All articles by David Blatt

Education vies for funding down the road

by | March 4th, 2015 | Posted in Blog, Education | Comments (0)

school-children-roadHow do you boost support for education in a year when the state faces a massive budget shortfall? Several bills to provide teacher pay raises have gained initial committee approval, but these bills are unlikely to make it into law given the grim budget situation. The best chance for success for education advocates seems to be a proposal by House Speaker Pro Tem Lee Denney (R-Cushing) that provides a multi-year $600 million increase in education funding, but not for another three years. Yet even this proposal is far from a sure thing.

HB 1682 creates the Securing Education Excellence Fund. The bill is designed to increase funding for common education by $59.7 million annually beginning in fiscal year 2019. The funding increase would come from income tax revenue that is take off-the-top before legislators appropriate budgets for other state services.

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Proposal aims to get a grip on Oklahoma’s business tax breaks

by | March 2nd, 2015 | Posted in Blog, Taxes | Comments (0)
Panelists discuss tax credit reform at OK Policy's State Budget Summit.

Panelists discuss tax credit reform at OK Policy’s State Budget Summit.

Oklahoma’s more than 70 business incentives are one of the primary ways the state attempts to create jobs and encourage businesses to locate and expand in Oklahoma. These tax credits, tax exemptions, and cash rebates also have a significant cost. Each year they reduce the revenue that could otherwise be used for public services by hundreds of millions of dollars.

Policymakers have struggled to determine which incentives are working, which are not, and how the state can make sure it’s getting a strong return on taxpayer dollars. Oklahoma has no formal, ongoing method to measure the effectiveness of its incentives. Though legislators have made attempts to review these programs over the years, lawmakers found that an absence of data, direction, and agency coordination stymied their progress. But a new effort aims to provide the evidence they need to evaluate tax incentive programs and invest in those that work.

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Rainy Day Fund 101

by | February 25th, 2015 | Posted in Blog, Budget | Comments (0)
Photo by Hamed Parham.

Photo by Hamed Parham.

With the state now facing a massive budget shortfall, attention has turned to tapping the Rainy Day Fund to close a portion of the gap. This post gives an overview of the Rainy Day Fund and how it might be used to help close Oklahoma’s current budget hole. The bottom line is that of the $535 million currently in the Fund, up to just under 5/8ths, or $325.5 million, could be appropriated for next year.

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Sleeping dogs of the 2015 session

by | February 18th, 2015 | Posted in Blog, Healthcare, Immigration, Poverty | Comments (0)
Photo by Chris Waits

Photo by Chris Waits

The 2015 session is now underway and it’s clear that this year, as always, will feature heated debates on a multitude of contentious issues, from proposals to expand school choice through vouchers and charter schools to efforts to rein in tax credits to hot-button social issues, such as guns, abortion, and same-sex marriage.

Less noted, but perhaps equally significant, is the low profile of several issues that have been highly contentious in recent years and that many expected to see back on the agenda in 2015. Here’s a review of four issues on which few, if any, bills have been filed and it now appears that minimal legislative action is likely this session.

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Have Oklahoma gaming revenues peaked?

by | February 9th, 2015 | Posted in Blog, Budget | Comments (0)
Photo by I-5 Design & Manufacture

Photo by I-5 Design & Manufacture

Ten years after Oklahoma voters approved gaming compacts with Native American tribes and racetrack gaming, the state is collecting over $140 million annually as its share of gaming revenues. However, years of growth in gaming revenue have now ended, which may be a sign that the gaming market in Oklahoma has reached a saturation point .

State Question 712, which Oklahoma voters approved in November 2004 with 59.4 percent support, had two principal components:

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Four takeaways from the Governor’s budget

by | February 4th, 2015 | Posted in Blog, Budget | Comments (0)
Governor Mary Fallin delivering the 2012 State of the State.

Governor Mary Fallin delivering the 2012 State of the State address.

On Monday, Governor Mary Fallin delivered her State of the State address and  FY 2016 Executive Budget. Her speech emphasized the need to address hurdles in the areas of education, health, and criminal justice that are impeding the state’s progress. However, since the December meeting of the Board of Equalization, which certified some $300 million less revenue for next year’s budget, it’s been clear that efforts to tackle these priority areas would be limited by continued lack of funding.

Here are four key takeaways from the Governor’s budget:

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Budget road certain to be rocky

by | January 27th, 2015 | Posted in Blog, Budget, Taxes | Comments (2)
Photo by _chrisUK.

Photo by _chrisUK.

As we look ahead to next year’s state budget, one thing is for certain: it’s going to be a very rocky ride.

Last month, the Board of Equalization certified $298 million less revenue for next year’s budget than was appropriated this year. As we discussed in this blog post, the initial certification assumes that tax collections will grow next year, despite low energy prices; the shortfall is due to the use of over $400 million in one-time funds from cash reserves and agency revolving funds to balance this year’s budget, as well as a quarter-point cut in the income tax that last year’s Legislature scheduled to take effect at the start of 2016.

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The con-con con

by | January 26th, 2015 | Posted in Blog, Budget | Comments (1)

editing-constitutionA proposal that could lead to far-reaching and radical changes to America’s time-tested constitution is being pushed in states across the country this year. Oklahoma would be well-advised to resist jumping aboard this particular train.

In Oklahoma and other states, bills have been introduced calling for a constitutional convention, or “con-con,” to amend the U.S. Constitution in order to approve a federal Balanced Budget Amendment, among other possible constitutional changes. Under Article V of the Constitution, a convention to amend the Constitution must be convened if two-thirds of the states call for one. In U.S. history, no convention has ever been convened since the one that produced the Constitution in 1787. Instead, all 27 constitutional amendments have been approved first by a two-thirds vote in Congress and then ratified by three-quarters of the states. 

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Higher Education: A sound investment towards Oklahoma’s economic prosperity (Guest Post: Michael Thomas)

by | January 20th, 2015 | Posted in Blog, Education | Comments (0)

MichaelThomasMichael Thomas is one of four 2014-2015 OK Policy Research Fellows. Michael is a Master’s student in the Higher Education and Student Affairs program at Oklahoma State University. He works as a Graduate Research Assistant for the department of Graduate Studies, Outreach, and Research, focusing on the recruitment and retention of graduate students within the College of Education. He aspires to become a Professor of Higher Education Leadership and Policy.

The vitality of higher education is a fundamental and increasingly important determinant of a nation’s position in the world economy. Oklahoma is no stranger to this concept. In 2008, the Oklahoma State Regents for Higher Education contracted with Regional Economic Models, Inc. (REMI) to analyze the economic contribution of Oklahoma’s higher education system on the state’s economy. Examining current and future contributions of higher education through the development of a single-region, 70-sector Policy Insight Model, REMI demonstrated that by 2048, increased earnings from college graduates will contribute $8.825 billion annually to state disposable income. As a result, economic activity will increase, leading to more economic growth for the region.

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One-year price tag for oil and gas tax breaks to exceed $500 million

by | January 20th, 2015 | Posted in Blog, Taxes | Comments (0)

oil productionThe cost of tax breaks for the oil and gas industry will exceed $500 million this year, according to projections recently released by the Oklahoma Tax Commission. This is substantially more than the projections made a year ago, reflecting the growing shift of production to minimally-taxed horizontal wells. The tax break for horizontal production alone is now estimated at a whopping $379 million for FY 2015.

The Tax Commission presented forecasts of gross production tax revenues on oil and gas for FY 2015 and FY 2016 in mid-December. For FY 2015, the OTC projects the state will collect $590.5 million in gross production taxes based on an average oil price of $76.32 per barrel and an average natural gas price of $4.25 mcf. Of this total amount, $63.1 million will be collected at the 1 percent tax rate, which is the rate currently assessed on horizontal wells during the first years of production, and $5.6 million at the 4 percent rate assessed on deep wells.

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