Politicians thrive in conditions where voters have memory issues with regards to their record. There is often a delay to determine the policy effects of legislation. This will force politicians to try to hide their previous votes that helped shape the crises of today. A key example of that type of politician is Oklahoma Lt., Governor Todd Lamb.
The Sooner State is facing a bit of an educational crisis as teachers continue their week-long walkout as legislators discuss education funding. This forced over 55 of the state’s school districts to close on Friday.
Teachers claim students are ill-prepared in the classroom as equipment and textbooks are in short supply or outdated. In some districts, classes are held four days a week rather than five as a cost-cutting measure. There are even leaking roofs in some buildings. This isn’t something that is stereotypical of NEA strikes focusing on salary demands. While Oklahoma these are serious concerns that students and teachers.
Lamb is now running for Governor. He told Shannon Bream of Fox News that he would end tax exemptions, which he called “special giveaways” and reclaim tax dollars that could be used to plug budget holes. But, you don’t have to look back very far to realize that Lamb is a hypocrite on this issue.
One thing could have helped resolve this issue before it boiled over to this point, ending a “special giveaway” for oil and gas companies. The subsidy was established in the 1990s to help offset the high cost of horizontally drilled wells. It dropped the tax rate from 7 percent to 1 percent to encourage production.
At that time, these type of wells were not only expensive but also experimental. The subsidies were set to expire in July 2015, but the legislature decided to take action to keep this tax break intact despite the decrease in cost of drilling. Now, horizontal wells account for about 70 percent of oil and gas wells in the Sooner State.
If the subsidy expired, the tax rate would have reverted to 7 percent. But, a new bill seeks to set the tax rate to 2 percent for the first three years of production. Some legislator argued that was too generous and advocated instead for a 2-year tax break.
After squeaking through the Oklahoma House of Representatives, this oil and gas production incentive was at a stalemate in the Senate. Lt. Governor Todd Lamb, who now claims he is against these types of giveaways, came in on the rare occasion to cast the deciding vote as President of the Senate. He broke the tie by voting in favor of the subsidy.
The implications were massive to the state’s budget and education in particular. In fiscal year 2015 alone, Lamb’s deciding vote cost the state $470 million in tax revenue.
Tax breaks can be essential to help fuel new technology and the jobs that come with it, but when technology comes up to speed, these subsidies are no longer needed. Industry leaders were also divided over this tax break. Executives at Kaiser-Francis Oil Co., Samson Energy, and Tapstone Energy even openly opposed it.
“‘The intent of the Oklahoma gross production tax holiday has outlived its purpose of subsidizing the experiment of horizontal drilling,” Capstone CEO Tom Ward said about the tax breaks Lamb helped usher in for an extended time.
Lamb’s deciding vote had such a devastating impact on the state’s schools and teachers that late last month, the legislature passed a bill attempting to correct it. One component of HB1010xx is increasing the gross production oilfield tax to 5 percent from 2 percent. This will help alleviate teacher salaries, which are among the lowest in the nation.
Now, Lamb is running for Governor of Oklahoma. While the state is facing a serious educational funding issue, the aspiring Gubernatorial candidate appears to be neglecting his very important role in it.
It’s important to keep taxes low, but there has to be enough revenue to sustain the appropriate infrastructure. Todd Lamb’s subsidy diminished the overall health of the Oklahoma General Fund, which helps fund education. He needs to reflect on his responsibility on the issue.