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It’s the revenue, stupid! (Guest post: Ken Miller)

by | May 6th, 2016 | Posted in Budget | Comments (10)

State Treasurer Ken Miller

State Treasurer Ken Miller

Ken Miller, PhD, is the Oklahoma State Treasurer and an economics professor at Oklahoma Christian University.  This post originally appeared as an article in the April 2016 Oklahoma Economic Report and is reprinted with permission.

This month’s Gross Receipts to the Treasury are the lowest April total in four years and mark a 12th consecutive month of falling collections. On an annualized basis, Gross Receipts to the Treasury are the lowest since June 2013 and all major revenue streams are smaller than one year ago.

The direct and indirect effects of contraction in our state’s anchor industry are, of course, driving these numbers. Monthly collections from oil and natural gas production taxes have been lower than the same month of the prior year for 16 consecutive months, including gross production collections of less than $21 million in April – the lowest monthly total in more than a decade.

Even so, some politicians are reticent to admit by word or deed the state has a revenue problem, instead defaulting to inaction and the tried and true spending problem rhetoric. For those who conveniently posture that our current crisis is rooted in spending, I have breaking news: It’s the revenue, stupid!

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In The Know: Education Cuts Prompt Revolt, Despair in Oklahoma

by | May 6th, 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

Education Cuts Prompt Revolt, Despair in Oklahoma: Oklahoma is accustomed to being at the back of the class in funding for public education: It ranks 48th among the 50 states plus the District of Columbia in teacher pay and 49th in spending per student. But even many long-suffering Oklahoma educators and parents are revolting over the latest round of proposed cuts amid the state’s worst-ever budget crisis [ABC News]. Oklahoma continues to lead the nation for the largest cuts to general school funding since the start of the recession [OK Policy].

Oklahoma House, Senate committees pass budget legislation: Oklahoma lawmakers on Thursday began the daunting task of addressing a projected $1.3 billion hole in the next state budget, backing legislation that would raise or save roughly $200 million but knowing more difficult haggling lies ahead. Members of House and Senate appropriations committees adopted a series of joint budget bills that would increase revenue, including an attempt to capture about $125 million from a cash-flow reserve fund, and trim tax credits, including limiting a credit for clean-burning motor fuel equipment [NewsOK].

Everyday folks call, email and visiting lawmakers before end of legislative session: Andy Moore was fed up with dreary headlines about the state’s financial mess. Articles covering the revenue shortfall and its impact on state agencies and school districts that are now facing massive budget cuts frustrated the Oklahoma City resident and father of two young children. Like many, Moore logged on to Facebook to share his irritation with friends and family members; however, that action didn’t prompt any change. About a month ago, Moore jokingly suggested to friends they take a day off work to visit the state Capitol to talk with lawmakers about the $1.3 billion budget hole and funding issues regarding core government services [Oklahoma Gazette].

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Even amid energy bust, Oklahoma’s oil and gas tax breaks exceed $400 million per year

by | May 5th, 2016 | Posted in Blog, Taxes | Comments (2)

Oklahoma continues to give up well over $400 million per year in tax breaks to oil and gas producers, even as oil prices fall and the industry sheds thousands of jobs, according to data compiled from the Oklahoma Tax Commission.

Last year (FY 2015), the state lost $473.0 million in revenue from taxing horizontal production at 1 percent and deep wells at 4 percent rather than the standard tax rate of 7 percent, based on OTC data. Over half of all production (54 percent) was taxed at 1 percent. The state collected just $542 million in gross production taxes off of total production valued at $14.5 billion, an effective tax rate of 3.7 percent.

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In The Know: Gov. Fallin endorses Trump’s presidential bid, welcomes VP talk

by | May 5th, 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

Fallin endorses Trump’s presidential bid, welcomes VP talk: Oklahoma Gov. Mary Fallin is offering her enthusiastic endorsement of Republican presidential contender Donald Trump, saying she supports the New York billionaire “100 percent.” Fallin also said Wednesday she’s honored to be mentioned as a possible vice presidential candidate and would be happy to consider such an offer [NewsOK].

Oklahoma Medicaid Agency Ending Planned Parenthood Contracts: Oklahoma is ending its contracts with two Planned Parenthood organizations that provide health services to thousands of mostly low-income women and families, the head of the state’s Medicaid agency said Wednesday. Oklahoma Health Care Authority Chief Executive Officer Nico Gomez said the agency notified Planned Parenthood of Central Oklahoma and Planned Parenthood of Arkansas and Eastern Oklahoma in February of its intent to terminate provider agreements with the two affiliates [ABC News].

When teachers stopped screaming: Quite a day, then, April 13, when Oklahoma Public School social studies and English and biology and gym teachers, tired of state legislators using their profession as a chew toy, decided to do something about it. It shouldn’t have come to this. As Charles P. Pierce of Esquire said, “Sometimes it’s enough to yell at the right building.” This is what happens when it’s not [Tulsa Voice]. Oklahoma continues to lead the nation for the largest cuts to general school funding since the start of the recession [OK Policy].

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Upcoming Event: Free public lecture discusses infant and toddler welfare

On Tuesday, May 10, from noon to 1pm, a free public presentation sponsored by the Oklahoma Department of Human Services Office of Planning, Research and Statistics and the University of Oklahoma Center for Public Management will examine the child welfare system. The event, titled “Making the Invisible Visible: The Real Cost of Child Welfare for Infants and Toddlers in Oklahoma,” will be held at the Oklahoma History Center (800 Nazih Zuhdi Drive, Oklahoma City, OK 73105).

This session will examine the real cost of child welfare—both for families and our society as a whole—when the early mental health needs of infants and toddlers are not considered and prioritized from a promotion-prevention lens. Challenges and gaps within the child welfare system will be addressed as well as strategies to mitigate these challenges across the early childhood system of care. The lecture is free and open to the public. Click here to register.

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In The Know: Oklahoma Supreme Court invalidates retail liquor proposal

by | May 4th, 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

Oklahoma Supreme Court invalidates retail liquor proposal: The Oklahoma Supreme Court has invalidated an initiative petition that calls for a statewide vote on whether to allow wine to be sold in grocery stores. The Supreme Court handed down the ruling Tuesday and ordered the petition stricken from the November general election ballot. The petition, filed by the Retail Liquor Association of Oklahoma, was challenged by the Oklahoma Grocers Association, which alleged it unconstitutionally delegates legislative authority and is insufficient and misleading [Associated Press].

Oklahoma Legislature Attempts to Cap At-Risk Energy Tax Credit with Newly Filed Senate Bill 1577: A new bill filed Monday with the Oklahoma Legislature would limit claims for economically at-risk oil and gas leases to 2014 production and prohibit rebates after the end of the year. Senate Bill 1577 was filed by Senate President Pro Tempore Brian Bingman, R-Sapulpa, and House Speaker Jeff Hickman, R-Fairview. The bill limits the gross production tax exemption for economically at-risk oil and natural gas leases to production for calendar year 2014 and provides no refunds will be paid on or after December 31, 2016 [OK Energy Today].

Oklahoma nursing home residents, health workers rally at Capitol for Medicaid: Hundreds of health care workers, nursing home residents and other Medicaid recipients are rallying at the state Capitol in support of a plan to draw down hundreds of millions of federal dollars offered to states for Medicaid expansion. About 300 people rallied Tuesday on the south steps of the Capitol and then flooded into the building to ask their legislators to back a proposal for a $1.50-per-pack tax increase on cigarettes to pay for the “Medicaid Rebalancing Act of 2020” [Associated Press]. The rally highlighted the human cost of cutting SoonerCare [NonDoc]. Here’s what we know about Oklahoma’s plan to extend health coverage [OK Policy].

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Cuts to Indigent Defense System have left our justice system deeply unbalanced

by | May 3rd, 2016 | Posted in Budget, Criminal Justice | Comments (2)

InjusticeAdd this to the list of potential fallout from the state’s unprecedented budget disaster: Oklahoma may soon be forced to release people accused of violent crimes because the state can’t afford to pay for their legal representation.

This nearly came to pass in 2002 when a District Court judge ordered that the director of the Oklahoma Indigent Defense System (OIDS) be held in contempt of court because the agency had not provided a lawyer for several defendants charged with serious crimes. The Oklahoma Court of Criminal Appeals ruled that the defendants had to be released if they were held any longer without counsel; this was only avoided when funds from the court were shifted to provide the attorneys required by the Constitution. Fourteen years later, as caseloads assigned to the OIDS grow and funding remains inadequate, the state may soon face another crisis as it is unable to fulfill its duty to ensure the right to an attorney.

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In The Know: House Republicans elect Atoka banker Charles McCall as speaker designate

by | May 3rd, 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

House Republicans elect Atoka banker Charles McCall as speaker designate: House Republicans on Monday elected Rep. Charles McCall as speaker designate. He defeated House Appropriations and Budget Chairman Earl Sears, R-Bartlesville. House Speaker Jeff Hickman, R-Fairview, is serving his final term in office. McCall, 46, is a banker from Atoka. He and his wife, Stephanie, have two sons. He is a former Atoka city councilor and mayor [Tulsa World].

Questions remain regarding proposed Medicaid reform plan in Oklahoma despite widespread support: Nico Gomez stood before a small group of 25 concerned residents. How will we save Oklahoma’s Medicaid program? That’s the question at hand. Gomez, Oklahoma Health Care Authority CEO, has his answer: the Medicaid Rebalancing Act of 2020. Under Gomez’s proposal, 354,000 Oklahoma men, women and children would receive private health insurance over a four-year period [NewsOK]. Here’s what we know about Oklahoma’s plan to extend health coverage [OK Policy].

Budget, Medicaid Likely To Dominate Closing Weeks Of Oklahoma Legislature: It’s now the final month of the legislative session, and lawmakers have less than four weeks to pull off a budget deal to close a $1.3 billion shortfall for the fiscal year that begins July 1. Will they get it done? “Yes,” said state Sen. Mike Schulz, R-Altus, told reporters Thursday. “I want to go home.” Oklahoma’s constitution requires the legislature to adjourn on the final Friday in May. Lawmakers have discussed wrapping up their work a week early, which they’ve done every year since 2012 [KGOU].

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No soldier left behind? How budget cuts impact veterans

by | May 2nd, 2016 | Posted in Budget | Comments (3)

Cody Minyard is an OK Policy intern and a political science senior at the University of Oklahoma. He is a citizen of the Muscogee (Creek) Nation.

During this legislative session, the projected deficit has reached $1.3 billion. Without solutions that bring in substantial new revenue to ease budget woes, we are facing deep cuts to schools and state agencies. Many Oklahomans are bearing the brunt of this budget crisis, but one specific group we should be concerned about are Oklahoma’s veterans. Large numbers of veterans face the possibility of seeing their benefits drastically reduced by state budget cuts.

The Oklahoma Department of Veteran Affairs has a budget of approximately $140 million, $35 million of which comes from state appropriations. The Department’s funding from the state had already been cut 13 percent compared to 2009 levels, and Oklahoma’s mid-year revenue failures brought an additional 7 percent reduction. Deputy Director Douglas Elliott said the cuts meant they would have to provide less training for nurses and nurses assistants, as well as delay structural repairs and upgrades to Oklahoma’s Veterans Affairs facilities. Elliott also said further cuts could force them to lay off as many as 240 workers.

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In The Know: Some budget bills may finally surface amid Oklahoma’s record funding shortfall

by | May 2nd, 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

Some budget bills may finally surface amid Oklahoma’s record funding shortfall: The first budget bills may get a vote in the House in about a week as lawmakers finally begin to deal with what has been the elephant in the room all legislative session — a record $1.3 billion revenue hole. House Appropriations and Budget Committee Chairman Earl Sears said the governor’s office along with Republican leadership in both chambers agree on some legislative approaches that will take the form of bills likely to be heard the second week in May [NewsOK]. The agreement could threaten broad-based tax credits for hundreds of thousands of low- and middle-income working families [OK Policy].

The Oklahoma State Budget Explained by Puppets: Quite possibly, the one thing everyone can agree on, regardless of political belief, is the thought of a working budget. After analysts pointed heavily at the oil bust, Oklahoma isn’t doing so OK these days. $1.3Billion in the hole, firing teachers, threatening senior and child medical care… You could say these folks are tired of a budget that doesn’t work. Enter Together Oklahoma [z94 The Rock Station]. See the puppet videos and the #DoSomethingOK Campaign for a Better Budget here.

Schools, students expect tuition hikes: Students can expect to pay more next fall to attend Oklahoma’s 25 public colleges and universities following $112 million in cuts to higher education this fiscal year and expected future cuts. The colleges and universities will submit their requests for increases in tuition and mandatory fees in June, after the Legislature approves the 2016-17 state budget. Johnson said higher education likely will get a smaller piece of the pie. Don Betz, president of the University of Central Oklahoma, said Thursday tuition increases for the next school year depend on that number. [NewsOK]

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