As Sooner fans head south for the OU-Texas game next week, they will encounter a phenomenon most of us are familiar with: as you cruise across the Red River suddenly the road gets noticeably smoother. The painted lane stripes get a little brighter and the roadside “Welcome to Texas” visitors’ center gleams in the sunlight, a modern and well-maintained reminder of how much more money the Lonestar State spends on public infrastructure than little old Oklahoma.
Or does it? Why are the roads so much, well… better in Texas? Turns out, it isn’t the amount of money spent, at least not when compared to the overall size of the state’s economy and personal income of its inhabitants. Research conducted by 1889 Institute’s Byron Schlomach reveals that Oklahoma actually spends significantly more on roads than Texas as a percentage of both state GDP and personal income. And that was data from 2016, before Oklahoma’s tax and spending increases of recent years. The gap is likely greater today.
Here are the numbers: Oklahoma spends 1.5% of its citizens’ personal income on highways (adjusted for cost of living); Texas spends 0.99%. This means that, as a percentage of its taxpayers’ income, Oklahoma spends approximately 50% more. When expressed as a percentage of the state economy, we see a similar picture: Oklahoma highway spending amounts to 1.2% of its GDP, and Texas’ is just 0.8% (again, Oklahoma spends about 50% more). And that doesn’t even take into account the fact that Texas must cover nearly four times the territory of Oklahoma. That’s a lot of road miles.
How can this be? In short, it appears that Oklahoma government is simply inefficient. This same story repeats in other areas. For example, Massachusetts—home to numerous world class hospital systems—actually spends less on hospitals than Oklahoma does (again, not in total dollars but compared to the size of the two states’ economies and personal incomes). In fact, as a percentage of personal income, Oklahoma spends roughly double the Bay State. The same is true when Oklahoma’s spending is compared to other states in higher education, common ed, and corrections. If you peruse the data, you see that while we are not the worst performer in any category, we certainly have room for improvement.
Perhaps, you might say, Oklahoma’s overall GDP and personal income figures are so low as to skew the numbers. That is, maybe there is a certain level of “start up” cost to these large endeavors, and Oklahoma is simply below that threshold. Or maybe other states gain the efficiencies of scale necessary to drive down the overall cost figure. Unfortunately, neither explanation is supported by the data. Several high income states with large economies are also very inefficient in various categories. New York ranks near the bottom of the 50 states in public education spending efficiency, and California performs terribly in prison spending efficiency. This indicates that simply having a lot of money to play with, by itself, does not produce efficiencies of scale or cross a threshold that begins to make the per capita spending picture look better. Moreover, Oklahoma actually ranks comparatively well in the income category when the figures are adjusted for cost of living (12th out of 50 states), so it is hard to say we are inefficient because we have relatively low incomes.
Perhaps there is a more fundamental lesson to learn from these statistics, related to what the old timers called making a dollar stretch. In the short term, we can’t wave a magic wand and have billions more to spend on roads and hospitals and prisons. But we can start considering how efficiently the tax dollars we do spend are utilized. The recent restructuring of state agencies to make them more directly accountable to the Governor is a positive first step, but only a first step. Performance audits of state agencies would assist the legislature in evaluating how efficiently agencies spend money. Competitive bidding laws may need to be reviewed. Perhaps state employees could be incentivized to find cost savings. There has been no shortage of proposals over the years to make government more efficient and effective.
But such proposals are merely words on a page unless they are given life by elected leaders with a commitment to the principle that when the government takes our money, it ought to make each dollar stretch as far as possible.
Maybe then we could smooth out the bumps on the road to Dallas.
The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.