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Oklahomans are a fiscally conservative people. Reputable public opinion surveys indicate that Oklahomans think taxes are too high and that state government wastes too much money. By a wide margin, Oklahomans prefer cutting state spending to raising taxes, and they believe the state’s budget should not grow faster than their family budget.
A Taxpayers’ Bill of Rights (TABOR), modeled after a similar constitutional amendment in Colorado, is the tool Oklahomans need to help manage the size of their government. In 1992, Colorado voters passed TABOR by citizen initiative, amending the state constitution to (1) limit the growth in state revenue and spending to the growth of population plus inflation, (2) ensure surplus revenue above this amount is returned to taxpayers, and (3) require voter approval for tax increases or any weakening of the amendment’s limits. As a result, Colorado taxpayers have received more than $3 billion in surplus revenue since 1992.
This paper examines how Oklahoma would benefit from a similar Taxpayers’ Bill of Rights proposal. It begins with a thorough examination of recent trends in the Oklahoma economy and the public sector as well as the state’s current fiscal problems. Next, it outlines a TABOR proposal for Oklahoma. Importantly, this includes identifying ways Colorado’s TABOR can be refined and improved upon – specifically, by the creation of emergency and budget stabilization funds for Oklahoma.
This paper simulates how a TABOR amendment would have affected Oklahoma’s fiscal condition had it been implemented in 1991. In all, the TABOR amendment would have stabilized the budget over the long term while providing significant relief for Oklahoma taxpayers. Specifically, under TABOR, the state would have amassed a budget stabilization fund of $317 million that would have been used to offset the budget shortfall when the budget crunch arrived in 2002. In addition, according to conservative estimates, $581 million would have been returned to taxpayers in the form of tax cuts or rebates.
While this paper suggests that a well-drafted Taxpayers’ Bill of Rights amendment would benefit taxpayers and the state’s long-term fiscal condition, special interest groups have too much at stake to allow common-sense government constraint. Indeed, TABOR can be understood in terms of a battle between citizens and special interests, i.e., between taxpayers and tax consumers. Taxpayers want to limit the burden imposed by government taxation and spending. Special interests seek to preserve what they perceive to be their rights to that spending. But as more Oklahomans become aware of the need for fiscal discipline, TABOR could become a reality in Oklahoma.
To read the entire report click here: The A Taxpayers' Bill of Rights (TABOR) for Oklahoma