Mary Fallin: What's holding her back from bold leadership?

Here we are, the reddest state in the nation: Republican governor, overwhelmingly Republican legislature. (36-12 in the Senate, 72-29 in the House.)

But instead of tightening the state's belt, as their constituents have had to do, instead of cutting tax rates significantly so that Oklahomans will be able to keep more of our own money and compensate for Federal tax hikes, and so that Oklahoma can compete with our no-income-tax neighbor to the south and our lower-tax neighbor to the north, our elected officials at the State Capitol are hesitating over a minuscule cut in the top income tax rate. We couldn't get a tax cut last year, and it's looking like we might not get one this year.

OCPA's bold budget plan

There is a bold plan on the table, if our leaders are willing to take it up. The Oklahoma Council of Public Affairs has proposed a state budget for Oklahoma that reduces appropriations for FY 2014 by $132 million as compared to this year's appropriations. That's an actual cut, not a mere reduction in the growth of government.

The OCPA proposal accomplishes these savings with more efficient health care coverage for state employees, gets government out of businesses that ought to be handled by the private sector, reforms agencies, boards, and commissions, and scrutinizes federal grants that often obligate state and local spending. It cuts our top tax rate by 1/2 percentage point, from 5.25% to 4.75% and still brings in $277 million in surplus funds that can be carried over to FY 2015.

The legislature's timidity; Fallin blames lobbyists

But our legislative leaders aren't boldly moving forward with OCPA's thoroughly researched proposal. On Monday the House revenue and taxation subcommittee turned down a Senate proposal to cut tax rates by 0.5%, but not until calendar year 2015, and offset by eliminating or reducing a number of tax credits. Senate President Pro Tempore Brian Bingman has said he would oppose a tax increase that wasn't "revenue neutral," which would rule out the House's proposed 0.25% tax cut. Even if it passed, the House's proposal would leave us with a higher top tax rate than neighboring Kansas, which cut its top rate to 4.9% last year.

Gov. Fallin blamed last year's failure to agree on a tax cut on lobbyists. But shouldn't an effective governor have more pull with legislators than lobbyists? And if not, why not?

Franklin Center boosts bloggers to hold officials accountable

Sometimes you have to go far from home to learn something about where you're from. A few weeks ago I was in Scottsdale, Arizona, at the ROCblog retreat for bloggers sponsored by the Franklin Center for Government and Public Integrity. ("ROC" stands for raising online community.) The weekend was packed with informative talks and panels, focused on giving bloggers the tools and techniques to hold government officials accountable for their actions. There were bloggers and speakers there from all over the US, but one of the most memorable moments for me involved a mention of Oklahoma Governor Mary Fallin by Wall Street Journal columnist Stephen Moore.

The Franklin Center came into being to address the decline in the traditional news media's coverage of state and local government. The Franklin Center employs investigative reporters and full-time state capitol reporters -- including Pat McGuigan, who covers the Oklahoma capitol for Watchdog Oklahoma. They also seek to support and encourage the citizen journalists who cover government in their spare time. (Read the Franklin Center's vision here.)

In his words of welcome at the beginning of the retreat, Franklin Center President Jason Stverak told us that he ran the North Dakota Republican Party for seven years and that bloggers (like Rob Port, who covers ND politics on his Say Anything blog) made his life hell. He found that bloggers weren't satisfied with press releases and pat answers. The mainstream capital press corps, on the other hand, often knew of information that might hurt their friends in government, but they wouldn't ask the question that would elicit damaging news. Stverak learned that electing Republicans wasn't enough to have the kind of government he wanted; he said that North Dakota's state government, dominated by the GOP, has cronyism and corruption as bad as anything you'd find in a Democrat-dominated state.

Stverak said there wan't enough money in America to put a reporter in front of every public official, but America came into being with ordinary citizens who took on the most powerful professional army in the world.

So it's our job as citizens and grassroots activists to hold our elected officials accountable for keeping their promises and serving the public interest. That's even true -- especially true -- for those officials who are of the same party and who profess to adhere to the same political philosophy. And that brings us back to Oklahoma Gov. Mary Fallin and what Stephen Moore had to say about her.

Red States vs. Blue States: A natural experiment in policy and prosperity

Moore spoke about the growing Red State / Blue State divide, as states pursue vastly different policies on taxation and regulation. Moore has observed in his travels that the United States is divided culturally and politically along regional lines in a way that hasn't been true since the Civil War. While the GOP lost nationally in 2012, it continued to make gains in the South, with Arkansas the latest conquest at the legislative level, a Republican majority for the first time since Reconstruction. Meanwhile, in Massachusetts, Democrats have 37 out of 40 seats in the State Senate.

Red States pursue low taxes and more economic freedom, while Blue States pursue higher taxes and more regulation, setting up a "natural experiment." We can see which policies are successful by watching where the growth occurs. "If [the Blue State] model works so well, why is California in complete collapse, and why is Texas booming like it's never boomed before?" California has lost 850,000 jobs over the last five years; Texas has gained over 500,000 jobs in the same period. "Did that happen by accident? No, policy matters." California has a 13.3% top state income tax rate and has passed cap-and-trade; Texas has no state income tax and no industry-punishing carbon taxes.

The coming income-tax-free region: Will Oklahoma be included?

Moore told us there are several states that have a good chance of eliminating the state income tax in the near future, including Kansas, Oklahoma, and Louisiana, and the possibility of an entire region of the country being income-tax-free. The South will rise again -- economically -- while Blue States raise their taxes and drive economic productivity out of their states for friendlier climes.

Prosperity is like the wind, moving from high pressure to low pressure, and carrying jobs along with it. The problem with an income tax is that it's a tax on productivity, and when you tax something, you get less of it.

Just last week Moore and his fellow economist Arthur Laffer expanded on this theme in an op-ed in the Wall Street Journal, "The Red-State Path to Prosperity"

Among the 10 fastest-growing metro areas last year were Raleigh, Austin, Las Vegas, Orlando, Charlotte, Phoenix, Houston, San Antonio and Dallas. All of these are in low-tax, business-friendly red states. Blue-state areas such as Cleveland, Detroit, Buffalo, Providence and Rochester were among the biggest population losers.

This migration isn't accidental. Workers and business owners are responding to clear economic incentives. Red states in the Southeast and Sunbelt are following the Reagan model by reducing tax rates and easing regulations. They also offer right-to-work laws as an enticement for businesses to come and set up shop. Meanwhile, the blue states of the Northeast, joined by California, Minnesota and Illinois, are implementing the Obama model of raising taxes on businesses and the wealthy to fund government "investments" and union power.

The contrast sets up a wonderful natural laboratory to test rival economic ideas.

Oklahoma and Gov. Fallin get a mention in the column. It's one thing to say we could eliminate the state income tax, but should we? Kansas may put us in a position where Oklahoma must move toward income tax elimination in order to attract and retain businesses.

Meanwhile, in the South, watch for a zero-income-tax domino effect. Georgia can hardly sustain a 6% income tax if businesses can skip across the border into neighboring states like Florida, Tennessee or South Carolina. Oklahoma Gov. Mary Fallin has told her legislature that the Sooner State will face high economic hurdles in the future if it is an income-tax sandwich between Texas and Kansas.

Fallin lack of fortitude; Chamber-made betrayal

I raised my hand to ask a question, and as soon as I mentioned that I was from Oklahoma, Moore took off with an observation about eliminating the income tax here: "I don't understand why Oklahoma can't get this done. I've been there six times in the last two years, and I like your governor a lot. I just don't know if she has the fortitude.... Oklahoma's a perfect example of a state that could eliminate its state income tax."

That was in fact what I was going to ask about, and in response, I mentioned that the pressure against income-tax elimination was not coming from the Left, but from the chambers of commerce. "Don't even get me started on State Chambers of Commerce! In most states they're a disaster." The problem, Moore said, with chambers of commerce is that they "represent the incumbent business powers.... What's great about capitalism is that capitalism leads to challenges against the incumbent business powers.... They want to protect their own industries."

Moore told of the recent betrayal perpetrated in Virginia: In 2011, Republicans finally gained control of the legislature and the governor's office. The day before his talk to us, the Republican governor and legislature of Virginia passed a billion-dollar tax increase, which Moore called "a total abomination... a total Benedict Arnold," a slap in the face of those who worked so hard over 30 years to elect Republicans. And it was done, Moore said, at the urging of the chambers of commerce, the construction industry, and other industries that stand to benefit from bigger government.

Brownback's charge; Fallin's retreat

Gov. Fallin announced a bold target in her 2012 State of the State address: a proposed top rate of 3.5%, with a 2.25% bracket for most middle income families, and no income tax at all for those making less than $30,000. She didn't make any progress at all toward that goal last year. This year, she meekly requested a top rate of 5%, which applies (like the current top rate) to anyone making more than $8,700.

I didn't expect bold leadership from Mary Fallin. That's why I endorsed and knocked doors for Randy Brogdon in 2010; you can see my concerns in the links below, concerns that seem to have been borne out.

Like Oklahoma, Kansas has Republican supermajorities in both houses of the legislature. Last year, when Kansas Gov. Sam Brownback faced opposition to his tax cut plan from moderate/Chambercrat Republican legislators, Brownback supported their challengers in the primary, defeating nine incumbent state senators.

Time to hire someone new to do the job?

Gov. Fallin could have done the same thing last year. She could have joined forces with grassroots conservatives to punish legislators who were susceptible to the persuasive lobbyists that Fallin blamed for the defeat of her tax cut initiative. The defeat of a few Chambercrats might have put some fear into those that survived.

Conservatives did manage to exert enough pressure to change Fallin's mind on Obamacare implementation. She's under a lot of pressure from the left and the Chambers to cave on that issue, and we need to encourage her to stand firm. At the same time, we need to let her know we expect the same kind of firm resolve to cut tax rates and the size and scope of government here in Oklahoma.

If a Republican governor can't cut taxes and control spending with super-majorities in both houses, it's time to look for a replacement who can.

FROM THE BatesLine ARCHIVES:

July 6, 2010: Fallin plans lobbyist meet, skips grassroots event and forums
July 20, 2010: Mary Fallin disparages following the Constitution as "the easy way out!"
July 24, 2010: "Fallin-esque" vs. Brogdon's specific plan

Photo of Gov. Fallin from her official website.

MORE elsewhere:

Rob Port reports that North Dakota Governor Jack Dalrymple's leadership is missing in the midst of a crisis in that state's higher education system.