House and Senate leadership understands ARPA money is inflationary, but also necessary
OKLAHOMA CITY (KFOR) - While the country deals with rising prices and growing concerns of a recession, Oklahoma lawmakers are set to spend over $1.5 billion dollars on improvement projects for the state.
On Wednesday, lawmakers from both the House and Senate gaveled in and gaveled out. Voting on the ARPA bills will come on Thursday.
When answering the question on inflation impact, Jon Echols, Republican House Floor Leader, said that the money is already in circulation and the state only has two options.
"There's no option three, we're going to spend them or we're going to send them back to the federal government," said Echols. Adding that the federal government will find a way to spend the money regardless.
Greg McCortney, the Majority Floor Leader in the Senate, said that his district expects him to do what is best.
"Not accepting these funds and allowing them to be spent in some other state or spent somewhere else by the federal government is not in the best interest of the state of Oklahoma," said McCortney.
Both men agreed that the money is inflationary. But since this money was a one-time spend it or leave it, they said it was worth it.
The talk of inflation comes after Governor Kevin Stitt held a press conference on Tuesday calling for the House and Senate to pass a grocery tax cut. The goal, to provide inflation relief for Oklahomans.
"We would go in and cut the grocery sales grocery tax tomorrow. We would do it yesterday. We would do it last week," proclaimed Echols, hinting at the fact that the House was the sole chamber that passed tax cut legislation in the 3rd Special Session back in June.
Senate leadership has been more reluctant to pass permanent tax cuts. .
"We're going to continue to keep our eyes on on a very far horizon and not a short term grocery tax bill this week," said McCortney.
KFOR spoke to an economics professor from OU about the impacts of a grocery tax cut.
"When you consider the fact that a good chunk of Oklahomans and Americans live paycheck to paycheck, even a temporary tax cut would have a benefit," said Benjamin Keen, professor at OU.
Part of the concern for locking in grocery sales tax cuts from Senate leadership had to do with a potential recession looming. Keen said that concern is real.
"The Fed is dealing with an inflation rate of over 8%. It's not dealt with inflation this high in over 40 years," said Keen.
The OU professor confirmed that a recession would dip into the state's revenue.
"Any time GDP falls, state revenues are going to fall," said Keen. "It's because everything is based on consumption taxes - sales taxes - or income taxes. And we would expect both of those either to fall or grow at a much slower rate."