An unprecedented financial crisis drives crucial decisions that impact Oklahomans. After living under “boom or bust” economic policies, we are now paying the piper.
A bureaucratic government needs reforms: too much waste, lack of accountability, spending without regard to long-term effect, excess bureaucracy and antiquated systems. For businesses, this means dysfunction and lack of profitability. It also means we fail to compete for new businesses and resources.
“Status quo” budget planning no longer works. Government has not kept pace with the reforms and efficiencies essential for businesses to survive, adapt and grow. Oklahoma still depends on outdated methods of budgeting. Right now, a new budget is formulated using the prior year’s tax revenues as a guide, like a reverse crystal ball.
But in volatile economic times, it is risky to depend primarily on the prior year’s tax collections when projecting a current budget. This is compounded by politicians that myopically only focus on the current year.
Oklahoma is a big business and must apply methodologies for budgeting similar to businesses. Like corporate shareholders, state taxpayers are investors who depend on the leader ship to govern wisely.
Yet where is the strategic planning used by successful businesses?
Strategic planning is a cornerstone of effective leadership. This state is reliant on one core industry for large tax revenues: energy. Knowing this, leaders remain content to roll the dice every year and rely on estimated projected revenues. We should not kick the bud get problems forward.
Instead, it is time to implement better budget processes and overdue strategic planning. Consolidating and reforming government for efficiencies and diversifying our economy must become a priority.
Facing a $1.2 billion shortfall and no vision, the Oklahoma Legislature has consistently failed to adopt business-like budgeting plans, which could possibly soften this crisis. Businesses do more with less, reserving cash and anticipating reduction in operations. But the state has failed on all counts.
Benchmark Oklahoma revenues ” income and sales taxes ” increased consistently, trending upward approximately 20 percent over the last decade. But budgets were not set by this recognized average increase and were instead influenced by energy gross production taxes, which swung wildly from 2003 until 2006, increasing at one point to more than $1 billion annually. And the budget increased with it.
But reliance on this “boom and bust” industry isn’t smart. It is now time to account for and downsize an inflated budget. Wise planning could have saved large reserves and prudently increased services. In fairness, no one foresaw the severity of this recession, yet systemically, we failed to anticipate cyclical change.
Integrity, confidence and responsibility are leadership essentials. Leaders must diligently act on behalf of those they serve, and act boldly. Our politicians are failing.
It is our responsibility to demand the re-shaping of government into a lean, efficient system with restored accountability and new, business-like management.
Replace those who cannot fulfill their obligation to govern wisely and effectively. Repair broken government.
Busey is chairman and CEO of The Busey Group of Companies.