Archive for 2012

Why total spending has gone up as budgets are cut

by | June 11th, 2012 | Posted in Blog, Budget | Comments (2)

OK Policy has spent a lot of time focusing on the real and continuing damage caused by repeated state budget cuts over the past three years, as well as the fact that state tax collections are at historic lows. Meanwhile, the folks at the Oklahoma Council on Public Affairs have chosen to emphasize that total state expenditures continue to increase each year.

How can both be true? Here’s how:

continue reading Why total spending has gone up as budgets are cut

Still stuck in a hole: Funding for public education falls flat

by | June 6th, 2012 | Posted in Blog, Budget, Education, Featured Education | Comments (0)

The FY 2013 budget negotiated  by legislative leaders and Governor Fallin had some encouraging aspects. Overall appropriations increased by $253 million, or 3.8 percent, and there was additional funding for targeted priorities in human services, health care, transportation and public safety. However, despite a grassroots lobbying campaign by concerned parents and strong statements from school officials about the deepening school funding crisis, education ended up as odd-man-out when it came time to allocate new dollars.

continue reading Still stuck in a hole: Funding for public education falls flat

Graph of the Day: State support for schools has fallen while enrollment rises

by | May 22nd, 2012 | Posted in Blog, Budget, Education | Comments (3)

NOTE: This post has been updated to reflect slightly revised numbers in state aid funding for FY 2008 and FY 2012. The text has been corrected to correspond.

The FY 2013 budget agreement announced yesterday provides no increase in state aid for public schools. The Legislature did provide additional dollars to ensure that health benefits for teachers and support staff would be fully funded in 2013, along with bonuses for Board-certified teachers. However, the  General Appropriations Bill, SB 1975,  appropriates $1.816 billion for FY 2013 in funding that gets distributed to school districts through the state aid formula  to pay salaries and general operating expenses.   This is the same amount as in FY ’12.

As can be seen from the graph below, the proposed flat funding for public schools in 2013 follows three straight years of cuts in state aid. Since FY 2009, state aid funding has declined by $221 million, or 10.8 percent. Since the 2007-08 school year, public school enrollment has increased by  24,429 students. This equates to a 14 percent decrease in state support per student, from $3,163 to $2,726. In addition, since the beginning of 2008, inflation has boosted the overall costs of goods and services by 9 percent.

State Superintendent Janet Barresi requested an increase of $78.2 million in state aid funding for FY 2013 to return to FY 2011 levels. More recently, parents and educators had urged the Legislature to boost state aid funding by $50 million to avert further teacher layoffs and loss of programs. The failure to provide any additional money to support schools despite allocating $33 million for cuts to the top income rate, is sure to be regarded by many as a grave instance of misplaced priorities.

(Oklahoma Economic Report) Natural Gas: Beneath the surface

by | May 2nd, 2012 | Posted in Blog, Budget | Comments (0)

Source: OK Policy Note: Gross production tax revenues are from production months, two months prior to date of tax remittance

This article appeared in the April 2012 edition of the Oklahoma Economic Report, a publication of the Office of State Treasurer Ken Miller. It is reprinted here in its entirety with permission.

It seems that each day brings another story of record low natural gas prices and record high supplies. A warmer-than-normal winter in the United States drove down natural gas demand this year at a time when prices usually rise and supplies are reduced.

As a result, natural gas in storage is at or near record levels while prices are at their lowest in more than a decade. The U.S. Energy Information Administration (EIA) estimated natural gas in storage at the end of March at 2.48 trillion cubic feet, about 57 percent higher than at the same time last year.

According to Bloomberg, the average spot price in April at the Henry Hub in Louisiana was $1.99 per thousand cubic feet (mcf) as of April 27.

continue reading (Oklahoma Economic Report) Natural Gas: Beneath the surface

The buck stops anywhere but here

by | January 30th, 2012 | Posted in Blog, Budget | Comments (3)

Rep. Earl Sears

Last week I participated in a StateImpact Oklahoma forum on the state budget with Rep. Earl Sears, the Chair of the House Appropriations and Budget Committee (R-Bartlesville),  and Sen. Tom Adelson (D-Tulsa).  An audience member asked the legislators what they would do to ensure that more individuals with mental illness were provided treatment in the community rather than in jails and penitentiaries.

Rep. Sears responded by saying that he is very supportive of the work being done by Commissioner Terri White and the Department of Mental Health and Substance Abuse Services to raise awareness about the prevalence and cost of mental illness. In particular, Rep. Sears praised the Department’s ‘Smart on Crime’ initiative‘ that uses evidence-based programs to reduce recidivism and decrease demand for correctional beds. By diverting non-violent offenders into programs such as drug court, mental health court, or other similar programs, Smart on Crime can reduce incarceration and ultimately save substantial tax dollars. The initiative, however, requires an upfront investment estimated at close to $100 million. And, Rep. Sears stated ruefully, we just don’t have $100 million to invest in Smart on Crime.

continue reading The buck stops anywhere but here

Growing disconnect between budget politics and reality

by | December 29th, 2011 | Posted in Blog, Budget | Comments (0)

Last week we reported that next year’s revenues are expected to be 7 percent below their levels of six years ago (FY ’07), even though costs are higher due to inflation, population growth, and increased caseloads

Elsewhere, people seem to have read a different budget estimate than the one we saw. Two elements of the discussion show a growing disconnect between Oklahoma’s budgetary politics and reality.

First, Governor Mary Fallin and many others continue to advocate for reduction or elimination of the state income tax. A closer look at the budget shows that, of the $400 million forecast revenue growth from FY ’11 to FY ’13, fully  half comes from the income tax. Overall, the income tax is expected to provide $2.5 billion next year for General Revenue, the HB 1017 Education Reform Fund, and the ROADS Fund, which has helped restore the worst of our roads and bridges. Cutting this vital revenue support makes no budget sense. It also makes no economic sense.

continue reading Growing disconnect between budget politics and reality

Cutting the income tax is the wrong priority for Oklahoma

by | November 9th, 2011 | Posted in Blog, Taxes | Comments (1)

While some state leaders continue to discuss making top-down cuts to the income tax or eliminating it entirely, a new OK Policy issue brief shows why that policy is ill-advised.

Before the economic downturn, the income tax brought in more than $2.5 billion a year. In FY 2010, it made up about one-third of all state tax collections. It is the single largest source of support for education, health care, transportation, public safety, and other necessities. The state could not provide basic, essential services without income tax revenue unless other taxes were drastically increased.

The issue brief shows that shifting to greater reliance on other taxes would disadvantage local business, create more risk of revenues not being adequate to needs, and put a disproportionate burden on low- and moderate-income Oklahoma families. Contrary to the claims of its critics, Oklahoma’s income tax is not a hindrance to the state’s business climate or a spur for people to move out of state. In fact, Oklahoma is out-competing most states that lack an income tax.

After three years of repeated cuts to the state budget, the state has fallen further behind in funding teacher salaries and benefits, staffing our prisons and juvenile facilities, and ensuring the safety of children at risk of abuse and neglect, among other vital functions. We face growing obligations to fund our public pensions, protect our water system, repair our crumbling infrastructure, and take care of an aging population. In this context, cutting the income tax is the wrong priority for Oklahoma’s future.

You can download the full 8-page issue brief here. Find more presentations, fact sheets, blog posts, op-eds and newspaper articles addressing Oklahoma’s tax reform debate here.

Good times don't last forever

by | October 11th, 2011 | Posted in Blog, Budget, Taxes | Comments (3)

Highway 51 Bridge between Wagoner and Coweta. Photo by flickr user doug_wertman used under a Creative Commons License.

Last week, Gov. Fallin announced a plan to fix the state’s decaying bridges by 2019. The proposal involves putting more money in the ROADS fund, which receives a portion of income tax revenues that would otherwise go to the state’s General Revenue Fund.

OK Policy released a statement on the Governor’s plan that was mentioned by both The Oklahoman and The Tulsa World:

We welcome Governor Fallin’s focus on fixing Oklahoma’s crumbling bridges. However, we must note that her proposal would be paid for entirely by diverting more income tax revenues from an already cash-strapped state budget. At the same time, Governor Fallin and other state leaders are promoting further cuts or outright abolition of the income tax. This should remind us that the income tax remains vital for funding Oklahoma’s needs and that we cannot meet our obligations to pay our bills while undermining our revenue base.

The Oklahoman included a response from the Governor’s spokesperson that the effort to fix bad bridges “does not reflect a lack of commitment to other areas of government.” Fallin’s office told The Oklahoman, “much of the additional transportation funding would come from growth revenue, and Oklahoma has enjoyed nice growth in revenue this fiscal year.”

continue reading Good times don't last forever

'Flip It To Fix It' report offers an immediate, fair solution to state budget shortfalls

by | May 25th, 2011 | Posted in Blog, Taxes | Comments (7)

A study released today finds that inverting state tax structures—whereby the highest income earners would be taxed at the current percentage of income for the lowest income earners, and vice versa—would raise more than $4 billion in new revenue for Oklahoma (a 35 percent increase). The additional revenue would immediately eliminate state budget shortfalls and avoid the serious consequences of budget cuts.

The report, titled “Flip It to Fix It: An Immediate, Fair Solution to State Budget Shortfalls,” attributes a large part of states’ current deficits to regressive tax structures that are designed to fail.

Current vs. Inverted State and Local Tax System in Oklahoma (click for larger image)

“Trying to raise adequate revenue through a regressive tax structure—where a greater percent of income is demanded of the poor than the well-off—is like trying to squeeze water from a stone,” said Karen Kraut, coordinator of state tax policy at United for a Fair Economy and co-author of the report.

[See OK Policy’s press release announcing the report here.]

In 2007, the poorest 20 percent of Oklahoma households paid 9.9 percent of their income in sales, property, and income taxes, which is nearly twice as much as the 5.9 percent of income paid by the wealthiest 1 percent. The cut to the top income tax rate set to go into effect next year will worsen the disparity, as the wealthiest 20 percent of Oklahomans will take home nearly three-fourths of the tax cut while the bottom 60 percent of Oklahomans together receive only 9 percent of the benefit.

continue reading 'Flip It To Fix It' report offers an immediate, fair solution to state budget shortfalls

Budget cuts are a choice

by | May 10th, 2011 | Posted in Blog, Budget | Comments (5)

In a recent article on state budget negotiations, House Speaker Kris Steele said he and other state leaders are “doing our best to minimize the cuts” to core agencies. He contrasted the treatment of core agencies to the larger cuts that would be made to other areas of government.

This is a red herring. Perhaps education will be cut 5 percent, compared to, say, a 10 percent cut to the Department of Environmental Quality. But those areas identified as core services (education, health and human services, public safety, and transportation) already make up almost 90 percent of state appropriations.

The real issue is not how the vast majority of the budget is treated compared to a few of the smallest state agencies. Speaker Steele and other lawmakers cannot claim in good faith to be protecting core services while ignoring revenue options and voting to make the problem worse.

continue reading Budget cuts are a choice

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4