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New report brings lessons of Oklahoma history to modern budget challenges

by | April 25th, 2017 | Posted in Budget | Comments (0)

Oklahoma is a young state. In the 110 years since statehood — only about four generations of people — we’ve gone through good years and bad, through oil booms and busts, through the Dust Bowl and the long recovery. Many came here with nothing but hope for a better future, and they built the modern communities we live in today.

Our parents and grandparents accomplished all this because they knew that a thriving community doesn’t happen by itself. It takes all of us chipping in to pay for things like schools with good teachers, modern infrastructure, quality health care, and first responders looking out for our safety.

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We must end oil and gas tax breaks to save Oklahoma communities

by | April 24th, 2017 | Posted in Budget, Taxes | Comments (1)

Oklahoma is facing a genuine budget crisis. Our schools, care providers, correctional facilities, judicial system, and other critical functions have absorbed year after year of cuts and are losing the ability to fill their basic missions. The loss of these services threatens the viability of entire communities and the lives of vulnerable children, veterans, and seniors.

This year, we’re facing yet another budget shortfall of between $750 million and $1 billion, but we’ve exhausted many of the one-time revenue sources and budget gimmicks that barely got us through shortfalls in previous years.

To prevent catastrophic cuts and put our finances back on a sustainable course, lawmakers must raise new recurring revenues. Part of the solution needs to include ending tax breaks for the oil and gas industry and restoring the gross production tax to its historical level of 7 percent.

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There will be some revenue bills passed, but the question is how much? (Capitol Update)

by | April 21st, 2017 | Posted in Budget, Capitol Updates | Comments (0)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

The work of the standing committees is finished for this session. Bills now have one week to pass the floor of the opposite chamber to remain alive. At the same time, the appropriations and budget process is in full swing from now to the end of session. It’s complicated this year — as it has been for the past several years — because the budget cannot be balanced without revenue increases or unacceptable budget cuts. So, at this point, having taken no action on either, legislators have no idea how much money they are working with. How much revenue can be generated must be settled first before the budget picture can become clear.

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Fog has yet to clear on state budget (Capitol Updates)

by | April 14th, 2017 | Posted in Budget, Capitol Updates | Comments (0)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

Nine weeks down and seven weeks to go in this session, and the fog has yet to begin clearing on the FY-18 budget outlook. House appropriations Chair Leslie Osborn sent a shot over the bow recently when she asked agencies to report what they would do with a 14.5 percent budget cut. The results reported by most agencies were unacceptable by most any measure. But there still exists no public proposal by legislative leadership for a package of revenue measures that would come close to closing the budget gap.

It seems clear that a deal has been made to end the 10-year, fifty one-hundredths of one cent ($0.0050) tax credit earned on every kilowatt of electricity produced by wind facilities going into production after July 1, 2017. The credit is a refundable tax credit, which means it’s money that is paid directly out of the state treasury, and it has cost more than was ever anticipated. This, however will have no impact on the FY-18 budget so it will be no help in solving the budget gap. The budgets it will affect will occur in FY-19 and beyond.

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Arts and Culture: A public-private partnership that’s good for education, the economy, and Oklahoma’s future (Guest Post: Brenda Granger)

by | April 12th, 2017 | Posted in Budget, Economy, Education | Comments (0)

Brenda Granger is Executive Director of the Oklahoma Museums Association. Today is Oklahoma Arts Day at the State Capitol.

Arts and culture promote civility and transcend all boundaries. Arts and culture bring people together. Arts and culture are rooted in partnerships of all kinds, especially public-private partnerships. Arts and culture organizations offer transformational experiences to everyone across our great state and beyond. In these times of educational crisis and budget shortfalls, the Legislature should look to arts and culture as part of the solution. Funding for the Oklahoma Arts Council (OAC), and through them, arts and cultural organizations in our state, is important to our Oklahoma education, economy, communities, workforce, and future.

Not everyone realizes how important arts and culture are for Oklahoma’s education system and economy. In the next months, Oklahomans for the Arts, in partnership with Americans for the Arts, Oklahoma Arts Council, and several arts and cultural organizations, will have the latest economic impact numbers to share. It is expected the numbers will exceed those of the last study in 2010 of nonprofit arts and cultural organizations that showed that the industry had a $314.8 million impact on the state’s economy, supported 10,156 full-time equivalent jobs, and generated more than $29 million in state and local government revenues.

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Another shoe to drop on state finances? (Capitol Update)

by | April 7th, 2017 | Posted in Budget, Capitol Updates | Comments (2)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

I have a feeling there may be another shoe to drop when it comes to the state’s finances. Last week it came to light that the Office of Management and Enterprise Services (OMES) has been borrowing money from the Rainy Day Fund to pay the state’s monthly obligations. And they have done so to the point that the Rainy Day Fund is totally depleted. OMES is the finance office for state government through which the money flows, and it is under the direct control of the governor.

Those in charge at OMES say they had the authority to do this, and it’s all okay so long as the money gets put back by the end of the fiscal year. That’s because the money is supposed to be available to appropriate. 3/8ths of the money is should be available for appropriation in next year’s budget because next year’s certification of funds is less than this year’s. Another 3/8ths should be available for immediate appropriation if there is a revenue failure, not to exceed the amount of the revenue failure. And finally, the last 1/4th of the fund should be available if the governor and Legislature by 2/3rds vote to declare an emergency.

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Update: Rainy Day Fund 101

by | April 6th, 2017 | Posted in Blog, Budget | Comments (1)

Last week, news broke that the Office of Management and Enterprise Services (OMES) had borrowed money from the Rainy Day Fund to make budget allocations to state agencies. The fund had a beginning balance of some $243 million, and OMES apparently transferred the full amount.

It’s rare, if not unprecedented, for the state to borrow money from the Rainy Day Fund, but this year, revenues have fallen below projections and the funds that are typically borrowed from, including the Cash Flow Reserve Fund and Transportation funds, have already been emptied.

OMES Director Preston Doerflinger based the transfer on a section of state law (Title 62, Section 34.55) under which he “may transfer money from any treasury fund to the General Revenue Cash-flow Reserve Fund as required to satisfy monthly allocations…” According to Doerflinger, “Rainy Day money is housed in the state treasury, making it a treasury fund.” Doerflinger insists the money will be repaid before the end of the state fiscal year on June 30th. However, both House Speaker Charles McCall and House Minority Leader Scott Inman have questioned the legality of borrowing from the Rainy Day Fund, and Rep. Inman may request an Attorney General’s opinion on the subject.

With attention now focused on the Rainy Day Fund, it’s a good time to update our 2015 blog post that explains how money from the Fund can be used.

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DHS Director: Oklahoma budget cut scenarios range “from the terrible to the unthinkable”

OKDHS Director Ed Lake

Unless lawmakers find new revenues to close their budget shortfall, Oklahoma is looking at unprecedented cuts to the most basic services of state government, including those for the most vulnerable seniors, children, and people with disabilities. Even before next year’s budget, the Oklahoma Department of Human Services (OKDHS) will run out of money in May to pay for in-home care of 25,000 seniors and individuals with severe disabilities unless the Legislature acts quickly to provide supplemental funds.

Yesterday, OKDHS Director Ed Lake sent a message to all employees of the agency stating that further cuts would threaten the elimination of entire programs serving very vulnerable adults and children. The cuts could even undo the progress made under court order to improve our child welfare system. Here is Director Lake’s message in full:

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Legislature’s timid approach to a teacher raise doesn’t bode well for schools (Capitol Update)

by | March 17th, 2017 | Posted in Budget, Capitol Updates, Education | Comments (0)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

I watched the House floor debate on HB 1114 by Rep. Michael Rogers (R-Broken Arrow) raising the minimum salary schedule for Oklahoma teachers by $6,000 over the next 3 years. The raises would be $1000 next year followed by $2000 and $3000 respectively in the next two years. The bill contained no funding, but Rep. Rogers said funding would be considered by separate measures later in the session.

It was gratifying to listen to all the debaters-for and against-recognize both that teachers should be paid more money and that operational expenses for courses, textbooks, technology, and many other aspects of funding for schools also needs more money. Those who debated against the bill did not debate against the need for teacher raises but against passing a bill only for teacher raises and with no funding.

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For the first time, lawmakers were found guilty of supplanting lottery funds for schools

by | March 15th, 2017 | Posted in Budget, Education | Comments (5)

Along with all of their other budget challenges, lawmakers this session will need to allocate an additional $10.1 million for the Education Lottery Trust Fund as the result of a determination made last month that lottery funds had been used to supplant rather than enhance education funding this year.

Back in 2004, Oklahoma voters established the state lottery via two state questions. The first, SQ 705, created the Lottery Commission and specified how lottery funds would be allocated. The second, SQ 706, created the Oklahoma Lottery Education Trust Fund into which lottery funds are deposited and stated that this fund could be spent only on specified education-related purposes. To ensure that money raised through the lottery would be used to enhance education spending and not allow existing education dollars to be diverted elsewhere, SQ 706 included “supplantation” language. This language was added to the State Constitution as Article X, Section 41.D :

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