OU President Asks State To Give More Money To Education

Sunday, September 16th 2007, 2:41 pm

By: News On 6

NORMAN, Okla. (AP) - Following the largest tax cuts in state history, University of Oklahoma President David Boren is calling for a moratorium on further cuts and more investment in higher education to create a knowledge-based economy that he said will produce long-term benefits in new businesses and good jobs.

A former Democratic Oklahoma governor and U.S. senator who authored legislation to abolish the inheritance tax between spouses at the federal and state levels, Boren said cuts to the state income tax and other taxes that will reduce state revenue by more than $600 million a year are as far as the state should go.

``I think we ought to have a moratorium on tax reductions right now,'' Boren said in an interview with The Associated Press. ``I think we're bumping the limits and I think we certainly don't need to proceed down that path.''

Boren, 66, said that when he was governor 30 years ago, 42 percent of OU's budget came from appropriations by the Legislature, with the balance coming from tuition and fees, grants and contracts, private donations and a variety of other sources.

This year, state tax dollars will provide only 21.5 percent of the $713 million operating budget for the OU campus in Norman and just 7 or 8 percent of the $632 million budget for the OU Health Sciences Center in Oklahoma City.

As public funding has declined, tuition and fees paid by students has increased, Boren said. ``It's almost a dollar for dollar trade-off,'' he said.

In 1985, tuition and fees accounted for 9.9 percent of the budget for OU's Norman campus. For the fiscal year that began July 1, tuition and fees make up 22.7 percent of the budget, more than the state allocates to the school.

``We've pushed the tax cut envelope about as far as possible and I think what people in Oklahoma really want is excellence,'' Boren said.

Investing state tax dollars in colleges and universities and other research institutions will produce economic results, he said.

``It's very tempting to give in to the Siren song of tax cuts. I realize that,'' he said. ``I always want to keep taxes as low as they can possibly be."

``If we really want to put more money in the pockets of Oklahoma citizens so they can spend it the way they want to, ironically I think investment is the best way to do that right now than some temporary tax cuts that won't amount to much. Most people won't even notice.''

Boren's comments received mixed reaction from the Republican state lawmaker who authored legislation earlier this year to accelerate income tax cuts that were approved last year.

Rep. Randy Terrill, R-Moore, chairman of the House Revenue and Taxation Committee, said Oklahoma's income tax rate is too high and Boren's call for a moratorium on tax cuts is premature.

Oklahoma's maximum income tax rate has been reduced from 6.65 percent three years ago to 5.65 percent this year. The rate will fall to 5.5 in January and eventually to 5.25 percent if state revenue meets a growth trigger.

``Whenever the state enjoys a protracted period of prosperity where we are enjoying surpluses in state government, the taxpayers, the people who actually create the wealth, ought to share in some meaningful way in the prosperity,'' Terrill said.

However, he said he agrees with Boren's vision of a knowledge-based economy driven by higher education and research institutions. While cutting taxes, lawmakers have increased spending in higher education and the state's budget for colleges and universities topped $1 billion for the first time last year.

``We think we have to be careful in balancing our tax-cut agenda with targeted spending increases, especially at those core and essential functions of state government,'' Terrill said. ``We have been very sensitive to that.''

A spokesman for Democratic Gov. Brad Henry, who has signed tax cut bills the past three years, said Henry ``looks forward to discussing this issue in more detail with President Boren.''

``Gov. Henry has always said that you have to strike a delicate balance between tax cuts and preservation of the revenue base that funds vital services such as education, roads and bridges, public safety and so on,'' communications director Paul Sund said.

Boren said the need to diversify Oklahoma's economy became clear during his service as a state lawmaker and governor after experiencing the economic impact of boom-and-bust cycles in Oklahoma's oil and gas industry.

``Economies that are going to remain strong have to be built upon knowledge, they have to be built on what we would call intellectual property, research that results in new discoveries, that results in patents, that results in new businesses, that results in the creation of jobs here,'' Boren said.

He said OU plays a critical role in that effort. The school has attracted $252 million in externally funded research and training grants this year, the most ever. It played a key role in development of the National Weather Center in Norman, which has attracted private-sector companies and high-paying jobs.

Development of the OU Health Sciences Center has spurred the growth of Oklahoma's bioscience industry, he said. Just a decade ago, only about 8,000 people were employed in biosciences in the state. Today, an estimated 40,000 people earn a living in the field.

``The University of Oklahoma has become the largest engine for economic progress and diversification of the state's economy, the largest single source,'' Boren said. ``Over time, this is going to change the face of Oklahoma's economy.''