Voodoo Economics
Oklahoma raises taxes on oil, gas, and cigarettes to give teachers their first raise since 2007
Republicans took full control of Oklahoma's government in the Tea Party-fueled 2010 elections, and they quickly set about slashing taxes, joining neighboring Kansas in launching a grand experiment to showcase the GOP's supply-side theory of economics. Kansas lawmakers had enough last year, voting to raise taxes over Gov. Sam Brownback's (R) veto, and on Wednesday night, Oklahoma lawmakers gave final approval to a bill that will generate $450 million in new revenue from a $1-a-pack surcharge on cigarettes, increasing the gas tax by 3 cents and 6 cent for diesel, and raising taxes on oil and gas production to 5 percent, from 2 percent.
"We finally got the job done," Gov. Mary Fallin (R) said after the Senate approved the bill, 36-10 — barely meeting the state's constitutional requirement of three-fourths majorities for tax increases. Fallin said she "absolutely" plans to sign the bill, which the state House passed Monday. The extra revenue will go largely to fund an average $6,100 pay increase for teachers, who are planning to walk out of class on Monday. The oil and tobacco industries lobbied heavily against the bill, and anti-tax advocates are urging electoral retribution.
Like in Kansas, Oklahoma's tax cuts and deregulation spree didn't have the desired effect on the economy. Rural hospitals and nursing homes are closing, prison populations are at crisis levels, and state Highway Patrol officers got mileage limits last year because the state couldn't afford the gas bill. But the situation in schools prompted the tax hike. Oklahoma teachers have America's third-lowest average pay, and they haven't had a raise since 2007. There are 1,500 fewer teachers in the state than in 2010, and 10,000 more students than in 2015; 20 percent of Oklahoma school districts have switched to four-day weeks to save money.
Teachers are still planning to walk out on Monday, but the bills will likely avert a longer strike. You can read The Week's Ryan Cooper's on the rise in teacher labor action, and Jeff Spross on what went wrong in Kansas.