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With revenue growing again, can Oklahoma make up for a lost decade? (Capitol Update)

by | July 9th, 2018 | Posted in Budget, Capitol Updates | Comments (1)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

According to State Treasurer Ken Miller, gross receipts to the state treasury during FY-18 were at an all-time high. Receipts for the 12 months ending June 30, 2018, were $12.18 billion, an increase of $1.2 billion, or 11% over FY-17 gross receipts. According to Treasurer Miller, last month marked the 15th consecutive month of positive growth in monthly gross receipts compared to the prior year. Interestingly, only $33.8 million of the increase in receipts are attributable to revenue measures passed by the legislature in the 2017 session. This year’s tax increases only began to be collected on July 1, so none of the FY-2018 increased revenue is attributable to the 2018 tax measures.

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What we know – and don’t know – about the revenue bill veto challenge

In late March, on the eve of an anticipated teacher walk-out, Oklahoma lawmakers approved a series of bills intended to provide pay raises for teachers, school support staff, and state employees. To pay for the raises, lawmakers approved a number of revenue measures, including HB 1010xx, which managed to overcome the three-quarter supermajority requirement for tax increases established under State Question 640.

In May, a group called Oklahoma Taxpayers Unite launched a veto referendum petition drive that, if successful, would submit HB 1010xx to a vote of the people to approve or reject the new law. This effort has been designated Repeal Petition 25 (R.P. 25); if it gets on the ballot, it will be State Question 799. On June 22nd, the Oklahoma Supreme Court struck down the referendum petition, ruling that it was misleading and fatally flawed. The organizers subsequently announced that they were abandoning the petition effort, ensuring that both the tax increases and the pay raises would take effect on schedule.

This post addresses key questions related to the veto referendum effort. Language in bold reflects the Supreme Court’s June 22nd ruling, which renders moot much of the discussion on this page.  (Last Updated: July 9th)

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Bill Watch: This year in #okleg

Last week, the Oklahoma legislature adjourned one of the more extraordinary legislative sessions in recent memory – one that followed one special session, ran partially concurrently with another, included nine days of protests at the Capitol, saw the Legislature raise revenues for the first time in nearly 30 years, witnessed a first step in criminal justice reform after years of efforts, and resulted in the largest funding bill in state history (although not if adjusted for inflation). But in all of the confusion and breaking news, it was easy to miss other developments. In the posts below, brief summaries by issue area lay out the major victories and defeats of this spring’s legislative session.

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The FY 2019 Budget: Been down so long this looks like up

by | May 2nd, 2018 | Posted in Budget | Comments (1)

In the 1960s, the New York City poet and folksinger Richard Fariña published a novel titled “Been Down So Long It Looks Like Up To Me.” This title certainly applies to Oklahoma’s FY 2019 state budget, approved by the House and Senate last week. After several straight years of large shortfalls and repeated rounds of budget cuts, including mid-year cuts the past three years, lawmakers were finally able to pass a budget that kept funding for all agencies at least flat, provided modest increases for some critical programs and services, and included over $350 million for teacher pay raises.

State agencies next year will be appropriated a total of $7.567 billion in SB 1600, which is the annual General Appropriations bill. This is an increase of $718.5 million (10.5 percent) compared to the initial FY 2018 budget approved last May, and an increase of $601 million (8.6 percent) compared to the final FY 2018 budget, which included various mid-year cuts and increases. Next year’s appropriations will be the largest in state history, surpassing the $7.235 billion budget in FY 2015; however, when adjusted for inflation, next year’s budget remains 9.4 percent ($788 million) below the budget of FY 2009.

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New budget marks a return of line-item appropriations (Capitol Update)

by | April 30th, 2018 | Posted in Budget, Capitol Updates | Comments (1)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.

When Republicans took full control of the legislature, both House and Senate, they began a process of dismantling the use of line items in state appropriations measures. The policy took full root in 2010 when Republican governor Mary Fallin was elected. The new legislative majority felt it was not their place to dictate to the executive department, particularity through line-item budgeting, how to spend the appropriated dollars. They also accused Democrats of using line items to promote favored programs over others. In sum the mantra was to give the executive agencies flexibility in the use of funds in the name of efficiency.

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Unheralded law puts increased funding in doubt

by | April 18th, 2018 | Posted in Budget, Taxes | Comments (3)

Image by photosteve101/Creative Commons via flickr

Lawmakers this year have approved over half a billion in new taxes to pay for a package of spending measures, including increased pay for teachers, support staff, and state workers, and increased operating support for schools. While the new obligations are almost fully funded for the first year, in future years legislators are counting on growth revenue from an expanding economy to meet the spending commitments they’ve already made and to do more for education and other critical priorities.

But leaving economic uncertainties aside, there’s a hitch. Under a law passed quietly in 2016, several hundred million dollars could be directed automatically to a new budget reserve fund in FY 2020, rather than being available to meet funding commitments. Unless lawmakers revisit the law this session, they may find themselves facing major unexpected budget problems a year from now.

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The education funding package is a major step forward. There’s more work to do.

by | April 3rd, 2018 | Posted in Budget, Featured Budget & Tax, Taxes | Comments (3)

The Oklahoma Legislature last week passed a set of bills to provide pay raises to teachers, school support staff, and public employees funded primarily by a tax increase on tobacco, motor fuels, and gross production. Passage of the revenue bill was a truly landmark moment: it marked the first time that a major revenue bill has surpassed the three-quarters supermajority threshold for tax increases since passage of State Question 640 over a quarter-century ago, and it followed at least two years of intense but unsuccessful efforts to reach agreement on a grand bargain on the budget. More broadly, it signified a belated but clear recognition by Oklahoma lawmakers that renewed investment in education and other core services is critical for Oklahoma’s prosperity and requires significant new recurring revenue.

These bills mark a crucial step in tackling some of the state’s most urgent problems. But they in no way mark an end to the state’s budget challenges.  The new revenues fall short of fully funding new spending commitments. The state will also need additional revenue to balance this year’s budget and make greater investments in education and other needs in the future.

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Bill Watch: Next week in #okleg | March 30, 2018

In our weekly Bill Watch post, we discuss what happened and what to look for in the bills we’re following most closely in the Oklahoma Legislature. See our advocacy alerts page for more ways to take action on these issues.

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Statement: Revenues bill is a good start and lawmakers can do more

by | March 27th, 2018 | Posted in Budget, Press Releases & Statements | Comments (2)

Oklahoma Policy Institute released a statement on the House passage of HB 1010xx to fund a teacher raise and other serious public needs:

The revenues approved in HB1010xx are a great start to keeping our best teachers in the classroom and undoing the damage caused by years of budget cuts. With these revenues, Oklahoma will finally be able to provide significant raises for teachers and state workers and reverse some of our deep cuts to general school funding. The bill goes a long way to restoring the gross production tax, which had been hollowed out by unnecessary and unaffordable tax breaks that were holding back our whole state economy to benefit a few powerful special interests.

This plan won large super-majority support because lawmakers know that our state must increase revenues substantially to protect Oklahomans’ prosperity, health, and safety. While this legislation can begin to turn our state around, Oklahoma’s structural deficit was years in the making, and more must be done to put the whole budget back on a sustainable path. Lawmakers have plenty of time left in this session to approve popular and effective reforms like removing the expensive and ineffective capital gains deduction and restoring the Earned Income Tax Credit for working Oklahomans.

Many teachers and regular Oklahomans are skeptical that, after the hard-won passage of HB1010xx, lawmakers will not go back to their old ways of refusing to raise needed revenues and neglecting Oklahoma’s core services. Many are understandably choosing to keep the pressure on lawmakers until more change is evident. Oklahomans are focused on fixing the budget, and our legislators should not ignore their calls to do better.

Bill Watch: Next week in #okleg

This week we’re launching a new weekly update to our blog that previews some of the bills we’re watching in the Oklahoma Legislature over the next week. Throughout the week, we’ll continuing sharing advocacy alerts with ways that you can take action on key bills. Although there’s always potential for surprises in the legislative process, we hope this update will help you to be better prepared and informed about these key decisions being made for our state.

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