Better bets than batteries: Now we can invest in our future without corporate handouts
Just about everyone wants the same things for the place they call home: health, safety, economic opportunity, and connections to people and things to do. But we often don’t agree how best to get there. Some think the capitalist economy will take care of all these things alone. Others think we can spur that economy with collective action like building infrastructure and providing incentives to companies that expand or relocate to our area. Others (including me) think our future is too important to hand off to leave it to private interests and public incentives. Thanks to a perceived setback, Oklahoma now has a chance to show where the last option can succeed where the others have fallen short.
When Panasonic announced it would locate its new battery factory in Kansas rather than Oklahoma, Oklahoma taxpayers were the big winner. We saved $700 million in tax dollars that our Governor and legislators were willing to hand over to Panasonic stockholders and executives. What we “lost” was 4,000 promised jobs, which is roughly the number of jobs added in our state every month. It would have taken 10 years or longer for us to see any return in higher tax revenues from the plant and its workers.
Losing the battery factory is not a loss, it’s an opportunity. Oklahomans should demand that our elected officials use the money we nearly threw away to make smart, shared investments now that will make our state safer, healthier, and, yes, economically stronger, than if we continue to rely on corporate bribery as our main tool for development.
This isn’t ongoing money, but it can bring ongoing benefits
In the August edition of The Oklahoma Observer, Publisher Arnold Hamilton argued we should use the money saved from the battery incentive to turn around our shameful underspending on education, and invest more in future generations. He’s right about the need, but the battery incentive was to come from one-time money in the state treasury, not reliable ongoing revenue from taxes and fees. If we add the $700 million to school budgets this year, we’ll certainly improve teacher retention, school safety, and academic performance, but what happens the next year when the money's all spent? We’d either need to cut funding somewhere else or increase taxes, which our Governor and Legislature won’t do. Instead, I propose spending the money on items we can fund once to make an ongoing difference in Oklahoma’s trajectory.
Smart spending should win out over incentives.
We don’t know why Panasonic chose Kansas over Oklahoma. But I do know Kansas ranks above Oklahoma in most measures of attractiveness. Kansas has a better economy, is safer, is more environmentally friendly, has more highly educated workers, and ranks 17 spots higher as an overall place to live. If I were making corporate location decisions, I’d consider all those things over what incentives were being offered. And it’s time we Oklahomans start to consider that thinking and do something about our less than stellar showing. It’s also time we demand that those we trust with big financial decisions start making smarter spending choices. Here are a few ideas that could move us up those state rankings; readers probably have more and better ones as well.
Every Oklahoman can have access to affordable broadband
In our connected world, broadband Internet access is the key to every kind of growth—human, academic, and employment. Our school children need access to information and the skills to use it. Even the smallest business relies on broadband to make sales, to order and track inventory, and to find customers. We won’t bring in big employers (whether we need them or not) if factories and workers can’t access fast, reliable, and affordable Internet services. Right now, Oklahoma ranks 41st in share of households with broadband connections, behind such small, rural states as Idaho, Wyoming, and Alaska (and also Kansas). Access is worst in the lowest income parts of our state, particularly the southeast. We can’t expect to turn around their struggling economies without providing them 21st Century tools for learning and for doing business.
For just one-third of the cost of the battery subsidies, along with a quarter of about $400 million in new federal funding, we could bring broadband services to every unserved household in the state. Since the state will pay for the infrastructure, costs of maintenance will be easily covered by user charges. Counties, cities, and electric cooperatives could all operate broadband utilities while keeping rates affordable, just like they do with water, sewer, electric, and phone services.
Transportation should be for people, not cars
Oklahoma’s transportation policies are forcing people to use cars, congest the roads, waste energy, warm and pollute the air, and risk deadly accidents, because we spend too much on roads and not enough on public transit. Oklahoma spends just $26 per person per year on public transit services, compared to the national average of $242, according to figures the state provides to the U.S. Census Bureau. We spend 26 times as much on highways and streets as on transit.
We can transform the state by investing some of the battery factory savings in transit across the state, both within and between communities, and we can stretch the money further with $350 million coming from the federal government under the 2021 infrastructure law. We can buy enough buses and vans to provide basic transit services in every community with more than 5,000 people, expand bus fleets in larger cities, and start work on Oklahoma City commuter rail and fast freight and passenger service between Oklahoma City and Tulsa. There will of course be added costs to operate these systems, but we can pay these by spending less on new and expanded turnpikes, state highways, and local roads.
The oil industry has cycles; let’s use the down times to clean up our environment
Oklahoma has long been dependent on the oil and gas industry, and it will play a strong role in the state for decades. But we need to accept the fact that the industry will decline in the face of competition from other fuel sources and growing understanding of the damage oil and gas is doing to health and to the climate. One way to cushion the blow is to enlist our oil companies and their workers in new endeavors. Over time these might include carbon capture and renewable energy.
Until those are more viable, however, the state can use money we planned to spend on renewables to help the petroleum industry clean up. There are 18,000 abandoned wells in Oklahoma and, at the average cost of $76,000, it will cost more than a billion dollars to clean them all up. We should require producers and royalty owners to take on more of this responsibility, but it’s appropriate for the state to jumpstart this work. The federal government has earmarked $78 million, but it will obviously take more. If we combine the federal money with a third of the battery money, we can clean up over 4,000 of these wells, making the land usable again and making communities healthier. We can also help smooth out the boom and bust cycle and support both our petroleum companies and their workers by contracting with them to complete the work when prices are low and the workforce is at risk. State funds should be loans to oil companies that are forgivable if companies minimize layoffs during downturns, as was expected under the Payroll Protection Program.
Oklahoma’s been competing the wrong way; let’s try a different approach
Our elected officials took little time (and no public input) to decide that a relatively few jobs in one small town were worth gambling $700 million of every Oklahoman’s tax money. But why take longshots with public money when there are better odds available? Fortunately, losing the deal didn’t cost us the money. We’ve still got the better part of a billion dollars to place on some virtually sure bets like broadband, public transportation, and oil and gas remediation. It’s time we tell those elected officials to invest in all of Oklahoma and every Oklahoman by creating infrastructure we all need. Aren’t we, and our state’s future, worth it?
An earlier version of this article appeared in The Oklahoma Observer. You can preview some of there thoughtful and challenging articles (and hilarious cartoons) here and subscribe to get news you won’t find elsewhere here.