authority needed to shape state education policy: the power to oversee and direct the State Department of Education. Ditto for a host of other executive branch functions, including law enforcement (Attorney General), regulation of the state’s largest industry (Corporation Commission), scrutiny of agency expenditures (Auditor), management of the public purse (Treasurer), oversight of insurance (Insurance Commissioner) and regulation of labor and employment issues (Labor Commissioner). Each of these executive branch agencies are siloed under separate elected officials who do not answer to the Governor.   Most organization charts display a neat hierarchy of accountable offices forming a cha...
Read more