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Oklahoma
Frank Keating, Republican
Legislature: Democratic
Took Office: 1/95
Grade: D
Frank Keating, a former aide to Jack Kemp, has pursued
a growth-oriented tax agenda for Oklahoma, but the legisla-
ture has impeded him every step of the way. In 1997 Keating
signed into law a major reduction in the unemployment tax.
This past year Keating proposed the biggest supply-side in-
come tax cut of any governor. The Keating plan was to dedi-
cate projected budget surpluses to cutting the income tax in
half--from 7 to 3.5 percent over seven years. After a
bruising battle with the Democrats in the legislature, Keat-
ing emerged only partially victorious. In May he signed the
largest tax cut in Oklahoma history, but the income tax cut
was a mere 0.25 percentage point. Most of the tax cut was
devoted to a grocery sales tax rebate. Keating has also
pushed innovation in state services, including a voucher
plan for students in poorly performing schools and pay for
performance in state agencies. But the budget has expanded
at a troublingly rapid rate under Keating. In his four
years in office, state general fund expenditures have grown
by more than $1 billion, an increase of a whopping 30 per-
cent. The legislature has eagerly spent nearly every penny
of the windfall revenues resulting from the strong economy
in the Southwest. But Keating has not been reluctant to
propose new spending himself. He has been particularly fond
of increasing spending on highways and higher education.
Keating's last budget called for a $103 million increase in
education spending and a $300 million bond issue for state-
wide capital projects. Keating gets very high marks for his
tax initiatives, but he has been below average in restrain-
ing the legislature from spending surplus tax payments.
Score
Grade
Rank
Overall Fiscal Policy Score
40
D
39
Spending Score
37
C
38
Revenue and Tax Rate Score
41
C
38
Amount
1.2%
Average Annual Change in Real Per Capita Direct General Spending through 1996
0.5%
Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996
1.8%
Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999
1.3%
Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98
3.6%
Average Annual Change in Real Per Capita Tax Revenue through 1997
2.1%
Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997
-0.7%
Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999
3.6%
Average Annual Change in Real Per Capita General Fund Revenue 1996-98
-0.7%
Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999
-0.5
Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)
0.0
Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)
13.0
1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)
0.0
Change in Sales Tax Rate, proposed and/or enacted (% points)
0.0
Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)