Source: The Working Poor Families Project

Earlier this fall, the Census Bureau released its annual report on poverty in the United States. In 2010, 15.1 percent of Americans, or 46.2 million persons, lived below the poverty level, which was $22,050 for a family of four. Among children the poverty rate was 22.0 percent, while for seniors, it was 9.0 percent. In Oklahoma, the poverty rate overall was 16.9 percent, with just under one in four children living in poverty (see our Oklahoma Poverty Profile fact sheet and this blog post).

As a measure of a household’s financial situation, the official poverty measure is deeply flawed. As we noted a year ago:

 Census Bureau numbers [are]  based on a measure that looks strictly at a household’s cash income and that is pegged to the cost of a 1950′s basic food diet, adjusted for inflation.  The measure has long been criticized as inadequate: among other limitations, it fails to reflect the real costs families face in meeting basic needs; it fails to adjust for regional differences in the cost of living; and it excludes non-cash income and benefits received by low-income families.

This year, the Census Bureau took a major step toward addressing some of the flaws with the official poverty measure by releasing the Supplemental Poverty Measure (SPM). Unlike the traditional poverty measure, the SPM determines poverty status by comparing a more expansive definition of family’s income with a more meaningful threshold designed to reflect the cost of meeting basic needs, like food, clothing, and shelter. The SPM counts tax credits, such as the Earned Income Tax Credit and Making Work Pay credit, and non-cash benefits, such as food assistance and housing vouchers, as income that help families afford basic needs. It also acknowledges the burden of work expenses, like child care, and out-of-pocket health expenses for many Americans. The Poverty and Policy blog provides a clear summary of the new measure’s assumptions and methodology. Read the rest of this entry »

Oklahoma is facing serious challenges when it comes to having the resources to provide the sorts of public services that help create jobs and build a strong economy.

Yet while the need to chart a sound, sustainable fiscal course is urgent, our policymakers too often are flying blind. Legislators routinely make spending and revenue decisions that will have long-term consequences without access to key information about the cost of funding existing obligations in the coming years.

Two recent reports from the Center on Budget and Policy Priorities (CBPP) suggest a pair of sensible budget management tools that Oklahoma should adopt .

• Current services budget: This tool would provide lawmakers and the public with the cost of maintaining today’s level of programs and benefits.
• State PAYGO requirement: It would require all new spending and tax cuts be fully paid for. Read the rest of this entry »

Michael Mazerov is a Senior Fellow with the Center on Budget and Policy Priorities, where he specializes in state and local taxation of businesses. This interview was conducted by e-mail on October 25, 2011. For additional information on combined reporting, see Michael’s issue brief.

David Blatt: What problem is combined reporting trying to address?

Michael Mazerov: Most large multistate corporations are actually corporate groups, with a parent corporation that owns numerous subsidiary corporations.  That structure allows members of the corporate group that are subject to Oklahoma’s corporate income tax to engage in artificial transactions at artificial prices with members of the group that aren’t in Oklahoma, in order to shift profits that are earned in Oklahoma beyond the taxing power of the state.  The profits get shifted on paper onto the books of the out-of-state parent or subsidiaries that Oklahoma doesn’t have the legal authority to tax. Read the rest of this entry »

Though revenue collections continue to show steady growth, state budgets remain under great stress. After three successive years of funding cuts, most state agencies are operating this year with appropriations that are at least 10 percent less than prior to the economic downturn. Even if the economy does not slip back into recession, the prospects are dim that revenues will grow sufficiently to restore funding to pre-downturn levels and begin to tackle our long-term obligations.

Budget-cutting efforts in Washington are adding to the perils confronting the state budget. Federal spending has a major impact on both the state economy and the state budget. The federal government spent $38.5 billion in Oklahoma last year, which works out to $10,256 for each resident.  The largest component of federal spending is for direct payments to individuals for Social Security and Medicare, along with salaries and wages to military personnel and other federal employees based in Oklahoma. Read the rest of this entry »

Now that default has been averted and the agreement to raise the federal debt limit has been signed into law, attention here in Oklahoma has shifted, at least temporarily, from politics back to the weather (or, from the debt ceiling to the sweat ceiling). Although the full implications of the agreement will not be understood for months, or years, it is clear that the deal to lower the deficit will have far-reaching consequences for federal and state budgets and the economy. For those looking for concise analysis of  the agreement’s  fiscal and economic implications, here are a few pieces worth reading:

• Good short summaries of the basic mechanics of the deal are provided by this White House fact sheet and by the Center for American Progress; the full bill and accompanying materials can be found here.
• In a statement by Robert Greenstein, the Center on Budget and Policy Priorities argues that “the deal places the nation on a disturbing policy course and sets what may become important precedents that are cause for serious concern.” The Center is especially worried that the deficit reduction framework set up by the agreement paves the way for cuts of “an unprecedented depth” to discretionary spending programs and makes a balanced approach that includes additional revenues an unlikely outcome. Read the rest of this entry »

Gov. Fallin and other state leaders have set a long-term goal to eliminate Oklahoma’s income tax. One reason frequently offered by opponents of the income tax is that it will encourage people and businesses to move to Oklahoma from other states.

A report released today by the Center on Budget and Policy Priorities shows that this argument is wrong. Major findings of the report include: Read the rest of this entry »

This post by Dave Chandra originally appeared here on the Center for Budget and Policy Priorities (CBPP) Off the Charts Blog.  OK Policy recently blogged about two unsuccessful bills this session to establish Oklahoma’s Health Insurance Exchange.  To learn more about exchanges and their requirements under the new federal health reform law, click here.

The continuing rhetorical battle over health reform shouldn’t obscure the fact that states are taking important steps to implement last year’s historic legislation.  For example, virtually every state has made at least some progress toward setting up health insurance marketplaces or “exchanges,” which will give individuals and small businesses affordable, comprehensive coverage options.  The Affordable Care Act calls for states to have exchanges up and running in January 2014.

California and Maryland have been out front:  both states have enacted laws setting up their exchanges and appointed the boards that will run them.  Now they’re beginning to tackle the key issues that must be resolved for the exchanges to succeed. Read the rest of this entry »

David Stockmann was director of the Office of Management and Budget under President Reagan and once a leading advocate of supply-side economics. Yet In a recent New York Times op-ed, he makes a point most frequently heard from liberals and progressives: America is in a period of rapidly and steeply rising inequality. Stockmann contends that both federal budget proposals, one by President Obama and the other by Republican Congessman Paul Ryan, would bring the nation “dangerously close to class war.” He writes:

This lamentable prospect is deeply grounded in the policy-driven transformation of the economy during recent decades that has shifted income and wealth to the top of the economic ladder. While not the stated objective of policy, this reverse Robin Hood outcome cannot be gainsaid: the share of wealth held by the top 1 percent of households has risen to 35 percent from 21 percent since 1979, while their share of income has more than doubled to around 20 percent. Read the rest of this entry »

The U.S. House or Representatives is expected to vote tomorrow on a federal budget proposal for the coming year that would —  among other things —  force drastic cuts to Medicaid that would harm Oklahoma seniors, people with disabilities, and children.  The budget plan, introduced by Republican Congressman Paul Ryan of Wisconsin, would also shift costs and risks onto our state and likely would force the state to cut payments to hospitals, nursing homes, physicians, and pharmacies.

Medicaid  is a primary source of health insurance for seniors, persons with disabilities, and children. Medicaid is especially important for Oklahomans receiving long-term care  in their homes or in nursing home facilities. It is also a cornerstone of the health care system for hospitals, physicians, pharmacies, nursing care facilities, home health care providers, and other professionals and businesses across the state. About one out of every five Oklahomans – close to 700,000 people -  receive health insurance coverage through Medicaid.

The Ryan proposal would turn Medicaid into a block grant.  Instead of covering a fixed share of a state’s Medicaid costs, the federal government would write a check each year. It would dramatically cut the amount of money it gives to a state, and that cut will grow bigger and bigger every year.  In total, states would receive $771 billion less over the next ten years under the Ryan plan; Oklahoma would lose some $8.2 billion, according to projections from Families USA. Read the rest of this entry »

Last week I attended the annual State Fiscal Policy conference hosted by the Center for Budget and Policy Priorities, the top non-governmental organization analyzing state fiscal policy across the nation. The message we heard was clear and grim: As rough as the past two years of  revenue shortfalls and budget cuts have been here in Oklahoma and across the states, the upcoming budget year, FY ’12, is going to be even worse.

This chart created by the Center presents the story succinctly:

Read the rest of this entry »

The first part of this week I am attending the annual State Fiscal Policy Conference organized by the Center on Budget and Policy Priorities. While most of the conference sessions focus on the fiscal challenges facing state governments – and the need to pursue balanced and fiscally responsible approaches to preserving core public services in these difficult times – the opening plenary featured an informative and convincingly-argued talk on the prospects for the national economy by Mark Zandi, the chief economist for Moody’s Analytics and one of the nation’s most perceptive and widely-respected economic policy analysts. In recent years. Zandi has gained particular prominence both as an adviser to the McCain campaign during the 2008 Presidential election and as co-author, along with former Federal Reserve Vice Chairman Alan Binder, of an important report this past summer that found that federal stimulus measures had a huge and positive impact in turning around the economony and averting a full-scale Depression.

Zandi’s talk, which he titled “Struggling to Hit Escape Velocity,” made three major points about  the economy. The first was that the economic recovery, which had been gathering steam in late 2009 as a result of the spending and tax cut provisions of the stimulus bill passed by Congress in February 2009, has lost momentum over the past six months. Real GDP, which grew 3.3 percent in the second half of 2009, slowed to 2.7 percent in the first half of 2010 and is on pace to grow just 2.0 percent in the second half of this year. This is “painfully slow growth” which will not be enough to forestall further increases in the unemployment rate, which he expects to creep back above double digits in 2011. Zandi identifies two main culprits for the slackening economy: the declining economic impact of the stimulus package and the European debt crisis of earlier this year, which battered stock prices,  reversed growing business and consumer confidence, and slowed private sector hiring.  Although the European crisis now seems to be over, Zandi believes it set back the American recovery by a good six to 12 months. Read the rest of this entry »

We’re nowhere close to being out of the woods. That’s been our message of late on the state’s budget outlook (you can take a look here at our blog post analyzing of the most recent monthly revenue collections and here at the memo (PDF) on the budget we distributed to candidates). While revenue collections over the past 8 months have rebounded 5 to 10 percent from the previous year, they remain well below pre-downturn levels. And even though revenues are recovering, the use of over $1 billion in non-recurring revenues from the federal stimulus bill and state Rainy Day Fund  in this year’s budget to avert catastrophic budget cuts ensures that Oklahoma policymakers will face substantial shortfalls in building next year’s budget. Read the rest of this entry »