Archive for 2012

Update: Rainy Day Fund Basics

by | July 16th, 2012 | Posted in Blog, Budget | Comments (0)

This is a revised and updated version of a page from OK Policy’s Online Budget Guide authored by Paul Shinn.

[UPDATE: A previous version of this post incorrectly said that the maximum amount for the Rainy Day Fund is 15 percent of the current year's revenue estimate. The maximum is actually 15 percent of the amount certified in the General Revenue Fund for the preceding year.]

Last week, State Finance Director Preston Doerflinger announced that the state was set to make a $307 million deposit into the Rainy Day Fund. This short primer explains how the Rainy Day Fund works and traces its rising and falling balances in recent years. A 1-page PDF version of this primer is available here.

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How the Rainy Day formula requires us to make mistakes

by | July 18th, 2011 | Posted in Blog, Budget | Comments (3)

Last Monday, State Finance Director Preston Doerflinger announced that the state would be depositing $219 million in the Constitutional Reserve Fund (commonly referred to as the “Rainy Day Fund”) this year. Seen alongside news that lawmakers had to overcome a $500 million budget shortfall, with resulting severe cuts to child care subsidies and teacher training, among others, it may seem strange that we are setting aside so much money that could otherwise be used to protect these important programs.

The reason is an artifact of how the Rainy Day Fund is implemented. The trigger for making deposits into the fund depends not on budget needs, but on how good we are at forecasting revenues. Each year, the State Board of Equalization estimates how much tax revenue the state will receive in the coming fiscal year. If General Revenue (GR) collections come in above projection, the Rainy Day Fund gets the surplus, until the fund is at 15 percent of the previous year’s GR certification.

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Quick Take: Rainy Day Fund basics

by | July 18th, 2011 | Posted in Blog, Budget | Comments (4)

This is a revised and updated version of a page authored by Paul Shinn from OK Policy’s Online Budget Guide

Oklahoma’s Rainy Day Fund helps protect against economic downturns. The Rainy Day Fund (formally known as the Constitutional Reserve Fund) was created in 1985 in response to a dramatic revenue downturn. It is designed to collect extra funds when times are good and to spend those funds when revenues cannot support ongoing state operations.

Money flows in to the Rainy Day Fund when revenue is more than estimated. Any General Revenue Fund collections beyond 100 percent of the estimated amount must be deposited into the Rainy Day Fund (unless it already has the maximum amount specified by the Constitution, 15 percent of the current revenue estimate for the General Revenue Fund).

The Constitution allows the Fund to be spent in four instances:

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In The Know: July 14, 2011

by | July 14th, 2011 | Posted in Blog, In The Know | Comments (0)

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

The first meeting of a legislative task force for the study of state tax credits and economic incentives is scheduled for this Friday.  Oklahoma City Councilman Ed Shadid calls for halting plans to build a convention center downtown in favor of quality of life projects like trails, sidewalks and senior wellness centers.  Republican State Representative George Faught announced his candidacy for Congress in Oklahoma’s Second District.  CapitolBeatOK presents different perspectives on the state’s recent $219 million deposit into the Rainy Day Fund.

Home foreclosures in Oklahoma were down significantly during the first half of this year.  The Tulsa area had the eighth-fastest growth in clean economy jobs between 2003 and 2010.  Oklahoma has seen a sharp increase in oil drilling.  Sen. Tom Coburn may rejoin a group of senators known as the ‘Gang of Six’ for bipartisan budget negotiations.  Grand Lake’s blue-green algae toxin warning has been lifted

Edmond joins Oklahoma City in establishing a water conservation schedule and will temporarily buy needed water from Oklahoma City.  Citizens of Ada ask for a public apology from the city after the chair of a city beautification committee used the n-word during a meeting.  The number of Oklahoma residents who say they are living with a same-sex partner has increased dramatically, according to the 2010 Census.

The OK Policy Blog has an interview with the interim director of the University of Tulsa’s new School of Urban Education.  In Today’s Policy Note, the National Employment Law Project issued a report documenting widespread hiring discrimination against the unemployed.  Today’s Number of the Day is how many jobs Oklahoma needs to get back to pre-recession levels. These stories and more below the jump.

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The 5 percent solution?

by | April 21st, 2011 | Posted in Blog, Budget | Comments (3)

After two straight years of cuts, the state’s budget situation remains dire. Despite the economic recovery and improving revenue collections, the state faces a huge shortfall for next year. The substantial non-recurring revenues that were used to balance the budget over the past two years, including federal stimulus dollars, state reserve funds, and assorted one-time revenue enhancements,  have mostly dried up.  The Board of Equalization has certified some $500 million less in available revenue for FY ’12 than what was appropriated for the current year budget. As we stated in our recent issue brief on protecting core services:

The impact (of budget cuts) is being felt by Oklahoma families, businesses and communities in far-ranging ways… Deeper cuts will further impinge the ability of state agencies to fulfill their core missions and may seriously affect the well-being of schoolchildren, seniors, persons with disabilities, correctional and public safety officers, and other members of our communities.

In this context, the Governor and legislative leaders are actively considering additional ongoing or one-time revenue sources that could avert truly catastrophic cuts to core services. One option being discussed is appropriating this year’s “5 percent money” for next year’s budget.  This post explains the “5 percent option” and suggests why, on balance, we think a portion of this money should be used, along with other revenue solutions.

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Hey Mikey! Raising the Rainy Day Fund cap is the one ballot measures everyone can like

by | October 14th, 2010 | Posted in Blog, Budget, State Questions | Comments (0)

Remember Mikey from those old cereal commercials? He was the picky eater whose siblings foisted a bowl of  Life cereal in front of him saying, “It’s supposed to be good for you. But he won’t eat it. He hates everything”. As Mikey  gobbles up his cereal, they exclaim, “He likes it!” (The commercial is, of course, available on You Tube).

When it comes to the state questions on this November’s ballot, Tulsa World editor Wayne Greene has been playing the role of Mikey. This summer he penned a series of columns (you can read a couple of them here and here) that explored the eleven constitutional changes that Oklahoma voters will decide this election.  His verdict:

…I haven’t found much to like. Most of the questions on the ballot range from the vaguely obnoxious (reconfiguring the membership of a state commission that has not met one time in state history) to the truly malignant (requiring voters to show government-issued IDs in order to vote). If you’re an all-or-nothing kind of person, the best choice clearly would be to simply go down the line and mark “no” on every question.

However, Greene’s “Life (cereal) – changing moment” came with the eleventh and final proposal on the November ballot, SQ 757, which would increase the cap on the state’s Constitutional Reserve Fund, or Rainy Day Fund, from a maximum of 10 percent of General Revenue Fund collections to 15 percent. Somewhat grudgingly, Greene concedes:

But there is one referendum – State Question 757 – that is a pretty good idea.

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These go up to 11: Sorting the State Questions on the November Ballot

by | September 6th, 2010 | Posted in Blog, State Questions | Comments (0)

Oklahoma voters have the great good fortune this November to decide the fate of no less than 11 proposed constitutional amendments on matters ranging from education funding and health care reform to judicial nominations and (we kid you not) Sharia law. For the confused voter – which means you, me and everyone else – here are some resources on the ballot measures that may be helpful in understanding these issues and making informed decisions. We will keep the State Ballot Question page of our website updated as additional information and resources become available.

OVERVIEWS

The State Election Board has compiled all eleven state questions into a single PDF document.

These websites provide helpful overviews of all the measures on November’s ballot:

  • The Secretary of State lists each proposed state question, along with the short title that will appear on the ballot. You may also view the full text of the document by selecting the corresponding Adobe PDF icon.
  • Ballotpedia provides a list of the questions and links to additional information on each one.

INDIVIDUAL QUESTIONS

For each question, we link to the Ballotpedia article and full text of the measure from the Secretary of State’s website. Where available, we’ve identified selected additional information and analysis, including pieces we have published and analysis by two journalists – Wayne Greene, an editor of the Tulsa World, and Patrick McGuigan, editor of CapitolBeatOK.com – who have published columns on several ballot measures.

State Question 744: Amount of money the State provide common schools

State revenue glass: Half-full or half-empty?

by | August 10th, 2010 | Posted in Blog, Budget | Comments (0)

Treasurer Scott Meacham today announced that General Revenue (GR) collections for the first month of the new state fiscal year, FY ’11, came in 9.9 percent above the prior year and 11.9 percent above the official certified estimate. The sales tax and corporate income tax saw the strongest growth compared to July 2009, while personal income tax collections were off by 0.1 percent from a year ago, likely reflecting the persistence of weak employment numbers.

Although one must be careful of drawing conclusions based on a single month, July’s collections confirm that revenues are continuing the upswing seen in recent months and should further dispel fears that the state will face a third consecutive year of revenue shortfalls requiring mid-year cuts.  It now seems far likelier that the economic projections made in February that formed the basis of this year’s budget underestimated the speed and strength of the economic recovery. If GR continues to come in above 100 percent of the estimate over the course of the full year, the surplus will go to replenishing the Rainy Day Fund.

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From the frying pan to the fire: As FY 10 budget battle re-erupts, the real hard work waits

by | March 2nd, 2010 | Posted in Blog, Budget | Comments (3)

Just when it looked as if the the extended negotiations over how to address FY ’10 budget shortfalls were finally resolved, a new wrinkle emerged this week.  As a means to protest the continued failure to find supplemental funds for senior nutrition programs in the Department of Human Service, Senate Democrats refused to approve the emergency clause on a bill to transfer $30 million to the Special Cash Fund . Without an emergency clause, the transfer cannot take effect until July 1st, which threatens a whole series of agreements between the House, Senate and Governor intended to put this year’s budget to rest. (Update: an agreement was announced Wednesday afternoon on funding for senior nutrition programs allowing the emergency clauses for the funding bills to be passed).

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FY '10 Budget: Not a done deal?

by | February 8th, 2010 | Posted in Blog, Budget | Comments (1)

Just before the start of the Legislative session, Governor Henry announced that he had reached an agreement with Speaker Benge and President Pro Tem Coffee on the FY ’10 budget.  Faced with projected mid-year revenue shortfalls of slightly more than $800 million, the leaders agreed that agency appropriations from the General Revenue Fund would continue to be cut by 10 percent for the remaining months of the year, with supplemental funding made available to certain agencies (Common Ed, Higher Ed, Health Care Authority, Corrections and Rehab Services) to mitigate the extent of cuts.

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