[This post has been changed slightly from the original. An earlier version questioned SoonerPoll's reliability without providing evidence to back up that claim.]

As part of the agreement to raise the federal debt ceiling, Congress will vote on a Balanced Budget Amendment this fall. Every Republican Senator has endorsed it. So have many Oklahoma state legislators.

So what’s the problem with a Balanced Budget Amendment?

#1: The BBA endorsed by Senate Republicans is not really about balancing the budget.

In fact, this amendment would make it much harder if not impossible to balance the budget, because it would require any tax increases to have a two-thirds majority in both houses of Congress.

On top of that, it says total spending cannot exceed 18 percent of GDP. To understand how radical this is, we should realize that not a single year’s budget under the George W. Bush or Reagan administrations would be constitutional under this rule. Even Rep. Paul Ryan’s budget plan, which included cuts so unpopular that they were quickly abandoned by Republicans, would have spent too much under this amendment. Read the rest of this entry »

The state’s deep and prolonged budget crisis has taken a serious toll on public services in Oklahoma.  We have seen rate cuts to providers of community-based health services, elimination of violence prevention programs for at-risk youth, closures of facilities for persons with mental health and addiction problems, and layoffs of hundreds of teachers and public employees, to cite just a few examples (see our updated compilation of state and local cuts). Overall, as we laid out in our FY ’11 Budget Highlights fact sheet, state appropriations have been cut by almost $400 million, or 7.2 percent, compared to FY ’09, and more than half of all appropriated state agencies must absorb state funding cuts of at least 15 percent.

Yet the impact of the downturn would have been genuinely catastrophic had Congress not provided substantial fiscal relief to the states as part of last year’s stimulus bill.  Formally known as the American Recovery and Reinvestment Act,  the stimulus bill provided states money in two basic forms – a State Fiscal Stabilization Fund, intended primarily for common and post-secondary education, and enhanced federal matching funds for Medicaid. Over the past two years, the Legislature approved the use of $1.375 billion in stimulus funds, allocated as follows:

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One of the most important provisions of the stimulus bill passed by Congress last February was the assistance provided to beleaguered state budgets in the form of enhanced federal matching rates for Medicaid. Now, as Oklahoma and other states remained mired in a deep fiscal crisis, the prospects seem good for an extension of the enhanced federal Medicaid match for an additional six months. This is one of the few promising signs on the fiscal horizons, and good news for the hundreds of thousands of Oklahoma families that receive health insurance coverage through Medicaid. Read the rest of this entry »

This week we released the November issue of Numbers You Need (PDF), our monthly look at key data on the state’s economy  and budget. As we reported in the bulletin, one of the clearest signs of the depth and length of the economic downturn is that participation in the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, rose for the seventeenth consecutive month in August. The program provided benefits to 524,536 people in August, an all-time high, and an increase of 27.3 percent compared to March 2008. Read the rest of this entry »

Note: Occasionally we are re-running blog posts on topical subjects that you may have missed the first time around. Last week, the Tulsa World reported that DVIS (Domestic Violence Interventions Services) of Tulsa has been awarded a $426,335 grant from violence prevention funds that were part of the federal stimulus bill to assist clients with emergency needs. In June we ran this blog post about the important role of federal stimulus funds for domestic violence shelters facing increased demands for services from families in distress: Read the rest of this entry »

As the debate about the speed and impact of stimulus spending rages on, Good Jobs First is taking on the less glamorous but equally important task of assessing accountability in state spending of funds from the stimulus bill (more formally, the American Recovery and Reinvestment Act, or ARRA). They’ve launched the STAR (States for a Transparent and Accountable Recovery) Coalition, a national web site that assesses state efforts to inform citizens about ARRA spending.

Accountability is essential for any government program. Taxpayers cannot determine whether their resources are being used appropriately unless they can tell what is being spent, where it is spent, who is benefiting from the spending, and what is being accomplished. Congress and President Obama built unprecedented accountability tools into ARRA. If carried out faithfully, these tools will help us determine not just if the stimulus money is spent fast, but if it is spent right.

This week, STAR released a report that gave states two grades – one for a state’s main ARRA website and one for its reporting on transportation spending. Results are mixed.

Some state ARRA sites support the President’s promise that the $787 billion stimulus plan will be carried out with “an unprecedented level of transparency and accountability.” Other state sites are half-hearted efforts that provide residents little useful data on the largest federal stimulus since the New Deal.

Oklahoma comes out below average in STAR’s ratings. Oklahoma’s main site does a good job of centralizing program information and showing how funds are allocated in the state, but falls short in showing where money is being spent, which projects are being funded, and who is getting contracts. To this, we’d add that the site has an excellent compendium of news releases on the stimulus, but the site is  not always kept up to date.

The Oklahoma Department of Transportation (ODOT) site fares better in STAR’s rating, but still lags behind other states. It provides detail on individual projects and contracts, but offers no summary information on how much is being spent in a county, with a single contractor, or even how much is for new roads vs. resurfacing.

Also this week, OK Policy released its  second Stimulus Update, which evaluates over $700 million in ARRA infrastructure funding in Oklahoma. Nearly $400 million in Oklahoma Department of Transportation (ODOT)  projects, mainly resurfacing of state highways, are under contract and spending has topped $40 million. Federal, state, local, and tribal governments will be replacing buses, rehabilitating airport runways and dams and flood control structures, and expanding water and waste water systems. Infrastructure programs, which make up eight percent of all ARRA spending, can help Oklahoma’s economic recovery and pave the way for economic growth and lower costs in the future. With improvements in our accountability efforts, we’ll be able to tell when and where projects are being funded, who is building them, and what they are accomplishing.

Our stimulus page includes the previous Stimulus Update, as well as our earlier stimulus issue brief and fact sheet and links to valuable ARRA resources.

Just a day after Governor Brad Henry signed the state budget for FY ’10, Oklahoma Policy Institute released its annual budget review. And the new fiscal year, which starts July 1, promises to be an interesting one:

all agencies face a tight and difficult year ahead as they wrestle with increases in mandatory operating expenses and, for some, rising caseloads in a downturn, with flat or reduced funding.

This year, the adoption of the budget is just the start of a process that will unfold over the next 13 months. Agencies must allocate appropriated  and other funds to their programs, figure out how they’ll cover all these built-in cost increases, adjust service levels and, in all probability, adjust again later in the year. We won’t know until next June or later how it all worked out.

But it does start at the beginning, and that’s where our budget review helps. It is the first comprehensive look at the budget process and the outcomes it led to. Here’s what you’ll find inside:

1. Analysis of the speedy drop in available state revenue.
2. Details of how federal stimulus money and state revenue changes allowed the overall budget to grow slightly.
3. A rundown of how individual agencies fared and what that says about state priorities.
4. Further analysis of problems to watch for as the year unfolds.
5. A look ahead to the FY ’11 budget and beyond.
6. Recommendations to improve budgeting processes and to increase funding of state services in the economic recovery.

Once you’ve read the budget brief, you’ll be caught up with us and ready to see the rest of the budget picture develop.

Federal stimulus money has been in the news nationally and in Oklahoma. It has expanded or stabilized a wide range of public services. The recently-completed state budget for FY’10 used $641 million of stimulus funding to make up for over $600 million in lost state revenue. The stimulus, though, is just part of a significant federal contribution to state and local government services in Oklahoma. In 2007, we received $5.5 billion in total grants.

What does all this federal money do? Our upcoming Online Guide to Oklahoma Budget and Taxes has some answers. The guide is unique among the available sources of information on government finance in Oklahoma. It is broader than any other source, covering both state and local government and describing all sources of revenue and spending, not just taxes and appropriations. Here’s an extract that provides an overview of federal funding and what it helps us accomplish.

Read the rest of this entry »

It is clear that the $7.2 billion FY ’10 budget agreement reached by legislative leaders and the Governor will lead to a tough and painful year ahead as agencies struggle to address increased costs and growing caseloads on flat or reduced funding. However, there is no question that the state would be looking at a full-scale catastrophe if not for the availability of the federal stimulus dollars that were part of the $787 billion American Recovery and Reinvestment Act (ARRA) passed by Congress in February. As was reported when the budget agreement was announced, next year’s state budget is expected to include some $641 million of ARRA dollars. As we’ve been tracking the General Appropriations bill (SB 216) and agency budget bills making their way through the process over the final week of session, a number of important details about the use of stimulus funds in the FY ’10 budget are now coming to light.

As we discussed in our issue brief on the stimulus package, ARRA included two funding streams intended to help support state budgets battered by the economic downturn:

1. The State Fiscal Stabilization Fund (SFSF), which is divided into two components: 81.8 percent is earmarked exclusively for education, while 18.2 percent is general purpose funding that can be used for “other high priority needs such as public safety and other critical services, which may include education”. Oklahoma was allocated $472.8 in education stabilization funds and $105.2 million in general purpose funds; and

• Enhanced federal Medicaid matching funds (enhanced FMAP).  The amount of enhanced FMAP funding is dependent on both a state’s unemployment rate and the amount of a state’s Medicaid expenditures over the 27-month period, which began back in October 2008 and extends through December 2010, when the enhanced FMAP is in effect.  One recent estimate, from the Federal Funds Information for the States, estimates that Oklahoma will draw some $950 million in additional federal Medicaid funds, but legislative staff projects that the total will be closer to $800 million.

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Sunday’s Tulsa World reports that one of many important decisions left to the last week of the legislative session is whether to modernize Oklahoma’s unemployment insurance (UI) system to qualify for $75 million in additional federal stimulus money. According to Governor Brad Henry’s spokesman Paul Sund,

There is no downside to accepting the dollars. If we reject them, there is the risk that Oklahoma businesses may ultimately be asked to pick up the tab if or when unemployment funds run short.

In April, we released an issue brief that points out that Oklahoma needs to make minor changes to qualify for the funding:

1. Make the “alternative base period” (the period for which earnings are counted to determine unemployment compensation) permanent. Oklahoma adopted an alternative base period in 2002 but it is suspended when the balance of the unemployment trust fund falls. This is a fiscally sound requirement, but it also can cut unemployment benefits when they are needed most.
2. Expand the definition of “compelling family circumstances” that allow a worker to collect unemployment when leaving a job voluntarily. The new circumstances–domestic violence, transfer of a spouse,  and illness of the worker or family member–help make the UI system better fit today’s families.
3. Cover workers seeking part-time jobs if their previous work experience is part-time.

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In spite of all the attention paid in Oklahoma in recent weeks to such urgent matters as the Ten Commandments, stem cells, and the Flaming Lips, the real work of the 2009 legislative session has been unfolding largely behind the scenes as key legislative leaders from the House and Senate try to hammer out an agreement on the budget for the upcoming year, FY ’10. From conversations I had last week at the Capitol  with a number of  legislators, fiscal staff, lobbyists, and agency personnel, it appears that the main outlines of the budget have been decided, although some key issues and details remain to be determined.

For those who have not been following closely, the main parameters for the budget were set in February, when the Board of Equalization certified available appropriations for FY ’10 at $644 million less than the budget for the current year. When adjustments were made for one-time money in this year’s budget and other issues, the shortfall approached $900 million. Although the state has built up the Rainy Day Fund to just under $600 million, of which up to $375 million could be made available for FY ’10, Governor Henry and legislative leaders have consistently expressed their unwillingness to tap into reserves to mitigate the shortfall. Also in February, Congress passed the $787 billion stimulus package (the American Recovery and Reinvestment Act, or ARRA), which included funding expressly intended to help states plug budget shortfalls over the next two years. State fiscal relief primarily assumed the form of a State Fiscal Stabilization Fund ($578 for Oklahoma, of which $473 million can be used only for education and $105 million available as general purpose funds) and enhanced federal Medicaid funding ($800 – $950 million for Oklahoma, available back to October 2008).

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A recent piece in the Tulsa World by staff writer Michael Overall presented a moving look at the efforts of Tulsa’s two domestic violence shelters, Day Spring and Domestic Violence Intervention Services (DVIS), to cope with rising demands for services. Like many others in the social services sector, Day Spring and DVIS are facing the real, day-to-day effects of the declining economy. As  job losses mount and financial uncertainty builds, the impact is being felt in growing levels of household stress. This can have explosive and violent consequences. The article focuses on Grace, a thirty-something, college-educated woman “wearing trendy high heels and a business blazer” who has been at Day Springs since late March.

“I knew it was putting a lot of stress on him, a lot of pressure,” says Grace. “The pressure turned into anger, and the anger turned into…” Her voice trails off without finishing the sentence, but shelter personnel confirm that she suffered physical and psychological abuse.

Both Tulsa shelters are struggling with “an unprecedented surge” of women seeking services that began in January and is showing no signs of abating. The shelters are operating at full capacity; Overall notes that “(w)ith a record number of women coming to the shelter — and with most of them staying longer — the overcrowding seems likely to get worse.”

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