What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week OK Policy reported on SB 517, a bill that would sunset 20 tax credits, including one relied on by 1 million low- and medium-income Oklahomans.  If Oklahoma eliminates this credit, it would put us in the company of just Mississippi and Alabama as the only states that provide no relief for grocery taxes.  The Tulsa world reported on OK Policy’s ideas for improving the tax code and adequately funding public structures.

We released the April edition of Numbers You Need this week, our monthly bulletin of key economic and budget trends, which shows a slow and steady economic recovery for Oklahoma.  For a closer look at two key indicators of economic improvement, read Tuesday’s blog post, Quick Take on the Economy: Income picks up steam, unemployment edges downward.

Despite the economic recovery and improving revenue collections, the state still faces a huge shortfall for next year.  Yesterday’s blog post explains the “5 percent option” and suggests why we think a portion of this money should be used to make up the shortfall.

On April 29, Oklahoma Assets hosts a Webinar on financial education in public schools.  Yesterday, OK Policy represented Oklahoma Assets at Jump$tart Your Money Day at the State Capitol.

Numbers of the Week

• 6.5 percent – Oklahoma’s unemployment rate, February 2011
• 103 – Drug-free infants born to drug-court participants in Oklahoma, FY07-FY09
• $7,411,299,000 – Annual payroll and receipts of Oklahoma firms with less than 20 employees, 2007
• 9 – Number of states where 30 percent or more of the population is obese, 2009; Oklahoma, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Tennessee, and West Virginia.
• $118 million – Potential revenue generated by eliminating the itemized deduction for state tax payments on Oklahoma returns.

Click here for source citations and archived numbers of the day.

In the Know is a daily synopsis of Oklahoma policy-related news and blog posts.  You can sign up here to receive In the Know in your inbox each weekday morning and the Weekly Wonk each Friday afternoon.

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Oklahoma’s unemployment rate hit 6.8 percent in June, rising one-tenth of one percent for the second straight month and falling just short of the highest rate registered during this recession (6.9 percent from August to October 2009). Oklahoma’s unemployment in June remained well below the national rate of 9.5 percent and was 8th lowest among the states.  However, over the past six months, the national unemployment rate has dropped 0.5 percentage points, while Oklahoma’s rate has remained unchanged.

While Oklahoma’s unemployment rate has plateaued or even inched up, the state is beginning to see some modest job growth (unemployment and employment can both rise when you have more people entering or returning to the the labor market). Total non-farm employment in June was 1,534,200, which is an increase of 17,100, or 1.1 percent, over the past three months. During the same three-month period, employment grew by 0.5 percent for the nation as a whole.  However, despite the recent upturn,  employment remains far below pre-recession levels:

Total employment in June remained 40,900, or 2.6 percent, below that of December 2007, the month which marked the official onset of the recession. Manufacturing jobs in Oklahoma have been hit especially hard, declining by 25,700, or 17.2 percent, compared to December 2007, as have jobs in construction, which are 4,000, or 5.5 percent below pre-downturn levels. Starting six months ago the state began adding back construction jobs, due in part to stimulus funding for road and bridge repairs, while manufacturing jobs have showed more recent signs of rebounding, increasing by 900 in June.

While Oklahoma has lost some 41,000 jobs since the start of the national recession, this doesn’t take into account the job growth that is needed to serve a growing working-age population. According to data supplied by the Economic Policy Institute, which collects and shares monthly employment data, Oklahoma’s working age population has grown by 2.7 percent, or just under 43,000, since December 2007. This yields a “jobs shortfall” of 83,795 as of June – the difference between the actual number of jobs  and the number of jobs if job growth had kept pace with working age population growth since the onset of the recession. Nationally, EPI calculates the job shortfalls since the onset of the recession at 10.8 million.

While we can be hopeful about continued job growth in the months ahead, employment growth will have to become much more robust to serve not only those who are officially unemployed but the substantial number of “missing workers” who have dropped out of the labor force or never entered during the recession, along with those who are involuntarily working only part-time.  All signs suggest this will be a long, painful process, and recent trends indicate that while Oklahoma was late to enter the recession, it will not be as fortunate in making an early exit.

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As can be seen in this chart, state personal income remains slightly below pre-downturn levels. Oklahoma’s  state personal income of $131.2 billion in the 1st quarter was 99.2 percent of the amount in the 3rd quarter of 2008 (amounts are seasonally adjusted at annual rates).  While state personal income for the nation as a whole declined more sharply than in Oklahoma during the worst of the recession, it, too, has recovered to just over 99 percent of pre-downturn levels.

While personal income remains slightly below pre-downturn levels, state revenue collections continue to fare far worse. A new report from the Rockefeller Institute of Government shows that for the nation as a whole, state tax revenues grew by 2.5 percent in the first quarter of 2010, marking the first growth in year-over-year quarterly revenue collections since the third quarter of 2008. However, in Oklahoma, data we compiled based on the monthly revenue reports from the State Treasurer’s Office showed revenues for January-March 2010 (Q3 of FY ’10) remaining 6.8 percent below one year ago. More strikingly, quarterly revenue collections for January – March were a full 22.3 percent below collections for the same quarter in 2008. (Data now in for the April – June quarter shows revenue collections up 2 percent from one year ago but down 23 percent from two years ago).

The Rockefeller Institute report noted that, “Tax revenue is highly related to economic growth, but there is significant volatility in tax revenue that is not explained solely by one broad measure of the economy.” With unemployment rates still high, natural gas prices still low, and retail sales still weak, it looks like it’s going to take quite awhile longer for the state’s revenue recovery to catch up to the recovery in state personal income.

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This chart (which is based on DHS monthly statistical bulletins available here) shows monthly participation for both programs going back to January 2008: Both programs reached all-time participation highs in March. The 575,898 food stamp recipients that month represented an increase of 28 percent compared to 12 months before and an astounding 40 percent increase compared to March 2008. The growth in Medicaid beneficiaries was slightly less dramatic – the 690,055 Oklahomans covered by SoonerCare in March was a 15 percent increase from June 2008. The two programs now serve between one in five and one in seven Oklahomans, including an especially high percentage of children.

We would expect that as the economic recovery gains steam, these enrollment numbers will begin to level off, as more people regain employment that provides them enough income to cover their basic needs and offers private health insurance. However, we shouldn’t anticipate any swift or sudden drop in participation. Even in healthier economic times, a substantial portion of Oklahoma’s population relies on the public safety net for adequate food and medical care. And even with public programs and a vigorous network of non-profit agencies and faith-based groups, some families still fall short or fall through the cracks. But during these hard times in particular, the support provided  by programs like SoonerCare and food stamps is making the difference in helping hundreds of thousands of economically vulnerable Oklahoman households just make it through from one month to the next.

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The importance of SNAP to Oklahomans is at least two-fold. As shown by the latest numbers released this week by the USDA, food insecurity remains prevalent in Oklahoma, with an average of 14.0 percent of people in the state over the period of 2006-08 indicating that they were unable at times over the year to afford adequate food.  For hard-pressed families, SNAP benefits provide an essential support to family budgets, allowing for the purchase of weekly groceries where otherwise children, seniors, and working-age adults might go hungry or without adequate nutrition. The program now serves one out of every seven Oklahomans and one out of four children. In August, the average monthly SNAP benefit was $127 per person and $296 per household.  This is a substantial increase from last September, when the average monthly benefit was $97 per person and $237 per household. The increase reflects both a 13.4 percent in SNAP benefits that was part of the stimulus package approved by Congress this spring, and declining household incomes, which has left families eligible for higher benefits amounts.

Secondly, the Supplemental Nutrition Assistance Program is of great importance to the economy of the state and local communities. In FY ’09, the USDA value of SNAP benefits in Oklahoma was $592 million, according to the annual report of the Department of Human Services, which is equal to about one-half of one percent of the state’s total GDP (PDF).  SNAP expenditures averaged $166 per person for the entire state population, and exceeded $300 per person in some low-income counties, such as Adair, Choctaw, McCurtain and Seminole. Because SNAP benefits are spent in local grocery stores and markets, they have a powerful economic mutliplier effect – according to the analysis of Mark Zandi of Moody’s Economy.com, every $1.00 increase in federal food stamp benefit produces $1.73 in increased GDP, an amount exceeding any other form of federal spending enacted as part of the stimulus package. Finally,  SNAP benefits are 100 percent federally funded, so the program is not jeopardized by state revenue shortfalls or budget cuts during the economic downturn.

We hope that DHS’ monthly string of new caseload records will soon end as an economic recovery begins to take hold. Until then, there is little doubt that SNAP is serving a key role as a safety net program mitigating the severity of the downturn on Oklahoma families and communities.

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The most striking and challenging numbers concern the continued rise in the number of unemployed. Oklahoma’s seasonally-adjusted unemployment rate in August reached 6.8 percent. That is still substantially below August’s national rate of 9.7 percent, but represents an increase of 2.9 percentage points compared to August 2008. Oklahoma’s unemployment rate is now at its highest level since January 1988, when the state was at the tail end of its long post-oil boom economic slide.  The number of Oklahomans officially designated as unemployed hit 117,600 in August, a 75 percent jump from the same month last year. Meanwhile, some 47,000 Oklahomans received continuing Unemployment Insurance (UI) benefits on average each week in August, a number two and one half times that of a year prior.

As the national recession drags on, increasing attention is focusing on the problem of workers experiencing long-term unemployment. A recent report from the National Employment Law Project (NELP) found that a total of 6 million Americans have been unemployed for 6 months or more, an all-time record since data started being recorded in 1948. An unprecedented one in three unemployed workers has been out of work for 6 months or more.  NELP has also found that since December 2008, the number of jobless workers who find themselves unemployed for at least six months has increased three times as fast as joblessness overall.

The ballooning numbers of long-term unemployed has given increased urgency to implementing a further extension of Unemployment Insurance benefits. For those who qualify for benefits, weekly UI payments provide a vital source of financial support helping to keep families afloat and reducing the pressures on public assistance programs, such as food stamps, and private safety net providers.  Back in February, Congress approved a 13-week UI extension as part of the American Recovery and Reinvestment Act. However, NELP estimates that by December, over 1.3 million of the long-term unemployed are at risk of exhausting their unemployment benefits. This includes just under 6,000 Oklahomans.

Last week, Senate leadership introduced a measure that would extend UI benefits by 14 weeks in all states, along with an additional 6 weeks for long-term unemployed workers in states with the highest unemployment rates. Even as increasing indications emerge of an economic recovery, unemployment is expected to remain at high rates for a long time to come.  Maintaining access to unemployment benefits will not solve the nation’s job challenge but will provide vital support to cushion the blow of joblessness for hard-hit families and communities. We hope Oklahoma’s Congressional delegation will join in supporting the Senate extension of UI benefits and that Congress will take quick action to get the bill passed.

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Preliminary results for the school year finished in May, 2008-09, show a headcount enrollment (in which all students, part- and full-time alike, are counted as one) of 256,012. That’s down slightly from the previous year and the second lowest enrollment in the last five years.

Overall enrollment is down 1.5 percent from the peak levels of 2003-04 and 2004-05. The decline is all at the four-year college level, where enrollment is down 2.4 percent over five years. Two-year college enrollment has risen slightly, 1.6 percent, in the same period.

Why is this bad news? Because we are not making a dent in our state’s already low education level. That makes it harder to move up the income scale and to attract the high-skilled jobs we’ll need in the future.

In 2006, Oklahoma ranked 39th among the states with only 22.9 percent of adults over 25 holding a four-year college degree. Not coincidentally, we ranked 41st in economic output per person and 12th in percentage of residents in poverty. Those numbers will always be entwined. We must work harder on the one we can affect directly.

There is, however, a glimmer of hope. Earlier this month the Oklahoma State Regents for Higher Education announced a slight increase in the percentage of high school graduates attending college, now 52.8 percent. There’s also some evidence that enrollment is higher at many state colleges and universities this fall than the last few years. Time will tell whether those numbers pan out and whether it’s any more than a reaction to a tough job market.

Meanwhile, we can and should think hard about how we can do better. We encourage the regents, campus leaders, and state legislators to examine all the factors that could contribute to our low educational attainment–college funding and affordability, high school dropout and achievement levels, better guidance for students, and culture. We can do better and we’ll have to if we want our young people–and our economy–to prosper.

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Oklahoma’s unemployment rate continued its rapid ascent in April, climbing to a seasonally-adjusted rate of 6.2 percent. This is its highest level since July 2003…The number of Oklahomans receiving benefits from the Supplemental Nutrition Assistance Program (formerly Food Stamps) rose for the twelfth consecutive month in March, reaching an all-time high of 450,057 persons. Similarly, enrollment in the SoonerCare health insurance program increased by 1.2 percent in March and was up by 4.5 percent compared to one year prior.

Contrary to what you’d expect, though, the bad news is not reflected in use of the most basic piece of the safety net. Participation in Temporary Assistance for Needy Families (TANF), a federal block grant that helps fund job training, work supports, and, in some instances, short-term cash payments for low-income single parents, is virtually unchanged. There were only 230 (1.2 percent) more people receiving TANF cash assistance in March than a year ago. How can this be when the economy is shedding jobs and every other measure shows tens of thousands of people in need?

We have remarked before on  participation in the cash assistance portion of TANF and noted that we help a considerably smaller segment of the poor population than most other states. We want to know why, in the face of obvious need, we aren’t helping more of our fellow Oklahomans.

The most recent numbers from the Department of Human Services (DHS) showed TANF caseloads increasing in April. Whether or not this is the beginning of a trend, it is still striking that the long-term trend is downward.

Right now we mostly have data and questions. The Oklahoma TANF cash assistance caseload is falling much faster and more consistently than the national caseload. The figure below shows that Oklahoma’s 2007 TANF participation was 76 percent under the 1997 level, compared to a national drop of 62 percent. We departed downward from the national trend twice, once in 2000-02 and again starting in 2006. Monthly data not shown here indicate the Oklahoma caseload continued to fall well into the current recession while national cases leveled off.

Department of Human Services (DHS) annual reports and data from organizations making national comparisons turn up some other interesting facts. Each one raises important questions.

• Applications for TANF in Oklahoma have fallen every year since 2004. Is there less need for help thanks to robust economic growth or is the relatively low benefit level we offer not worth applying for?
• Most poor Oklahomans do not receive TANF cash assistance. In 2007, only 2.7 percent of people below the federal poverty level received TANF cash assistance. Do the majority of poor people not need or qualify for TANF or are we leaving needy Oklahomans out?
• TANF coverage varies greatly across the state. Of people below the poverty line, just 0.2 percent in Grant County received TANF benefits, while 7.1 percent participated in Oklahoma County. Do the needs vary that widely or does the program operate differently in different offices?
• Oklahoma’s monthly benefit for a single-parent family of 3 has fallen from $306 in 1996 to $213 in 2008, adjusted for inflation. Is this enough to make a meaningful difference in a poor family’s life or prospects?
• Oklahoma spends just 13 percent of federal and state TANF money on cash assistance, compared to a national average of 30 percent. Can we show that our spending for child care, transportation, administration, and other social programs is equally or more effective at fighting poverty than cash assistance?

We’ll keep watching the monthly participation reports to determine if the long slide in caseload has finally been arrested. We’ll also be working to collect better information. We won’t be alone in trying to make sense of the numbers and the policy choices behind them. The Georgetown University Law School’s Peter Edelman is focusing on Oklahoma as part of an article about TANF and its future. The DHS research staff is studying the numbers and looking for answers as well. We hope that you’ll comment if you have any insights or opinions and that you’ll stay tuned for further updates.

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for June, tracking economic and fiscal trends in Oklahoma and the nation. While the bulletin focuses on monthly and quarterly data on jobs, inflation, work support programs, and the like, each month we present annual data on some indicator of Oklahoma’s general prosperity and well-being. This month we look at the trend in the annual number of confirmed cases of child abuse and neglect in the state. The news is decidedly encouraging.

Last year’s total of 11,714 confirmed cases of abuse and neglect is the lowest this decade. The rate of child abuse and neglect cases – 13.0 per 1,000 children in the population -  is the lowest since FY ’94 and is down 35 percent from the peak rate of 20.0 confirmed cases of abuse and neglect per 1,000 children in FY ’98.

While the statewide rate is important, it is worth noting wide discrepancies across counties in the rate of confirmed cases of child abuse and neglect. According to the 2007-2008 Oklahoma Kids Count Factbook put out by the Oklahoma Institute for Child Advocacy, rates for the most recent three year period (FY ’04 – FY ’06) ranged from a high of 42.5 cases per 1,000 children in Coal County to a low of 5.8 per 1,000 in Kingfisher County.

There is not a clear single factor responsible for the decline in child abuse and neglect; rather, those involved in the field point to a combination of policies, practices, and economic circumstances:

• On the policy side, the state has invested heavily over the past decade in front-end prevention programs, such as the Children First Program and Healthy Start initiative, aimed at providing at-risk parents the resources and skills to avoid engaging in abusive behaviors. A newer pilot program, Safe Care, specifically targets families identified at the highest risk for abuse.
• Within DHS, Child Protective Services has been in the process of implementing a new practice model that focuses on conducting assessments, rather than investigations, of families that have been reported to them, allowing for more timely and effective interventions in at-risk situations before actual abuse occurs.
• At the same time, the state’s extended stretch of strong economic growth and low unemployment may also have contributed to the drop in abuse through FY ’08 by providing a greater measure of economic security for children and their families. DHS also points to its ongoing success in increasing child support payments to single parents and linking low-income parents to work supports such as food stamps and child care as reducing the financial and psychological stress on families.

The explanation does not seem to be any decline in the effort to report and investigate suspected abuse: as can be seen from DHS’ annual statistical report on child abuse and neglect, the number of reported cases of abuse and neglect that were investigated has remained steady at just over 60,000 in recent years.

The Legislature has taken a strong interest of late in the child welfare system, passing HB 1734 this past session, which was based on a comprehensive and largely critical audit of the system. DHS was appropriated $1.15 million this year to begin implementing some of the key recommendations from the audit, including establishing a statewide telephone hotline and creating a Medical Passport program.

Hopefully these reforms will complement and reinforce the existing efforts that seem to be making real and long-awaited progress in tackling one of Oklahoma’s gravest problems. However, with the downturn in the economy and parents losing jobs and income, the financial strain on families may once again lead to a spike in abuse. This is all the more reason not to get too comfortable with these numbers, but to be on the lookout for those in your community who may need some extra support in these challenging times. Those who are interested in becoming involved in child abuse prevention efforts should contact the Oklahoma State Department of Health at (405) 271-7611 or through their website. A variety of opportunities exist ranging from the simple to more involved commitments.

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Source: www.uscourts.gov

The May edition of Numbers You Need, our monthly update of key Oklahoma economic and budget trends,  includes some recent data on bankruptcy filings in Oklahoma that provides another indicator of the spread of economic hardship in the state. For the fourth quarter of 2008, a total of 2,956 bankruptcies were filed in Oklahoma. This was an increase of 34.2 percent over the same quarter in 2007. For the year, there were 11,214 bankruptcy filings in Oklahoma, a 23.0 percent increase from 2007, which saw 9,122 filings. Nationally, bankruptcy filings rose at a higher rate than in Oklahoma – 31.4 percent in 2008 compared to 2007 – likely reflecting the recession hitting Oklahoma later. National rankings for 2008 are not yet available, but in 2007, Oklahoma ranked 22nd highest among the states, with a bankruptcy rate of 2.44 per 1,000 population.

The data also allow us to separate out business and non-business filings and chapters of the bankruptcy code.  Personal bankruptcies accounted for 95.9 percent of the filings in Oklahoma in 2008, which was a share very similar to the national average of 96.3 percent. Four out of every five filings (79.7 percent) in Oklahoma were filed under Chapter 7, under which a debtor liquidates non-exempt property in exchange for being discharged of some of their debt. One in five (19.8 percent) bankruptcies were filed under Chapter 13, under which debtors are allowed to retain ownership and possession of their assets, but must devote some portion of their future income to repaying creditors, generally over a period of three to five year.  A tiny number of bankruptcies – just 0.5 percent – were filed under Chapters 11 or 12 of the bankruptcy code.

It is difficult to provide a fair comparison of the volume of bankruptcy filings going back multiple years because of the change in the law that took effect in October 2005, which made it harder to file for bankruptcy protection under Chapter 7. The implementation of the new law led to a massive increase in filings prior to the law’s enactment and a corresponding drop in  subsequent months.  The numbers below suggest, however, that over the course of the current economic downturn, the number of bankruptcy filings may return to pre-reform levels of 2002-04.

Bankruptcy ripples through the economy in the form of empty houses, unpaid medical bills, cars that aren’t bought or sold, and jobs that disappear without warning.  We’ll continue tracking these numbers, mindful that bankruptcy affects more of us than just those reluctantly heading off to the courthouse.

Business and Non-business Filings
(Years Ended December 31, 2002-2008 )

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