In dispute between Republican leaders over DHS funding, here are the facts

It’s been an eventful week for the Oklahoma Legislature, especially considering they are not even in session. The week began with House Speaker Charles McCall and Majority Leader Mike Sanders blasting the Oklahoma Department of Human Services for making cuts to services for seniors, foster families, and in-home support for people with developmental disabilities. Three days later, three Republican legislators, including House Appropriations and Budget Chair Leslie Osborn, spoke out in defense of the agency, laying out why the cuts could not have been avoided given insufficient funding to cope with rising needs. The next day, Speaker McCall removed Osborn from her position as Appropriations and Budget committee chair.

Although the Speaker’s office said Rep. Osborn’s public disagreement was “absolutely not” the reason for her ouster, they gave no other reason for the decision, and the timing makes it hard to believe it was unrelated. While we don’t know what internal politics of the House Republican caucus may have contributed to these events, we can look at the facts of the dispute over the DHS cuts.

Speaker McCall’s initial press release stated, “DHS received a $53 million increase in the state appropriations for Fiscal Year 2018” and “the agency owes taxpayers an explanation for why it could afford the programs last year but cannot this year after receiving a large increase in funding.” In fact, the Oklahoma Department of Human Services was appropriated about $48.4 million more than their initial appropriation in FY 2017, but that leaves out an important fact. The initial FY 17 funding level was never enough to operate at-home care programs for seniors and people with disabilities for the full year, which is why the agency needed a supplemental appropriation to maintain those programs through FY 2017. Compared to their final FY 2017 funding after that supplemental (as well as mid-year budget cuts that affected DHS and most other state agencies), the increase in FY 2018 was only $18.6 million, or 2.7 percent.

 So why wasn’t that 2.7 percent increase enough to maintain all of their core services? Back in March, DHS Director Ed Lake explained in detail that flat or near-flat funding would result in cuts because the agency faced increasing expenses and declines in other revenues. The Department has received an overall appropriations increase over the past five years, but all of that increase and more has been devoted to funding court-ordered improvements to Oklahoma’s child welfare system. Outside of child welfare, the agency operates programs to care for and help with the basic economic needs of very poor families with children, fragile seniors, and people with disabilities. For years, spending by the agency on all of these other needs combined has been flat, not keeping up with inflation or other added costs, and nearly all of the growth in revenue to the agency has gone to child welfare. DHS has cut administrative expenses and reduced staffing to avoid the most direct harm to programs for these highly vulnerable populations, but those relatively easier cuts were already made years ago. The agency is left choosing between terrible and more terrible options.

Another headwind for DHS has been a drop in federal funds due to Oklahoma’s declining federal matching rate for Medicaid services. This match, known as the FMAP, is determined by a formula that considers a state’s per capita income in relation to national per capita income. The formula is meant to provide a higher match in those states where residents have lower incomes and reduce federal funds when residents’ income goes up compared to the nation. Oklahoma’s FMAP has fallen significantly in recent years because our state’s per capita income growth has been strong. The catch is that our economy has continued to leave out a high percentage of families living in poverty, so need has not decreased, and the state has repeatedly cut income taxes and so given away much of the new revenues that rising income could provide.

Another criticism of how DHS handled budget cuts came from House Majority Leader Mike Sanders, who sent out a press release soon after Speaker McCall. While implicitly acknowledging that DHS needed to make cuts of some kind, Sanders took issue with what the agency chose to cut in this round. Sanders wrote, “Yet, the Legislature did not make these cuts. We do not line item agency spending. Instead we trust our agency heads to be able to make the best decisions about what programs should be spared during tough budget times. These are the times when you forego the wish-list items but you still provide for the most vulnerable.”

In particular, Rep. Sanders said he would have preferred DHS cut the 2-1-1 service, a hotline that connects Oklahomans in need with information about where to find services like homeless shelters, mental health treatment, and emergency care. This hotline often provides life-saving information at some of the worst times in people’s lives. But if Rep. Sanders and other members of the legislature really did prefer that DHS cut 2-1-1 instead of what they chose to cut, they could have provided that guidance in legislation.

Back in years when the Legislature was providing new funding to agencies, they certainly did not hesitate to line-item how that funding should be used. It’s only now that they are passing year after year of austerity budgets that they’ve decided to leave out the details of what should be cut and try to shift blame onto agencies when those cuts prove to be unpopular.

[UPDATE: DHS zeroed out its funding for 2-1-1 last year, and funding was not restored this year. Rep. Sanders is calling for the agency to cut funding that has already been cut.]

Oklahoma’s legislative leaders owe it to the people who elected them to take responsibility for their actions, not try to shift the blame to agencies that can only work with what they’re provided. Representatives Osborn, Sears, and Ownbey bravely spoke up to shed light on the truth about hard decisions that they made as legislators. Speaker McCall’s reaction makes it appear that he is more interested in punishing dissent and passing the buck than coming clean with the people of Oklahoma.