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Child abuse prevention and at-home care for seniors are latest services at risk due to shrinking state government (Capitol Update)

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.

Even with the legislature adjourned, there seems to be no dearth of activity emanating from Oklahoma City. The State Supreme Court has set oral arguments on the constitutional challenge to the cigarette “fee” for August 8, to be heard by the entire court. I haven’t seen the pleadings in the case, but oral arguments are usually among the last things to happen before an appellate court makes its decision. This must mean the Court decided to assume original jurisdiction and rule on the case quickly. Given the importance of the funding to the recently-passed budget and the havoc that would be created if the fee were implemented, then held unconstitutional, it’s a good thing to get the ruling before the fee is set to go into effect on August 25th.

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Highs and lows of Oklahoma’s 2017 legislative session (Part 1)

by | June 12th, 2017 | Posted in Budget, Education, Taxes | Comments (0)

At the start of session, OK Policy laid out our top priorities in the areas of budget and taxes, health care, education, criminal justice and economic opportunity. As the session developed, we achieved some victories with good bills and helped stop even more harmful bills from becoming law. And there were plenty of disappointments in the form of promising legislation that died along the way.

Here are our staff’s recaps of the major highs and lows of the 2017 session in the issue areas where we were most deeply engaged. In part one, we share recaps of what happened with budget, tax, and education polices. In part two, we discuss what happened with health care, criminal justice, and economic opportunity policies.

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What supporters of SQ 640 didn’t foresee (Capitol Update)

by | June 9th, 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.

blindfolded man in danger of walking off cliff

This is the first year that SQ 640 has come into play. In 1992, SQ 640 put the requirement in the state constitution that compels a three-fourths majority vote in the House and Senate to enact revenue bills. For most of the years since 1992 the measure served to kill any talk of revenue raising by the Legislature. Legislators were content to avoid the bitter pill of voting on tax increases by adhering to the consensus that a three-fourths majority is just too high a hurdle. The prevailing view held that the Legislature “can’t” raise taxes.

The problem is that legislators can cut taxes, usually a popular vote, with a simple majority. And in good times they take the opportunity to do that. You can think of quite a few political careers that have been built on cutting taxes, few if any that were built on raising taxes. But now, in the face of repeated budget shortfalls and revenue failures, the need for more revenue in Oklahoma has been acknowledged by all but a small faction in the Legislature.

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Next year’s budget starts over $400 million in the hole

by | June 6th, 2017 | Posted in Budget | Comments (0)

“hole” by Jon Rawlinson is licensed under CC BY 2.0

When Governor Mary Fallin delivered her State of the State address in February, she made a strong call for lawmakers to end the practice of balancing the state budget through the use of one-time revenues, saying:

Oklahoma will continue to struggle if we don’t fix the structural deficits of our budget… So, as our state’s top leaders, let’s focus on the REALITY of our state budget deficit. To start, for decades we have attempted to balance our budget for too long with the use of one-time resources. We cannot afford to pass another budget using a large amount of non-recurring revenue.

Governor Fallin proposed a budget that filled the hole and provided targeted funding increases without one-time revenues, but the bulk of her new recurring revenue relied on the expansion of the sales tax to nearly 150 additional services, which proved to be a total non-starter in the Legislature.

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State budget sitting on shaky constitutional foundations (Capitol Update)

by | June 2nd, 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.

Wow! I admit I never saw this coming. When the legislature returned for its last week of regular session, I thought members would quickly come to some sort of revenue and budget agreement to at least keep the state going, if not to fix our fiscal dilemma. I thought that because I know there are enough people of good will in the House and Senate, both Republicans and Democrats, who understand the situation and want to make things work. Apparently, they tried briefly on Monday to do that, and then the governor and legislative leadership decided to move on into troubled legal waters.

If you’re looking for a silver lining, the bright side of this is that, even in the face of a fiscal crisis, Republican legislative leaders decided not to proceed with alarming budget cuts to state agencies, most of whom — from education to corrections — are already unable to responsibly fulfill their duties to the public. But my fear, and prediction, is that the relief of the fiscal crisis is only temporary and will soon be replaced with both a fiscal and constitutional crisis. Legislative leaders, with the active collusion of the governor, decided to simply interpret away State Question 640. I don’t like SQ 640. I didn’t vote for it when it passed a vote of the people, and I regret that it passed. But, for the love of Life, it is now Article V Section 33 of the Oklahoma Constitution!

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Proposed budget leaves Oklahoma services massively underfunded

by | May 25th, 2017 | Posted in Budget | Comments (3)

Note: This post was updated May 28th to reflect current information. The General Appropriation bill passed the Legislature and is awaiting action from Gov. Fallin.

After months of wrangling and stalled negotiations, legislative leaders finally introduced budget bills late Tuesday evening, just three days before the deadline to adjourn legislative session. Separate House and Senate versions of the General Appropriations (GA) bill were rolled out; however, the Senate refused to consider the House version of the budget, leaving the Senate’s bill, SB 860, as the only budget moving forward.

This budget appropriates $6.863 billion for FY 2018 — almost the same amount as FY 2017 after mid-year cuts and supplemental appropriations. Compared to the FY 2009 budget of eight years ago, this budget is 3.3 percent less in nominal terms and more than 15 percent less when adjusted for inflation. After inflation, the appropriations budget has shrunk by about $1.25 billion compared to FY 2009.

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Statement: Lawmakers should vote down budget that breaks their promises

The Save Our State Coalition, including Oklahoma Policy Institute, released the following statement in response to the budget plan unveiled by House and Senate leaders late last night:

The legislative session began with promises to fix Oklahoma’s structural deficit, fund a teacher pay raise, and stop the reckless use of one-time funds that make our budget problems worse in future years. The conclusion of the legislative session can only be seen as a failure to meet those promises.

The source of that failure is a decision to cater to a few powerful interests instead of investing in an economy that works for all. Lawmakers had sensible, broadly popular options to protect our communities, like restoring a moderate gross production tax and rolling back wasteful income tax cuts for the very wealthy. Instead of taking these options, they cobbled together a budget using legally questionable gimmicks and even more cuts that will be passed down to regular Oklahomans.

The results of this budget will be a continuing exodus of teachers from Oklahoma schools, larger class sizes and fewer educational opportunities, failing protections for public health and safety, and collapsing support for children, seniors, and Oklahomans with disabilities — in other words, more of the same, but worse.

Oklahomans want and deserve better. The bright spot coming out of this legislative session is that a record number of lawmakers and regular Oklahomans have grown aware of our state’s revenue problems and the decisions that are perpetuating them. Despite the attempt to rush through a budget with late-night, last-minute votes, more Oklahomans than ever are watching and getting involved.

Oklahomans deserve better, even at the cost of coming back into special session to do this right. Lawmakers should vote down this budget and come up with a responsible plan. If this budget does make it through the Legislature, Governor Fallin should uphold her promise to veto a budget that does not fund core services. Oklahomans are calling on lawmakers to come back with a plan that puts regular people over special interests.

Amid budget deadlock, a reminder of what’s at stake

At the state Capitol, lawmakers remain deadlocked over how to find enough revenue to avoid crippling budget scenarios. The main barrier appears to be legislative leadership’s refusal to allow a vote on removing huge tax breaks for oil and gas producers. On Wednesday night, oil and gas industry lobbyists preemptively held an end-of-session party for lawmakers, but without a budget deal the session may not end anytime soon.

Meanwhile, school districts left in the dark about what their budgets will look like next year have already begun to make cuts. Tulsa Public Schools approved a plan to close three schools and lay off 37 teachers; Oklahoma City is increasing class sizes and selling their administration building; Woodward is shutting down a summer program and cutting staff; Muskogee is ending a popular STEM program. These cuts are only the latest in what is approaching a decade of squeezed education funding — students in 1st grade when we started cutting funding are now high school freshmen. More than 200 schools across the state have already gone to a 4-day school week, and dozens of school districts are looking at or have already shortened their school year.

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Focus on “government spending” instead of real people is leading lawmakers astray

by | May 17th, 2017 | Posted in Budget, Taxes | Comments (0)

Right now most Oklahomans are worried about how our lawmakers will fill a huge budget shortfall following years of cuts that have contributed to teachers fleeing Oklahoma classrooms, left Oklahomans with severe disabilities and children in the child welfare system at risk of losing basic protections, and created an extremely dangerous environment in prisons for both inmates and staff, among other damaging effects. State agencies large and small report having overstretched staff with stagnant wages and low morale; inability to maintain buildings and equipment; and serious struggles to maintain quality services or perform their core mission. These cuts are rippling out to threaten entire communities, especially in areas of small town and rural Oklahoma where residents have fewer local resources to make up for disinvestment by the state.

Amid all of this turmoil, the Oklahoma Council of Public Affairs is working hard to convince lawmakers that our budget problems don’t exist. In a series they’re calling the “bogus budget”, they add up all of the spending by various state agencies and argue that if the total hasn’t plummeted, we don’t need to worry about their funding.

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Statement: Republican budget proposal ignores popular solutions

Oklahoma Policy Institute released the following statement in response to Republican leaders’ new budget proposal:

The proposal announced today by Republican leadership does not address the hundreds of millions Oklahoma is giving away each year to the oil and gas industry. Oklahoma’s effective tax rate on oil and gas drilling is less than half what it is in peer states. Phasing out the state’s generous tax break on drilling after 18 months instead of 36 months would bring in nothing to close next year’s budget shortfall. In future years, this proposal would continue the tax break during months when wells produce 35 to 45 percent of their total 10 year production.

Oklahoma can legally change a higher tax rate on oil and gas production in exactly the same way as Republicans are proposing higher taxes on cigarettes and motor fuels. As a recent memo by Oklahoma tax experts Jerry Johnson and Michael Clingman explained, “The gross production tax is a tax on production and the incidence of the tax occurs when the oil or gas is actually produced. It is appropriate to adjust the rate for future production.”

Restoring the historical tax rate of 7 percent would bring in as much as $313 million for next year’s budget. Restoring a 5 percent rate would bring in as much at $198 million.

A balanced approach to fixing our budget cannot only include revenue increases that fall most heavily on moderate- and low-income Oklahomans while leaving in place tax cuts that primarily benefit the wealthy. In addition to restoring the historical gross production tax, other measures like ending the capital gains exemption, limiting itemized deductions, and restoring the Earned Income Tax Credit need to be part of the mix.

Many of the options being ignored by Republican leadership have broad popular support. The latest proposal leaves these good options on the table for no legitimate reason. Lawmakers need to do better to develop a budget that puts Oklahomans first and saves our schools, public safety, health care, and other vital services from deeper cuts.

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