Analysis: Would you like to pay less taxes? I’d like to pay less taxes. Who wouldn’t? For the 2024 Oklahoma Legislative Session, everyone is talking about a tax cut, and several proposals are flying through the halls of the Capitol.

Gov. Kevin Stitt has asked the Legislature to pass a tax cut of 0.25 to lower the state income tax from 4.75% to 4.5%. The reduction in tax collections would be approximately $250 million.

The leaders in the Senate have wisely discussed caution to await the latest financial analysis on tax collection projections that come out this month. They would like to see the effects of the tax reductions for both personal and corporate income taxes that passed two years ago.

Oklahoma Attorney General Gentner Drummond is commending the New York Stock Exchange for listening to him and his fellow attorneys general by withdrawing a proposed rule change that would have allowed the listing of “Natural Asset Companies” (NACs) on the exchange. NACs are a novel corporate structure designed to take land off the market to prohibit productive economic uses, which would have negative effects on domestic oil and gas exploration and production he said in a statement today.

“The strict requirements for NACs would have significantly halted the development of natural resources, particularly energy exploration,” Drummond said. “Such a move would have had severe economic consequences for Oklahoma. I applaud the NYSE for listening to the counsel of this coalition of attorneys general and withdrawing this ill-advised and illegal proposed rule change.”

NACs are a new, untested corporate structure created to lease so-called “ecological performance rights” from landowners, including the federal government. NACs manage “natural assets” in lieu of generating revenue. Any “revenue-generating operations” an NAC engages in must be both “sustainable” and consistent with “its primary purpose” of protecting nature. 

The Oklahoma State Treasurer’s office will continue improving Oklahoma’s economy and public investments through time-tested strategies to increase our state’s growing $15.5 billion portfolio. Today’s investment landscape contends with environmental, social and governance or ESG. An idea that once addressed only social responsibility, the name grew in scope and prevalence to become a big part of today’s public narrative. Keeping ESG out of investing is necessary due to its broad goal complexity, unmanageable reporting framework and heavy-handed mandates.

ESG is not intended to create shareholder value. During the November Board of Trustees meeting of the Teachers’ Retirement System, members voted to divest $184 million in pension funds because certain financial institutions were deemed by my office to be supporting ESG causes negative to Oklahoma industries Joseph Cappello, Deputy Chief Investment Officer, told the Teachers’ Retirement System board,

“We are very comfortable if you choose to divest.” Cappello detailed the $123 million in index funds would cost the system $32,700 or 0.026 percent to divest, the $61 million bond portfolio has no estimated cost, as selling this security traditionally has no commissions.