Remember Mikey from those old cereal commercials? He was the picky eater whose siblings foisted a bowl of  Life cereal in front of him saying, “It’s supposed to be good for you. But he won’t eat it. He hates everything”. As Mikey  gobbles up his cereal, they exclaim, “He likes it!” (The commercial is, of course, available on You Tube).

When it comes to the state questions on this November’s ballot, Tulsa World editor Wayne Greene has been playing the role of Mikey. This summer he penned a series of columns (you can read a couple of them here and here) that explored the eleven constitutional changes that Oklahoma voters will decide this election.  His verdict:

…I haven’t found much to like. Most of the questions on the ballot range from the vaguely obnoxious (reconfiguring the membership of a state commission that has not met one time in state history) to the truly malignant (requiring voters to show government-issued IDs in order to vote). If you’re an all-or-nothing kind of person, the best choice clearly would be to simply go down the line and mark “no” on every question.

However, Greene’s “Life (cereal) – changing moment” came with the eleventh and final proposal on the November ballot, SQ 757, which would increase the cap on the state’s Constitutional Reserve Fund, or Rainy Day Fund, from a maximum of 10 percent of General Revenue Fund collections to 15 percent. Somewhat grudgingly, Greene concedes:

But there is one referendum – State Question 757 – that is a pretty good idea. Read the rest of this entry »

House Speaker Chris Benge this week was joined by Republican Senator Patrick Anderson and Democratic Senator John Sparks in unveiling a proposal to create a new budgetary reserve fund to help cushion the state from a repeat of the extreme revenue volatility seen in recent years. The proposal, introduced as a committee substitute for the Speaker’s bill HB 3032, is for gross production tax collections exceeding a 3-year moving average to be set aside into an Energy Stabilization Fund. When gross production taxes fall below their 3-year average, revenues would automatically flow back to the General Revenue Fund. In addition, interest from the Fund’s principal would be dedicated to enhanced energy recovery research.

Read the rest of this entry »

Our friends at the Center on Budget and Policy Priorities (CBPP) have put out a new paper addressing the acute fiscal crisis facing states across the nation. As shortfalls reach a level where they are seriously compromising the ability of state government to provide core public services, the Center calls for a balanced approach that “ensures that no one segment of residents and businesses bears the brunt of recession-induced deficits.” Their seven components of a balanced approach are:

• Efficiency – focusing on the goals of expenditures and whether there are better ways to reach those goals;
• Using all available resources – employing reserves, rainy day funds, and federal fiscal relief funds responsibly and wisely;
• Scrutinizing all spending, not just what is appropriated through the budget – including programmatic expenditures made in the form of tax breaks;
• Improved collections – aggressively seeking taxes due that are not being paid;
• Tax increases – particularly those that have a more positive impact on the economy than spending cuts;
• Prioritization – making careful decisions based on goals and effectiveness when budgets must be cut; and
• Paying close attention to future impact while fixing today’s problems.

Read the rest of this entry »

As state leaders struggle to find solutions to this year’s revenue shortfalls and funding gaps, it is not too soon to draw lessons from the current state fiscal crisis to design policies that will allow us to respond better the next time the economy falters. This post, the second in a four-part series that will recommend changes to our budget and tax system, looks at options for strengthening our budget reserve funds.  Our first post recommended enhanced and expanded budget forecasting; subsequent pieces will consider multi-year revenue commitments and tax expenditures. Together, our proposals are designed to improve the Legislature’s ability to manage budget downturns.

Like most every state, Oklahoma has established a budget reserve fund to put money aside during times of robust growth that is then made available to cushion the impact of economic downturns.  Oklahoma’s Constitutional Reserve Fund, known as the Rainy Day Fund (RDF), was created by a vote of the people in 1985. Under the Constitution, deposits are made into the Rainy Day Fund of all General Revenue (GR) collections that exceed 100 percent of the final certified estimate made by the State Board of Equalization for a given year. Deposits are capped at 10 percent of the General Revenue Fund certification for the preceding year.  If the RDF is already at its cap, additional surpluses spill over to the General Revenue Fund. Read the rest of this entry »