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FY '10 budget agreement leaves questions and challenges

by | January 27th, 2010 | Posted in Blog, Budget | Comments (0)

In a press release Tuesday afternoon, Governor Brad Henry, Speaker Chris Benge and Senate Pro-Tem Glenn Coffee announced agreement on how to address the shortfalls in the FY ’10 budget that have resulted from this year’s revenues coming in sharply below the certified estimate.

Based on the revised estimates for FY ’10 certified by the Board of Equalization in December, the state is looking at a total mid-year shortfall of $809 million in FY ’10, made up of  $729 million in the General Revenue Fund and $80 million in the HB 1017 Education Reform Fund. The leadership agreement involves the following main features for bringing the FY ’10 budget into balance:

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Glimmers of good news in state revenue collections?

by | January 26th, 2010 | Posted in Blog, Budget | Comments (0)

This month’s announcement of December General Revenue collections didn’t seem to provide much in the way of good news. Revenues for the month again came in around 30 percent below levels of one year ago (graph) and 30 percent below the certified estimate upon which this year’s initial budget was developed (see our Budget Hilites for an overview of the state’s budget situation).

GRyr-vs-yr-dec09

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New report looks at impact of Oklahoma’s immigration bill HB 1804

by | January 22nd, 2010 | Posted in Blog, Immigration | Comments (7)

No piece of legislation in Oklahoma in the past decade was more controversial or contentious than HB 1804. Passed in 2007, HB 1804 – officially designated the Oklahoma Taxpayer and Citizen Act – enacted a series of restrictions intended to limit access to jobs and public services for undocumented immigrants and to expand the powers of state and local law enforcement to verify the legal status of those they encounter.

Supporters and critics alike labeled HB 1804 as among “the toughest anti-illegal immigrant bills in the nation”. Supporters fervently hoped, while opponents fervently feared, that passage and implementation of HB 1804 would have a significant effect on the undocumented population of the state, encouraging many to leave the state and deterring others from coming, while making life harder and more precarious for those who remained.

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Cutting budgets AND cutting taxes?

by | January 20th, 2010 | Posted in Blog, Taxes | Comments (0)

Today’s Tulsa World has a strong editorial opposing legislative proposals to enact further restrictions on property taxes.  For those who haven’t been following, this week has seen a public flare-up of a long-simmering internal battle within the House Republican caucus over proposals to tighten the maximum annual tax increase on homestead properties from its current 5 percent cap down to 3 percent or 1 percent.  In Monday’s Tulsa World, Speaker Chris Benge was quoted opposing the proposal:

“I think it is bad timing,” said Benge, R-Tulsa. “We are looking at a very tough budget year. To date, it is about 25 percent or 26 percent below the estimate. We are looking at a very difficult time to fill a budget hole in which we are going to have to cut budgets. We are going to have to use reserves. I just don’t think that the timing is good to reduce revenue.”

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Why government can't be run more like a business

by | January 19th, 2010 | Posted in Blog, Budget | Comments (1)

Last week I attended the Stand Up for Seniors advocacy forum which focused on the impact the state’s worsening economic and fiscal situation is having on programs serving seniors. State Treasurer Scott Meacham was among the elected officials who addressed the gathering. In laying out the budget challenges we are facing and the limited tools at our disposal for mitigating the severity of budget cuts, Treasurer Meacham shared a conversation he had a couple of months back with a friend who expressed frustration at the inability of state government to operate more like a business. Businesses in the downturn are responding by cutting back, reducing expenses and payroll, and simply doing whatever it takes to get through until the economy recovers. Why, asked his friend, can’t state government just do the same?

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Is this state fiscal crisis worse than the 1980's? Yes and no…

by | January 14th, 2010 | Posted in Blog, Budget | Comments (0)

In writing about the state’s current budget woes, I’ve tended to say that Oklahoma is in the midst of its worst fiscal crisis since the oil bust of the 1980’s. Whether we were around during those days or not, I think most of us have a sense that the situation back then was genuinely catastrophic for state finances. So it came as something of a surprise to go back through historical data on state revenue collections and discover the following:

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Tom Joad dances on

by | January 13th, 2010 | Posted in Blog, Poverty & Opportunity | Comments (0)

Kurt Hochenauer, whose OkieFunk: Notes from the Outback blog provides consistently sharp and perceptive commentary on Oklahoma political issues, recently had a nice piece in the Oklahoma Gazette putting the recent rise in poverty in the state in its historical perspective. He notes:

But what’s probably needed more than anything else is for more Oklahomans to realize how poverty is deeply rooted in the state’s history and remains the foundation for so many of the state’s social problems.

Hochenauer cites Robert Lee Maril’s 2000 book Waltzing with the Ghost of Tom Joad, which provided a vivid ethnographic study of  how poverty plays out in the lives of eight Oklahoma families.

If you missed Doc Hoc’s commentary, it’s well worth a read.

It pays to recycle: Lessons from the Budget Crisis

by | January 13th, 2010 | Posted in Blog, Budget | Comments (1)

Just a quick post to let you know that the Oklahoman today ran an op-ed setting out the policy proposals we have developed for managing budget downturns. The op-ed was based on the full issue brief and 1-page summary we released last week, which was in turn based on the series of blog posts that we ran last month looking at forecasting, reserve funds, tax cuts and tax expenditures.  If you haven’t had the chance yet to take a look at what we’re proposing, we hope you’ll check out one of these pieces. No word yet on when our proposals will be released as a major motion picture with Happy Meal (TM)  tie-in.

Say "ow": Next round of Medicaid budget cuts to hit providers

by | January 11th, 2010 | Posted in Blog, Healthcare | Comments (0)

According to an e-mail that went out late last Friday afternoon from Nico Gomez, the Deputy CEO for External Relations and Communications of the Oklahoma Health Care Authority (OHCA), the agency will recommend to its Board this week that it make up for shortfalls in its FY ’10 budget by adopting a cut of 2.5 to 3 percent in the rates it pays all its providers.

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Simply Dismal: Budget gap should spur look at improved forecasting

by | January 8th, 2010 | Posted in Blog, Budget | Comments (0)

Everyone knew it would be bad. Could we have known it would be this bad?  Nearly one year ago, in February of 2009,  several months after the national economic recession finally hit Oklahoma, the Board of Equalization certified an official General Revenue (GR) estimate for the current fiscal year of $5.4 billion.  This amount was half a billion dollars, or 9.5 percent, less than actual revenue collections for the most recently completed fiscal year (FY ’08) and about $300 million less than anticipated collections for the fiscal year in progress.

With the benefit of hindsight, we know now that even those already dreary revenue forecasts were wildly optimistic. Through the first five months of FY ’10, GR collections are running $578 million, or 24.3 percent, below the estimate. In December, the Board of Equalization received a revised FY ’10 estimate that projects that GR for the full year will come in a whopping $1 billion below the estimate (or, to be precise, $1,000,405,068). That equates to an 18.5 percent revenue shortfall– although since the state can appropriate only 95 percent of the certified estimate, the actual mid-year budget shortfall is somewhat less.

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