Deep Drilling Tax Credit Making Difference in Economy

By Jay Paul Gumm, D-Durant

Hello again, everybody! Two years ago this week, several extreme left-wing activists from Oklahoma City passed out leaflets across our area attacking my support for a particular bill.

The bill, which I carried on the Senate floor, was a tax incentive benefiting companies that drill deep gas wells. These are the very gas wells being drilled all across the Senate district I represent and much of southeastern Oklahoma. These wells might not have been drilled except for the incentives I support and these activists oppose.

The drilling is happening in what is called the Woodford Shale formation. This is not a new gas discovery; geologists have known for some time this formation likely contained a great deal of natural gas. Even though everyone was confident the gas was there, it had to be financially feasible to get or it would stay locked in the ground.

The deep drilling necessary to reach this gas is among the most expensive and financially risky. The tax credit helped make the drilling more attractive for the drilling companies.

The tax credit was a good investment because these wells also generate six times the economic activity in surrounding communities than traditional-depth gas wells do. My position has always been that tax policy should encourage good behavior. In my book, the best behavior any company can exhibit is to create jobs and opportunity in Senate District 6.

Already, we are seeing new wealth pouring into southeastern Oklahoma because of this deep drilling into the Woodford Shale formation. The new prosperity is staggering. We have one company reporting it has already paid more than $3 million in royalties to mineral owners in the five counties I represent.

That is just the start because this drilling is the launch pad for even more economic growth. New workers come into the area, while local residents have opportunities to get good-paying jobs on drilling rigs. As the gas rises from deep within the earth, local economies also rise.

The drilling is generating new tax revenues and helping to boost hope and create even more jobs across our region. The “deep-drilling tax credit” was an investment in the future of southern Oklahoma that could pay dividends for generations.

For most of Oklahoma’s history, oil and gas has been the sea on which this ship of state floated. Even so, our area has been pretty far removed from prosperity energy brings; now, this resource the Lord has given us is helping to generate prosperity here in our area.

We are taught from an early age that the Lord helps those who help themselves. The deep-drilling tax credit was a way for us to help ourselves. It was the right policy for our state and for our area; I am proud to continue supporting it.

Thanks again for reading the “Senate Minute,” have a great week, and may God bless you all.

Trying To Stop Property Taxes From Increasing

During the last few days, chances are that you received your property tax bill. I would also guess that this bill reflects a 5% increase in your assessment over last year. This is the time of year when my office receives calls from citizens experiencing the challenge of coming up with a larger than ever property tax payment. Second only to the issue of road improvements, I believe the issue of higher property taxes is the one I hear about the most.

I believe the property tax to be the most unfair form of taxation. This tax punishes a person for simply daring to own something and taxes them over and over again for the same property.

In 2007, I co-authored a bill by Oklahoma City State Representative Guy Liebmann which would have decreased the 5% assessment increase cap to 3% or the increase in the consumer price index, whichever is lower. Liebmann's bill passed in the House but, unfortunately, has been held up in the Senate. It is my hope that the Senate will take action on the bill this year, as it is clear that people are getting more and more frustrated with the increases they are experiencing. As property taxes continue to rise, more citizens are being priced into buying a house beneath what they could otherwise afford. Others are faced with the dilemma of whether to sell their property or pay the high tax rate. The challenges faced by individuals with fixed incomes is forcing the legislature to make exceptions to the number of people who have to pay increased rates. These exceptions place the burden of paying property tax onto a shrinking base of property owners.

While the average property tax bill has shot skyward, the homestead exemption which allows homeowners to pay a lower bill has not increased over the years. Logan County Commissioner Mark Sharpton has requested that I propose legislation which would increase homestead exemption. I also plan to propose indexing homestead exemption to the consumer price index so that over time, the exemption will continue to grow with inflation.

The passage of these two pieces of legislation would be a good start to slowing the increase of property taxes. However, in order to have true reform and property tax reduction, we must address the problem at its source. Approximately 85% of property taxes go to Oklahoma's education system. This money is in addition to the approximate amount of 3.5 billion dollars that we appropriate for common and higher ed. A report by the Oklahoma Council on Public Affairs demonstrates that Oklahoma taxpayers probably spend about $12,000 per year for each student we educate.

Oklahoma should offer a $4,000 tax credit to those parents who choose to educate their children in the private sector where they can receive a more cost-effective education. This would empower parents with the ability to determine where their children receive an education (one of the most important choices a parent will make) and would save taxpayers about two-thirds of the cost we are now paying. This common sense move would allow for dramatic reduction in property taxation and significantly shrink the size of state government. Smaller state government means the government will have less influence over our lives, an important value I believe most Oklahomans share. This is one of the reforms I am committed to supporting as your State Representative.

More Blessings Right Around the Corner

By Senator Jay Paul Gumm, D-Durant

Hello again, everyone! Thanksgiving is a time my thoughts turn to my late mother, Harlene Taylor Gumm. It was the most special of all the holidays for her because she had one of her prayers answered over Thanksgiving Weekend 1963.

Just like Deena and me, my parents were told they could never have children. All that changed on Thanksgiving Weekend 1963, and this story is one that gave Deena and me hope during our struggle to become parents.

Bear in mind that this happened when medical science was not as advanced as it is today. My parents had been married for three years, and mom taught home economics at Calera High School.

Doctors told my mother she could not bear children. Despite every effort known to medical science at the time, Mom was given the same prognosis Deena and I once heard: "You cannot have children."

In early 1963, my mother started feeling unwell. Countless trips to doctors followed and several series of tests were inflicted upon her. Specialists in Dallas and Oklahoma City were stumped.
Mom thought she might be expecting, but every test available at the time came back "negative."

Mom was put on a strict diet and she lost weight. Those of you who knew my mother know she was as tough as they came; it didn’t matter whether she felt bad or not, she would be at work. So, she kept working and kept feeling worse.

After Thanksgiving Day dinner at my grandparents’ house, Mom and Dad went home and Mom began to feel extremely bad. As she always did, she toughed it out overnight but went to the old Durant Hospital the next morning.

To the nurses and doctors, she was in serious distress; some feared she might be dying. Mom’s local doctor thought she might be trying to pass a kidney stone and ordered an x-ray of her abdomen.

That x-ray was the first picture ever taken of me. To his dying day, that doctor called me "Rocky" after the stone he thought I was.

Once everyone knew what was going on, I was born shortly thereafter. No one, except the Lord above, had any idea I was coming. Expected or not, a child was the answer to a prayer. Four decades later, that same prayer was answered for Deena and me. The story of my birth gave us hope, and we share that hope with every couple trying to become parents.

When I was old enough to understand the story of how I got here, it made me think of this: We all have much to be thankful for, and there may be more blessings right around the corner. May you and your families find new blessings right around the corner.

Thanks again for reading the "Senate Minute," happy Thanksgiving, and may God bless you all.

Paying Oklahoma Politicians

Recently, the board that functions as the oversight authority for how Oklahoma's Senators and Representatives are compensated, made the controversial decision to provide part-time legislators with the same health benefits that full-time state employees receive. This equates to an approximate twelve thousand dollar per year raise for Oklahoma legislators.

The decision reminded me of when I was in grade school and our principal told us the story of how at the Constitutional Convention, Benjamin Franklin spoke in opposition to paying a salary to the President. Franklin stated, "There are two passions which have a powerful influence on the affairs of men. These are ambition and avarice; the love of power, and the love of money. Separately each of these has great force in prompting men to action; but when united in view of the same object, they have in many minds the most violent effects. Place before the eyes of such men a post of honour that shall be at the same time a place of profit, and they will move heaven and earth to obtain it." My principal felt that Franklin's point of view was correct and his story instilled in me the belief that is important for public service to be a sacrifice and not an occupation.

I believe another important principle felt by our founding fathers is that of the "citizen legislature." Instead of having a government that is run by professionally paid politicians, the government should be overseen by a group of citizens who are "sacrificing" a few years of their lives to do their duty as citizens. Once that duty is performed, those citizens will return to the populace to live under the same laws they helped to make.

There is little doubt that Oklahoma's legislators currently make enough at their jobs for their work to be considered an occupation. Oklahoma possess the third highest paid part time legislature in the nation and it appears that when cost of living is factored in, they are the highest paid part-time legislators in the nation. Oklahoma's elected officials have fantastic retirement benefits. An Oklahoma elected official who stays in some sort of state position for 25 years will likely make a higher salary in retirement than he or she made in office. And now, Oklahoma's part-time elected officials will share the same benefits plan that full-time state employees have.

There are those who will state that in order for us to attract top talent to Oklahoma's legislature, we should pay a high salary. I respond to these arguments by pointing out that although Oklahoma has had one of the highest paid legislatures for many years, the state still appears to trail other states in many of the key indicators of economic health. Conversely, a state like Texas, which pays its legislators approximately 1/7th of the salary Oklahoma pays, fares much better economically. This seems to suggest that strong economic prosperity correlates better with low legislative pay.

Others will suggest that a highly paid legislature is less susceptible to bribery. In response I simply point out Oklahoma's history of legislative corruption, including the ongoing fallout from the federal prosecution of former Senator Gene Stipe and his legislative allies. It seems to me that a significant legislative stipend only wets the appetite of Oklahoma's leaders for more money.

I believe as did Franklin that public service should be a major sacrifice for those seeking it. I am committed to supporting legislation that would bring Oklahoma closer to this goal.

Should Private Companies Be Allowed To Own Our Roads?

Should Private Companies Be Allowed To Own Our Roads?

As a member of the House of Representative's Transportation Committee I was able to closely observe one of the most controversial issues of the past legislative session. At issue is Oklahoma's membership in a group known as the North America SuperCorridor Coalition (NASCO), the desire of big corporations to enhance the movement of Chinese-manufactured goods throughout North America, the possible privatization of new state and federal highways, NASCO's desire to deploy sophisticated tracking devices along I-35 and clear attempts towards the creation of a closer economic and political union between Canada, the United States and Mexico.

The depth of this subject matter is nearly overwhelming and because of it's complexity I only have time to talk about a small segment of it in this update. I take the duty of informing my constituents of these events very seriously and thus look forward to continuing to update you on these issues in the future.

In last week's update I talked about what I feel is the inappropriate and frightening alliance of big business with big government. Nowhere is this abuse more clear than when big companies buy long term leases of public roads. You can only imagine how your power as a citizen is minimized when a big (and likely foreign owned) corporation has complete control over a public road on which you depend in order to get where you need to go.

The issue of private ownership of public roads is in its infancy in Oklahoma but growing after Texas has planned out the construction of the Trans-Texas Corridor (TTC) network over the next 50 years to be financed by Cintra Concesiones de Infraestructuras de Transporte, S.A., (Cintra) a foreign investment consortium based in Spain. Cintra will own the leasing and operating rights on TTC highways for 50 years after the construction is complete.

The TTC initiative begun in 2002 focused on building a superhighway parallel to Interstate 35. It seems that proponents of this privately owned super transit corridor intend on linking Mexican ports through Oklahoma to an inland port to be located in Kansas City and from there to various distribution points throughout North America.

A communist Chinese owned company known as Hutchison Ports Holdings is paying billions to deepen the Mexican ports of Manzanillo and Lazaro Cardenas in anticipation of the arrival of container mega-ships capable of holding up to 12,500 containers currently being built for Chinese shipping lines. These ports would likely serve as a starting point for Chinese goods that would be distributed into the United States along the super highway corridor.

The aforementioned group, NASCO, is not only advocating for an I-35 trade corridor but is also pushing for the creation of a tracking system known as NAFTRACS to be put in place along I-35. This technology would be developed in part by a joint venture owned by Hutchison Ports Holdings. NAFTRACS has been described by NASCO as a program that provides management tools for mitigating or minimizing traffic congestion and collecting the status of certain items in transit. The data generated by these sensors would be shared with the joint venture although it is not clear if the data would be shared with the Chinese government owners of the joint interest. In May of this year, NASCO requested that the Oklahoma Department of Transportation sign a letter stating that ODOT was looking forward to participating in the tracking program.

During the last legislative session it was discovered that Oklahoma is a dues paying member of NASCO. In other words your taxpayer dollars are helping finance this organization. In the next few weeks Senator Randy Brogden (R-Owasso) will be filing a bill which I intend to co-sponsor that will remove Oklahoma from theNASCO coalition. And, as your Representative I am committed to opposing any attempts to allow private ownership of public roads.

Tax Cuts Vrs. Pork

Last week I was surprised when the leadership of one of the groups which has traditionally supported smaller government came out in opposition to reducing taxes. The comments were made by leaders of the Greater Oklahoma City Chamber of Commerce and the Broken Arrow Chamber of Commerce at a recent hearing of the House of Representative's Economic Development and Financial Services Committee.

I have always articulated the common sense belief that the best way to reduce the size of government is through reducing the level of taxation. With less money, the government will naturally tend to prioritize the limited number of functions it should be involved in and leave the rest to the free market. I have also observed that groups who oppose tax relief are probably afraid of having a pet program of their own de-funded by this prioritization process.

It has become clear that the leadership of the Greater Oklahoma City Chamber of Commerce understands this viewpoint all too well. And, shockingly, they appear to fear that if state government continues to cut taxes, one of their pet programs may not be funded to their level of satisfaction.

The pet program is known as the Oklahoma Opportunity Fund. It is funded with $45 million of our taxpayer dollars. Most of that money has already been spent. Because the manner in which the fund was created has been ruled unconstitutional, the sole discretion for how the money is spent appears to have been left to Governor Brad Henry. Henry recently approved spending $10 million out of the fund on improvements benefiting a privately owned airline.

In opposing the continuation of tax relief for Oklahomans, the economic development director of the Broken Arrow Chamber of Commerce said, "I would take the Opportunity Fund over future tax cuts in a heartbeat."

I do not believe it is right for the government to take money away from taxpayers and give it to targeted businesses. I certainly do not think it is right that politicians are given the power to play God when it comes to deciding who the winners are in the business world. The process of government subsidizing business operations is completely contrary to the important free market principles that empower consumers to decide who will be successful, based on which business is providing the best product at the best price.

I do not believe it is appropriate for chambers of commerce to advocate for a fund that benefits such a small number of business. This is at the expense of all the hard working business owners across Oklahoma who are forced to pay high taxes which inhibit their ability to grow their own businesses.

And, I do not think it is right or fair for Opportunity Fund money to be used to entice new businesses to move to Oklahoma when they will be competing with businesses that are already in Oklahoma. Taxing one business and then giving money to a competitor is not right.

This latest position reflects one more step in what is becoming a disturbing trend. Big business is partnering with and being empowered by big government. I believe it is important for the small business members of the Chambers of Commerce across Oklahoma to reassert themselves and reclaim control of the organization that is supposed to represent all Oklahoma businessmen, not a select few.

Veterans Day This Weekend

To Readers of the Legislators' Blog:

This weekend, Americans will stop to honor the men and women who secure the freedom we enjoy as a birthright. Veterans Day is a special holiday, and while this is an addition to my regular "Senate Minute" blog, I wanted to share my Veterans Day Address from the 2006 Durant Veterans Day Ceremony with regular readers of the Oklahoma Legislators' Blog.

This is a weekend to honor and remember those who sacrifice so that we may be free. May God bless our veterans, and may God bless the United States of America.

Jay Paul Gumm
Senator, District 6