In The Know: Budget hole grows to $1.3 billion amid oil bust

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

Budget hole grows to $1.3 billion amid oil bust: State officials said Thursday that the hole in next year’s budget has grown to $1.3 billion. There will be 19.1 percent less money to appropriate for new budget than was available for the current spending plan, the state Office of Management and Enterprise Services said. The oil bust has drained revenue from the state, making it harder to fund government services [NewsOK]. The state budget deficit is not just oil prices [OK Policy].

State should follow tribal pattern of investment more in education, not less: The new state legislative session is one we will all be watching closely. Our policymakers in Oklahoma City have a challenging task ahead as they try to create an operational budget for the state while being millions of dollars in the hole. Unfortunately, most state agencies remain funded at more than 20 percent below pre-recession funding levels because budgets have not kept up with inflation. It’s a tough situation, and state leaders must make difficult decisions to balance the budget [Bill John Baker / Tulsa World].

Interim Corrections Chief: Parts of Prison System ‘Not Even in the 20th Century’: After a little more than a month on the job and touring more than a dozen facilities, Interim Oklahoma Department of Corrections Director Joe Allbaugh said he believes the agency is in a precarious position. In an interview with Oklahoma Watch, Allbaugh, 62, said Oklahoma’s prison system is dangerously antiquated and changes are needed. Among possible moves: leasing dormant private prisons and closing portions of outdated and dangerous state-run facilities [Oklahoma Watch].

Fallin’s general counsel resigns amid execution inquiry: The general counsel for Oklahoma Gov. Mary Fallin resigned Thursday amid a grand jury investigation into how the wrong drug was delivered for the state’s last two scheduled executions. Fallin spokesman Michael McNutt confirmed Steve Mullins stepped down after three years as the governor’s top attorney, but did not say whether his resignation was connected to the probe [NewsOK].

Two ‘no-brainers’ for fixing Oklahoma’s budget crisis: The theme of the Oklahoma Policy Institute’s third annual State Budget Summit could have been the exhortation by the institute’s outreach and advocacy specialist, Kara Joy McKee, who urged the audience, “Feel the fear, but do it anyway.” The institute pulled no punches in documenting Oklahoma’s “full-fledged budget emergency.” After adjusting for inflation, the state’s current budget is nearly $900 million, or more than 11 percent below 2009, when Oklahoma was mired in the Great Recession [NonDoc]. Here are some reasonable solutions to the budget crisis [OK Policy].

Should Oklahoma broaden the sales tax to more services? As part of her effort to close the state’s budget shortfall and avoid devastating cuts, Gov. Mary Fallin has proposed $910.5 million in additional revenues in her FY 2017 Executive Budget. The largest revenue item involves changes to the sales tax, which she labels “sales tax modernization.” In her State of the State speech, the Governor explained that, “Modernizing the sales tax code means keeping the same low rates and applying them in ways that better reflect today’s commerce and consumer behaviors.” [OK Policy]

The working poor, double-dipping and tax incentives: Only eight days into session, it’s already clear who will – and who won’t – be paying for the Legislature’s disastrous seven-year fiscal experiment. With a nearly $1 billion and growing budget hole, most state leaders aren’t the least interested in pivoting away from the chief culprits – income tax cuts that disproportionately benefit the wealthy and oft-dubious tax credits and incentives sucked up by corporations [Arnold Hamilton / Journal Record]. 

Measuring Up: Arkansas breaks ranks on ‘Obamacare’ with some surprising results: When it comes to health, Oklahomans could find a lot better role models than their cousins in Arkansas. On the other side of the border, more folks smoke, eat and drink too much, and a lot of them die earlier than they should. Oklahoma ranks 45th in the 2015 America’s Health Rankings report. Arkansas ranks 48th. We’re bad. They’re worse. Until you get to health insurance coverage [Wayne Greene / Tulsa World]. Its successes in other states show that expanding coverage is a good deal for Oklahoma [OK Policy].

Senate committee approves bill to let state issue earthquake insurance: A Senate panel on Thursday passed a bill that would let the state get into the earthquake insurance business. “Upon a finding there is a lack of adequate earthquake insurance coverage available to residents in the State of Oklahoma, the Insurance Commissioner is hereby empowered to create an earthquake re-insurance program, to be administered by the state,” said Senate Bill 1497, submitted by Sen. Clark Jolley, R-Edmond [Tulsa World].

Slash to Oklahoma Budget Means Teacher Cuts In Grove: Layoffs are looming, as public schools in Oklahoma prepare for more budget cuts to state education. Some of the smaller districts are starting to feel the effects. The Grove Public School District is bracing for a 10 percent cut in state funding, which superintendent Sandy Coaly says comes out to about $1.1 million. “You started out your school year with a budget number, and you planned on that budget, and now it’s just dwindling,” Coaly said [NewsOn6].

Wind power grows, but transmission capacity lags behind: The wind energy industry grew 56 percent in 2015, and turbine farms are expected to grow more in 2016. But there may not be enough infrastructure to get wind-generated electrons to market. The Wind Coalition Executive Director Jeff Clark said turbine farms are built faster than the transmission lines to connect them to the grid. That infrastructure problem presents a long-term challenge for the entire Plains region, he said [Journal Record].

State Budget Crisis Could Leave Small Towns With Big Infrastructure Problems ‘Dead in the Water’: It costs a lot of money to clean, transport and dispose of water. Big cities can spread the cost of multi-million dollar sewer or treatment projects across thousands of customers. But many small Oklahoma towns don’t have that option, and often rely on a state-funded grant program that’s being squeezed by budget cuts [StateImpact Oklahoma].

Quote of the Day

“While we are contributing more [to the state], it might not seem like it because state tax cuts offset those dollars. As more tribal gaming and car tag dollars go into state coffers, less is invested at the state level. In essence, tribes help fill the gap created by tax cuts. As tribal governments, it’s disappointing to see our investments in education eroded by the state budget process as we are trying to build a better future within our communities.”

– Cherokee Nation Principal Chief Bill John Baker (Source)

Number of the Day


Age-adjusted drug overdose death rate per 100,000 people in Oklahoma in 2014, 10th highest in the US

Source: U.S. Centers for Disease Control and Prevention

See previous Numbers of the Day here.

Policy Note

Black Harvard graduates have the same shot at a job call-back as white state college grads: Racism is so pervasive in the US job market that even black Americans with Harvard degrees are at a disadvantage, according a new study in the journal Social Forces (highlighted in Inside Higher Ed). Using carefully designed test resumes submitted for job openings, the researchers found that black graduates of elite universities such as Harvard, Stanford, and Duke were as likely to get responses from employers than white graduates of much less prestigious state colleges, such as University of California, Riverside, the University of Massachusetts, Amherst, and University of North Carolina, Greensboro [Quartz].

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Carly Putnam joined OK Policy in 2013. As Policy Director, she supervises policy research and strategy. She previously worked as an OK Policy intern, and she was OK Policy's health care policy analyst through July 2020. She graduated from the University of Tulsa in 2013. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. Carly is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification; the Oklahoma Developmental Disabilities Council’s Partners in Policymaking; The Mine, a social entrepreneurship fellowship in Tulsa; and Leadership Tulsa Class 62. She currently serves on the boards of Restore Hope Ministries and The Arc of Oklahoma. In her free time, she enjoys reading, cooking, and doing battle with her hundred year-old house.

One thought on “In The Know: Budget hole grows to $1.3 billion amid oil bust

  1. Regarding the new DOC director article, not as bad as he could be (see the last director), but still the kind of disingenuousness that has pervaded the politics of OK corrections, not its operations, for the decades he mentions. The facts are that OK in the mid-90s passed a corrections reform proposal that had passed in NC as well. The DAs, sheriffs, and so-called victims’ groups killed the proposal after Governor Keating got burned by Lamonte Fields, an early release whose early release let him kill a few days earlier the people his grandmother swore he was going to kill even if he hadn’t been early released. Keating brought in his best man from his wedding, a former FBI guy who then headed the Corrections Corporation of America, to pro bono study the OK prison system and, surprise, deduce that the system needed more prisons of the private variety. In the meantime, NC implemented what OK rejected and has seen its crime rates, particularly violent crime rates, reduced far below OK’s over the same period, but even lower than the national average which gets high praise. Politics, not administration.

    The private prison industry wined, dined, and paid for inaugurations of state officials who in turn beggared the state prison system intentionally to make it decrepit to justify using more and more private companies. The highlight of that campaign was a legislated audit by an independent firm that was intended to show that OK’s system was screwed up by all these “directors who came up through the system.” Unfortunately, the auditors actually were independent and ended up, besides taking home almost a million dollars of taxpayer money, testifying that the system worked far better than the state deserved thanks to those incompetents the current director condemns. The audit also made recommendations that echo the article above and that was almost a decade ago, a period almost exclusively covered by the governor who appointed the current director after her previous hire turned into a nightmare and retreated back to, surprise again, a private prison company. Politics, not administration.

    Oklahoma Watch covered well the development and destruction of the Justice Reinvestment Initiative, a weak tea version of what passes for sentencing reform these days and a far cry from the 1990s reforms. Once again, the current governor was at the forefront of all this and overseeing with high dudgeon the removal of the use of revolving funds from departmental control, the only funds that were available outside the beggaring of state corrections and legislatures to keep the duct tape and baling wire holding the state prisons together. A new and incompetent director, no funds to holding the chicken wire in place, voila! The disaster that even a FEMA head who oversaw Katrina could understand. He’s going to solve the “paper” problem at DOC? Has he talked to anyone who worked on the last effort a decade ago to do that but ran into the same funding and technical problems everything else there was forced to go through? He really thinks he can solve that with the state in the financial situation it’s in? Well, maybe he can, given that prisons are among the few things this governor is willing to put money into, especially if they’re private. What a shock that that seems to be the only solution he can come up with since anything else would be, you know, not administration.

    In the meantime, OK will continue to . . . well, to need a Watch. Thanks for your efforts here and theirs.

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