Skip to main content

Budgeting During the Wuhan Virus Apparently Means Not Having to Make Tough Decisions


At the time of this writing, Governor Stitt remains in a budgetary impasse with the legislature over completing the current fiscal year, which ends in June. By the time this is posted, in all likelihood, he’ll have signed the spending bills that access the rainy day fund and which make no spending cuts for the rest of this fiscal year, despite current revenue issues and the fact that many agencies are closed. 

One of those bills Governor didn’t immediately sign also cut funding to the Digital Transformation Revolving Fund. This Fund appears to be very important to Governor Stitt as part of his efforts to make Oklahoma’s government top-10 in performance among the states. What’s strange is this is just about the only thing that saw a cut – something that likely involves contracts, and the sort of thing that does usually get defunded in the middle of a fiscal year.

A Tulsa World editorial has dismissed the disagreement with “The pandemic crisis isn’t a good time for a state budget fight” as if “pandemic” is all you have to say, and that makes the conclusion self-evident. And apparently, legislative leadership’s thinking is the same, along with a veto-proof majority of legislative members.

But is anybody – the legislature, the governor, or the press – in the right? Arguably, none are. Frankly, Governor Stitt is probably the closest to taking a principled stand. He has at least acknowledged that there is a rocky road ahead and now isn’t the best time to hide one’s head in the sand. The suggestion that budget cuts might be in order after a couple of years of pretty free spending and in the face of an economy devastated by a pandemic panic, accompanied by an oil price collapse, is actually a good idea. The error is in failing to prioritize. Some spending is less necessary than other spending. Across-the-board equal-percentage cuts is a result of laziness or an unwillingness to separate wheat from chaff.

The legislature and its press allies have nothing to stand on. The legislature’s first reaction seems to be that they really didn’t want to be at the capitol doing business in the first place. The pandemic therefore offers the perfect excuse to not do what they didn’t want to do anyway. Budget decisions made well before anybody had an inkling of what the overreaction to the Wuhan virus would do to the economy and before we realized just how badly oil prices would drop, are to stand (except a program important to the governor’s office, and apparently cut due to some sort of childish vendetta). Any and all of the gap between budgeted spending and revenue will be made up with rainy day funds. Yahoo! Let’s go home.

But when times are bad and rainy day funds get used, it’s generally prudent to review spending and prioritize, fall back to absolutely necessary spending, and cut any fat. It’s not a perfect analogy, but if a family’s chief breadwinner loses a job, that family might have substantial savings, but they don’t spend down the savings while continuing to live as if the job is still bringing in income – at least not if they’re prudent. They cut back expenses and use the savings to provide for necessities. That’s because they don’t know when or by how much the income will come back.

We don’t know when Russia and Saudi Arabia will cut back on their oil production or when they do, how much they’ll continue to produce. So we have no idea how much or when oil prices will recover. We have no idea what the economy will do once the powers that be decide we can go about our daily business again. We have no idea if the Wuhan virus or some variant might rear its ugly head again at some point in the fall. For that matter, these are uncertainties every time a budget is written, regardless of current circumstances, good or bad. But, we do know, right now, with absolute certainty, that revenues this year will fall short, and next year’s revenues are not likely to do well, either. Now is the time to be saving.

So legislature, why not acknowledge that Governor Stitt has a point? If you’re scared of the virus, maybe if the governor’s digital transformation efforts were fully funded, you could make new rules and meet virtually. Besides, it’s your job to make tough decisions. If that’s not what you stood for election to do, or if you seriously thought you wouldn’t have to, you really should leave the legislature and let somebody else take office who is willing to make some tough decisions. But if you stick around, this hyperlink gives some pointers for how you ought to make some of your budget decisions.

Byron Schlomach is 1889 Institute Director and can be contacted at bschlomach@1889institute.org.

The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.

Popular posts from this blog

Present Reforms to Keep the Ghost of State Questions Past from Creating Future Headaches

Oklahoma, like many western states, allows its citizens to directly participate in the democratic process through citizen initiatives and referendums. In a referendum, the legislature directs a question to the people — usually to modify the state constitution, since the legislature can change statutes itself. An initiative requires no legislative involvement, but is initiated by the people via signature gathering, and can be used to modify statute or amend the constitution. Collectively, the initiatives and referendums that make it onto the ballot are known as State Questions.   Recently, there have been calls to make it more difficult to amend the constitution. At least two proposals are being discussed. One would diversify the signature requirement by demanding that a proportional amount of signatures come from each region of the state. The other would require a sixty percent majority to adopt a constitutional amendment rather than the fifty percent plus one currently in place. ...
Read more

A Teacher Walkout Leader’s Distorted View of School Choice

The Tulsa World recently published a piece by a leader of the teacher walkout a few years ago predictably opposing Governor Stitt’s proposal to expand the Equal Opportunity Education Scholarship program. There is much to take issue with in the piece, which is full of disinformation, but perhaps the most preposterous claim is the following: You’ve probably also heard of “school choice.” The term is extremely misleading because it implies that parents don’t have a choice, when the reality is every parent already has school choice for their child. Parents can choose to send their child to a public school, private school, religious school or even home school. School choice isn’t about giving parents more options. It’s about using taxpayer dollars to give wealthy families a discount on their choice of school. (emphasis added) Try telling that to the truancy officer. The model of public education in America is that we assign every student to a government school base...
Read more

What if Legislators Were Licensed? Well, Just to Make a Point...

1889 Institute, as a general matter, objects to occupational licensing. We have written about it more than any other subject. The scant benefits simply do not outweigh the enormous costs to consumers and entrepreneurs, and  the  burdens that disproportionately impact the poor.   It must be noted that the remainder of this post is a work of satire. This should be obvious to anyone who has read even one of our papers, but each of the proposals below has an analogous provision in Oklahoma licensing laws. To those supportive of government-created cartels, these proposals might sound almost reasonable.  A material threat to the public safety and welfare has for too long gone entirely unregulated, unrestrained and unchecked. This menace has the power to corrode not only mere industries, but to corrupt the entire state economy. It’s no overstatement to say that the practitioners of this perilous profession hold the power to destroy democracy as we know it. After a...
Read more

Lies We Tell in Government, and Our Debts to Truth

HBO’s mini-series,  Chernobyl ,  is a drama depicting  the disastrous  1986  explosion ,  and  hero ic efforts to control the  resulting  meltdown ,  of the Chernobyl nuclear power plant in Ukraine  (then part of the Soviet Union ).  A flawed man, but true hero,  Valery  Alexeyvich   Legasov , worked tirelessly to ameliorate the disaster’s consequences and  chiefly  investigated its cause. He was  Deputy Director of the  Kurchatov  Institute of Atomic Energ y , a Soviet elite, who  is portrayed at the end of  the  series making a dramatic speech at a trial about how the nuclear reactor exploded, when  such an explosion in that type of reactor  should not have been possible. In the course of the series, the audience  learns  that the reactor had a design flaw that had been covered up by the Soviet State (true).  The audience also learns  that...
Read more