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Oklahoma entering budget crisis with easy savings already squeezed out (Capitol Updates)

by | January 29th, 2016 | 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. You can sign up on his website to receive the Capitol Updates newsletter by email.

When he was working in the White House, Rahm Emanuel was quoted as saying you should never let a serious crisis go to waste. He went on to explain what he meant was that the crisis provides an opportunity to do things you think you could not do before. Emanuel was paraphrasing a similar statement by Winston Churchill who said “never let a good crisis go to waste.” I suspect in this session some legislators will take the advice to heart.

There will be a lot of ideas floated, some good, some not so good. The challenge is that, in a fiscal crisis like Oklahoma is facing, it’s easier to sell a bad idea on the justification that it saves money. It may have little or nothing to do with saving money or being more efficient.

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In The Know: New academic standards clear hurdles

by | January 29th, 2016 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Thanks to everyone who turned out to our 2016 State Budget Summit yesterday, and participated in the discussion with the #okbudget16 hashtag on Twitter! Yesterday’s presentations are linked here

Today In The News

New academic standards clear hurdles at state board of education, higher education regents: The Oklahoma State Board of Education on Thursday unanimously approved proposed new academic standards in English and mathematics. In a separate but simultaneous meeting, the Oklahoma State Regents for Higher Education certified the standards as adequate for preparing students for college and careers. State Superintendent Joy Hofmeister said she will next deliver them to a joint session of both houses of the Legislature in a presentation Monday morning [Tulsa World].

Oklahoma Resists Push for Enrollment in Affordable Care Act Coverage: A resolute band of insurance counselors, undeterred by the politics of health care in this staunchly conservative state, is increasing its efforts to find people who are uninsured and enroll them in coverage before the Affordable Care Act’s third annual open enrollment period ends on Sunday. But the push is facing Dust Bowl-force headwinds in one of the states most hostile to the health law – from some Oklahoma officials and residents who mistrust all things federal [The New York Times]. 

Oklahoma falls to 34th in nation for financial security: Nearly half (49 percent) of Oklahoma’s households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency, according to a new report from the Corporation for Enterprise Development (CFED). The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies can do much more to improve the financial security of Oklahomans [OK Policy].

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The program known as ‘welfare’ barely exists in Oklahoma

by | January 28th, 2016 | Posted in Blog, Poverty & Opportunity | Comments (2)

worried mother and baby

From its creation in 1934 to the mid-1990s, the Assistance to Families with Dependent Children (AFDC) program was a major component of America’s safety net, providing cash assistance to low-income families with children. In 1996, President Bill Clinton and a Republican-controlled Congress approved reforms to “end welfare as we know it.” AFDC became Temporary Assistance for Needy Families (TANF), with much stricter limits on who can receive aid and for how long and much greater leeway for state officials to use federal funds for welfare as they see fit.

Prior to the 1996 welfare reforms, AFDC was an entitlement like Social Security, Medicare, and Medicaid. That means any qualifying family who applied could receive benefits, and spending on the program went up and down based on need. Under the new TANF rules, recipients must satisfy a work or training requirement, and they can lose benefits for not meeting these requirements. TANF benefits to families also have a strict time limit — recipients may receive benefits for a maximum of five years over their lifetime, unless they meet limited criteria for a hardship extension.

Another major change with welfare reform is that TANF funds are now provided as block grants to states. Instead of going up and down based on need, the total amount of the basic TANF block grant has remained at $16.5 billion per year since 1996. Due to inflation, its real value has fallen by one-third since that year.

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Oklahoma falls to 34th in nation for financial security

by | January 27th, 2016 | Posted in Blog, Financial Security | Comments (3)

Nearly half (49 percent) of Oklahoma’s households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency, according to a new report from the Corporation for Enterprise Development (CFED). The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies can do much more to improve the financial security of Oklahomans.

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 61 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. It also ranks the states on 69 policies that promote financial security.

Oklahoma’s 34th‐place outcome ranking dropped three positions from last year’s 31st‐place ranking.  The relative bright spots were in the areas of Businesses & Jobs and Housing & Homeownership, where the state received “B” grades. Oklahoma received “D” grades in both Health Care and Education, driven by one of the highest uninsured rates in the country (17.8%) and the high percentage of youth who are neither enrolled in school nor employed (15.4%). The state also received a “D” in the area of Financial Assets & Income, a reflection of the state’s high level of income poverty (15.9%) and low rates of access to prime credit or revolving credit (ranked 44th and 48th in the nation, respectively).

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In The Know: Oklahoma health commissioner proposes cigarette tax increase

by | January 27th, 2016 | Posted in In The Know | Comments (0)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

Oklahoma health commissioner proposes $1.50 cigarette tax increase: Oklahoma Health Commissioner Terry Cline said Tuesday he wants to raise the state’s cigarette tax by $1.50 per pack to pay for teachers and expand the Insure Oklahoma program for low-income workers. The proposed increase is being carried by state Rep. Doug Cox, R-Grove, as House Joint Resolution 1058, a legislative referendum that would take a vote of the people to enact. Cline said the tax increase would generate $182 million a year while driving down cigarette consumption by about 10 percent [Tulsa World].

OU board to consider $20 million in budget cuts: Oklahoma public colleges and universities are cutting their budgets in response to this fiscal year’s revenue shortfall and a projected $1 billion deficit for next fiscal year. The OU budget reduction plan includes a voluntary retirement incentive expected to yield $10 million in annual savings. Another $10 million in savings would come from the elimination of vacant faculty and staff positions and by reductions in purchasing and travel [NewsOK].

Sand Springs Public Schools administrators discuss ‘Menu of Misery’ from budget cuts and how to mitigate it: A crowd filled the Charles Page High School cafeteria Thursday evening to discuss how the inevitable budget cuts will affect the district in the wake of a $46.7 million funding cut to public education statewide as a result of the state revenue failure for fiscal year 2016. Sand Springs Assistant Superintendent Rob Miller said the reduced funding to public education amounts to $350,000 in cuts to Sand Springs schools so far [Tulsa World].

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Balanced solutions to Oklahoma’s budget emergency

Download our 1-page Budget Options Fact Sheetrevenue_on_the_table

Oklahoma is facing a full-fledged budget emergency. This year’s budget is nearly $900 million, or 11.4 percent, below that of fiscal year 2009 when adjusted for inflation. A mid-year revenue failure was declared in December due to revenue collections coming in below projections, forcing most agencies to implement deeper cuts, and a second round of mid-year cuts could be necessary. Legislators are currently expected to have $901 million less for next year’s budget than this year – and the shortfall could grow even greater when new revenue estimates are released in February.

In recent years, policymakers have relied on budget cuts and one-time revenue fixes to cobble together the annual budget. Critical state services have already been cut deeply and repeatedly, leading to severe teacher shortages, larger class sizes, higher tuition charges and user fees, understaffed facilities, reduced payments for health care and social service providers, long waiting lists for services, and other harmful effects. The dependence on one-time revenues has created a chronic budget hole that we can’t fill even when tax collections improve.

If we try to solve our budget crisis only by doubling down on budget cuts and one-time revenues, we will only inflict greater damage to our economy and to the well-being of Oklahomans. Instead, we can and must solve this crisis through a more balanced approach that includes new recurring revenues.

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In The Know: State budget could be smaller than 10 years ago

by | January 26th, 2016 | Posted in In The Know | Comments (1)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

Decade drop: State budget could be smaller than 10 years ago: State budget writers might have less cash to spend than they did a decade ago, the Senate’s top lawmaker said Wednesday. Senate President Pro Tem Brian Bingman told a Greater Oklahoma City Chamber legislative breakfast that dismal sales tax revenues in December and the falling price of oil are a hint that the Legislature could end up working with just $5.8 billion in spending authority. When lawmakers convene for the 2016 session in February, the governor’s office will present a budget based on a $6.06 billion estimate certified last month [Journal Record]. The state faces a mid-year revenue failure, and tax cuts now reduce revenues by over $1 billion each year.

The Kansas tax cut experiment has a close cousin in Oklahoma: Our northern neighbor’s economic and budget problems have been well publicized by national media. Governor Brownback’s high-flying claims followed by an equally dramatic crash no doubt helped to attract attention to his state. Oklahoma’s budget problems have not received as much attention nationally, but over the past decade, we’ve conducted an experiment in tax cuts and budget shortfalls that goes even deeper than Kansas [OK Policy].

‘Epidemic Ignored’: Oklahoma treats its mental health system without care: In present-day Oklahoma, a fractured, arguably underfunded mental health system is suffocating. But in a state that hasn’t made a sustained, significant investment in its mental health system, the majority of low-income, uninsured Oklahomans with mental illnesses and substance abuse disorders who need help do not get it [NewsOK].

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The Kansas tax cut experiment has a close cousin in Oklahoma

by | January 25th, 2016 | Posted in Taxes | Comments (1)

On January 28th, OK Policy’s annual State Budget Summit will include a keynote presentation on “The Failed Kansas Experiment.” In 2012, Kansas enacted major income tax cuts and totally eliminated the personal income tax for owners of certain businesses. Kansas Governor Sam Brownback boasted that these tax cuts would be “a shot of adrenaline into the heart of the Kansas economy,” creating tens of thousands of new jobs. The jobs didn’t materialize, and Kansas is making deep cuts to schools, highways, children’s health care, and many other services even while hiking the sales tax and several other taxes to cover a gaping budget hole.

Our northern neighbor’s economic and budget problems have been well publicized by national media. Governor Brownback’s high-flying claims followed by an equally dramatic crash no doubt helped to attract attention to his state. Oklahoma’s budget problems have not received as much attention nationally, but over the past decade, we’ve conducted an experiment in tax cuts and budget shortfalls that goes even deeper than Kansas.

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In The Know: Support grows for one penny sales tax increase

by | January 25th, 2016 | Posted in In The Know | Comments (1)

In The KnowIn The Know is your daily briefing on Oklahoma policy-related news. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. Click here to subscribe to In The Know and see past editions.

Today In The News

Support grows for one penny sales tax increase: An exclusive News 9/News On 6 poll shows growing support for a one penny sales tax increase that would fund education in Oklahoma. We asked more than 1,000 likely voters if they support or oppose a new one-cent sales tax, with the money going to fund teacher pay and other education expenses. Sixty-four percent say they would support the tax, up 7 points since November. Twenty-nine percent oppose the tax and seven percent have no opinion [News9]. Read our statement on the sales tax proposal here

​Oklahoma becomes ‘an intake state’ for disposal wells​: ​Wastewater produced by oil and gas exploration in other states may not be injected back into its land of origin but shipped out of state to areas like Oklahoma, state officials said. Oklahoma receives wastewater from Texas, Kansas, New Mexico, Colorado and Arkansas, according to Oklahoma Corporation Commission reports [Enid News]. Arkansas successfully stopped its earthquake swarm by creating a moratorium area around the earthquakes where no new disposal wells could go in, and where all those that had been operating were shut down [News9].

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The Weekly Wonk: Access to child care, the link between health and inequality, and more…

by | January 24th, 2016 | Posted in Weekly Wonk | Comments (0)

the_weekly_wonk_logoWhat’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.

This Week from OK Policy

This week on the OK Policy Blog, Research Fellow Candace Smith argued that Oklahoma needs to reduce inequality to achieve better health. Inequality in Oklahoma is at an all-time high. A post in our Neglected Oklahoma series compared the public school experiences of two Oklahoma City children who live just a mile apart. Policy Analyst Carly Putnam found that child care is getting less accessible for working parents. 

In his Capitol Update, Steve Lewis wondered about the future of juvenile justice improvements following the resignation of the office’s director. Executive Director David Blatt wrote in his Journal Record column that the state Supreme Court made the right decision in allowing an initiative petition aimed at increasing education funding to proceed. OK Policy’s statement on the proposed initiative is here. Our Budget Trends & Outlook fact sheet summarizes the budget situation in 14 bullet points and four charts. 

Upcoming Events

  • Tickets to our 2016 State Budget Summit have sold out, but we’ll be live-tweeting the event! Follow along on Twitter with the hashtag #okbudget16.
  • OK Policy, The Community Service Council, Metropolitan Human Services Commission in Tulsa, and Tulsa Community College will host State Treasurer Ken Miller on Friday, February 19, from 12pm to 1:30pm for “Up Close – Oklahoma’s Budget Crisis.” The event is free and lunch will be provided, but space is limited! Click here to register. For more information, contact Dan Arthrell (darthrell@csctulsa.org). 

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