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:

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Why a federal Balanced Budget Amendment will never happen, and why that’s a good thing

by | October 6th, 2011 | Posted in Blog, Budget | Comments (1)

[This post has been changed slightly from the original. An earlier version questioned SoonerPoll’s reliability without providing evidence to back up that claim.]

As part of the agreement to raise the federal debt ceiling, Congress will vote on a Balanced Budget Amendment this fall. Every Republican Senator has endorsed it. So have many Oklahoma state legislators.

So what’s the problem with a Balanced Budget Amendment?

#1: The BBA endorsed by Senate Republicans is not really about balancing the budget.

In fact, this amendment would make it much harder if not impossible to balance the budget, because it would require any tax increases to have a two-thirds majority in both houses of Congress.

On top of that, it says total spending cannot exceed 18 percent of GDP. To understand how radical this is, we should realize that not a single year’s budget under the George W. Bush or Reagan administrations would be constitutional under this rule. Even Rep. Paul Ryan’s budget plan, which included cuts so unpopular that they were quickly abandoned by Republicans, would have spent too much under this amendment.

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If you think this is bad…Federal fiscal relief funds averted budget doomsday

by | June 16th, 2010 | Posted in Blog, Budget | Comments (1)

The state’s deep and prolonged budget crisis has taken a serious toll on public services in Oklahoma.  We have seen rate cuts to providers of community-based health services, elimination of violence prevention programs for at-risk youth, closures of facilities for persons with mental health and addiction problems, and layoffs of hundreds of teachers and public employees, to cite just a few examples (see our updated compilation of state and local cuts). Overall, as we laid out in our FY ’11 Budget Highlights fact sheet, state appropriations have been cut by almost $400 million, or 7.2 percent, compared to FY ’09, and more than half of all appropriated state agencies must absorb state funding cuts of at least 15 percent.

Yet the impact of the downturn would have been genuinely catastrophic had Congress not provided substantial fiscal relief to the states as part of last year’s stimulus bill.  Formally known as the American Recovery and Reinvestment Act,  the stimulus bill provided states money in two basic forms – a State Fiscal Stabilization Fund, intended primarily for common and post-secondary education, and enhanced federal matching funds for Medicaid. Over the past two years, the Legislature approved the use of $1.375 billion in stimulus funds, allocated as follows:

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Enhanced Medicaid match extension would help state budget and low-income families

by | March 24th, 2010 | Posted in Blog, Budget | Comments (3)

One of the most important provisions of the stimulus bill passed by Congress last February was the assistance provided to beleaguered state budgets in the form of enhanced federal matching rates for Medicaid. Now, as Oklahoma and other states remained mired in a deep fiscal crisis, the prospects seem good for an extension of the enhanced federal Medicaid match for an additional six months. This is one of the few promising signs on the fiscal horizons, and good news for the hundreds of thousands of Oklahoma families that receive health insurance coverage through Medicaid.

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Saved by the net: Food assistance programs help mitigate recession’s impact

by | November 20th, 2009 | Posted in Blog, Poverty | Comments (1)

This week we released the November issue of Numbers You Need (PDF), our monthly look at key data on the state’s economy  and budget. As we reported in the bulletin, one of the clearest signs of the depth and length of the economic downturn is that participation in the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, rose for the seventeenth consecutive month in August. The program provided benefits to 524,536 people in August, an all-time high, and an increase of 27.3 percent compared to March 2008.

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Summer re-run: Domestic violence programs provide shelter from the storm

by | September 4th, 2009 | Posted in Blog, Children and Families, Stimulus | Comments (0)

Note: Occasionally we are re-running blog posts on topical subjects that you may have missed the first time around. Last week, the Tulsa World reported that DVIS (Domestic Violence Interventions Services) of Tulsa has been awarded a $426,335 grant from violence prevention funds that were part of the federal stimulus bill to assist clients with emergency needs. In June we ran this blog post about the important role of federal stimulus funds for domestic violence shelters facing increased demands for services from families in distress:

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Is spending the easy part? Stimulus transparency is opaque

by | July 30th, 2009 | Posted in Blog, Stimulus | Comments (0)

As the debate about the speed and impact of stimulus spending rages on, Good Jobs First is taking on the less glamorous but equally important task of assessing accountability in state spending of funds from the stimulus bill (more formally, the American Recovery and Reinvestment Act, or ARRA). They’ve launched the STAR (States for a Transparent and Accountable Recovery) Coalition, a national web site that assesses state efforts to inform citizens about ARRA spending.

Accountability is essential for any government program. Taxpayers cannot determine whether their resources are being used appropriately unless they can tell what is being spent, where it is spent, who is benefiting from the spending, and what is being accomplished. Congress and President Obama built unprecedented accountability tools into ARRA. If carried out faithfully, these tools will help us determine not just if the stimulus money is spent fast, but if it is spent right.

This week, STAR released a report that gave states two grades – one for a state’s main ARRA website and one for its reporting on transportation spending. Results are mixed.

Some state ARRA sites support the President’s promise that the $787 billion stimulus plan will be carried out with “an unprecedented level of transparency and accountability.” Other state sites are half-hearted efforts that provide residents little useful data on the largest federal stimulus since the New Deal.

Oklahoma comes out below average in STAR’s ratings. Oklahoma’s main site does a good job of centralizing program information and showing how funds are allocated in the state, but falls short in showing where money is being spent, which projects are being funded, and who is getting contracts. To this, we’d add that the site has an excellent compendium of news releases on the stimulus, but the site is  not always kept up to date.

The Oklahoma Department of Transportation (ODOT) site fares better in STAR’s rating, but still lags behind other states. It provides detail on individual projects and contracts, but offers no summary information on how much is being spent in a county, with a single contractor, or even how much is for new roads vs. resurfacing.

Also this week, OK Policy released its  second Stimulus Update, which evaluates over $700 million in ARRA infrastructure funding in Oklahoma. Nearly $400 million in Oklahoma Department of Transportation (ODOT)  projects, mainly resurfacing of state highways, are under contract and spending has topped $40 million. Federal, state, local, and tribal governments will be replacing buses, rehabilitating airport runways and dams and flood control structures, and expanding water and waste water systems. Infrastructure programs, which make up eight percent of all ARRA spending, can help Oklahoma’s economic recovery and pave the way for economic growth and lower costs in the future. With improvements in our accountability efforts, we’ll be able to tell when and where projects are being funded, who is building them, and what they are accomplishing.

Our stimulus page includes the previous Stimulus Update, as well as our earlier stimulus issue brief and fact sheet and links to valuable ARRA resources.

Oklahoma's new state budget–the first word

by | June 4th, 2009 | Posted in Blog, Budget | Comments (0)

Just a day after Governor Brad Henry signed the state budget for FY ’10, Oklahoma Policy Institute released its annual budget review. And the new fiscal year, which starts July 1, promises to be an interesting one:

all agencies face a tight and difficult year ahead as they wrestle with increases in mandatory operating expenses and, for some, rising caseloads in a downturn, with flat or reduced funding.

This year, the adoption of the budget is just the start of a process that will unfold over the next 13 months. Agencies must allocate appropriated  and other funds to their programs, figure out how they’ll cover all these built-in cost increases, adjust service levels and, in all probability, adjust again later in the year. We won’t know until next June or later how it all worked out.

But it does start at the beginning, and that’s where our budget review helps. It is the first comprehensive look at the budget process and the outcomes it led to. Here’s what you’ll find inside:

  1. Analysis of the speedy drop in available state revenue.
  2. Details of how federal stimulus money and state revenue changes allowed the overall budget to grow slightly.
  3. A rundown of how individual agencies fared and what that says about state priorities.
  4. Further analysis of problems to watch for as the year unfolds.
  5. A look ahead to the FY ’11 budget and beyond.
  6. Recommendations to improve budgeting processes and to increase funding of state services in the economic recovery.

Once you’ve read the budget brief, you’ll be caught up with us and ready to see the rest of the budget picture develop.

Federal grants in Oklahoma–the whole picture

by | June 2nd, 2009 | Posted in Blog, Budget | Comments (0)

Federal stimulus money has been in the news nationally and in Oklahoma. It has expanded or stabilized a wide range of public services. The recently-completed state budget for FY’10 used $641 million of stimulus funding to make up for over $600 million in lost state revenue. The stimulus, though, is just part of a significant federal contribution to state and local government services in Oklahoma. In 2007, we received $5.5 billion in total grants.

What does all this federal money do? Our upcoming Online Guide to Oklahoma Budget and Taxes has some answers. The guide is unique among the available sources of information on government finance in Oklahoma. It is broader than any other source, covering both state and local government and describing all sources of revenue and spending, not just taxes and appropriations. Here’s an extract that provides an overview of federal funding and what it helps us accomplish.

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Stimulus Funds – There but for the Grace of Congress…

by | May 21st, 2009 | Posted in Blog, Budget | Comments (1)

It is clear that the $7.2 billion FY ’10 budget agreement reached by legislative leaders and the Governor will lead to a tough and painful year ahead as agencies struggle to address increased costs and growing caseloads on flat or reduced funding. However, there is no question that the state would be looking at a full-scale catastrophe if not for the availability of the federal stimulus dollars that were part of the $787 billion American Recovery and Reinvestment Act (ARRA) passed by Congress in February. As was reported when the budget agreement was announced, next year’s state budget is expected to include some $641 million of ARRA dollars. As we’ve been tracking the General Appropriations bill (SB 216) and agency budget bills making their way through the process over the final week of session, a number of important details about the use of stimulus funds in the FY ’10 budget are now coming to light.

As we discussed in our issue brief on the stimulus package, ARRA included two funding streams intended to help support state budgets battered by the economic downturn:

  1. The State Fiscal Stabilization Fund (SFSF), which is divided into two components: 81.8 percent is earmarked exclusively for education, while 18.2 percent is general purpose funding that can be used for “other high priority needs such as public safety and other critical services, which may include education”. Oklahoma was allocated $472.8 in education stabilization funds and $105.2 million in general purpose funds; and
  • Enhanced federal Medicaid matching funds (enhanced FMAP).  The amount of enhanced FMAP funding is dependent on both a state’s unemployment rate and the amount of a state’s Medicaid expenditures over the 27-month period, which began back in October 2008 and extends through December 2010, when the enhanced FMAP is in effect.  One recent estimate, from the Federal Funds Information for the States, estimates that Oklahoma will draw some $950 million in additional federal Medicaid funds, but legislative staff projects that the total will be closer to $800 million.

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