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In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.
Today you should know that Chesapeake’s spending on the Oklahoma City Thunder is being questioned as a conflict of interest since CEO Aubrey McClendon owns a large stake in the team. This Land Press examined what might happen if OKC loses Chesapeake Energy. StateImpact Oklahoma reports on how Oklahoma natural gas producer are trying to reinvent themselves as oil companies.
The Tulsa Chamber and County officials say the $90 million airport tax proposal floated by City Council members should be much larger. A member of the Oklahoma Commission for Human Services was publicly reprimanded for having a conflict of interest because he serves as executive director of a nonprofit that receives DHS subsidies for providing services to low-income children. Commissioner Stephen Dow said his position at Community Action Project was cleared by Governor Henry’s legal staff as not being a conflict before he was appointed.
The OK Policy Blog examines a new report showing it is harder to get ahead in Oklahoma than most other states. NewsOK writes that Oklahoma is overdue for a realistic conversation about how expensive it will be to reach education goals. Governor Fallin signed bills to move pet breeder oversight to the Department of Agriculture and continue allowing state employees to make charitable contributions through payroll deductions. The U.S. Supreme Court rejected an appeal by a man attempting to claim copyright on the phrases “Go Thunder” and “Let’s Go Thunder”.
The Number of the Day is the percentage of student loans in Oklahoma that were delinquent in the 4th quarter of 2011. In today’s Policy Note, Demos examines the hidden costs of 401(k) retirement plans that can consume nearly one-third of investment returns with excessive fees.
In The News
Chesapeake’s ties to Thunder questioned
Chesapeake Energy Corp., whose top executive invested in the Oklahoma City Thunder, almost doubled its spending on the professional basketball team during the past four years buying tickets, luxury box seats and naming rights for the home arena. Chesapeake directors are under pressure to investigate conflicts between Aubrey McClendon’s duties as CEO and his personal finances, which include a 19.2 percent stake in the Thunder. New York City pension funds, which own 1.9 million Chesapeake shares, have complained about the company’s spending on the National Basketball Association squad. While the $8 million expenditure so far this year on the team is less than half of what Chesapeake spends drilling for oil and gas in an average day, it underscores how the company’s board hasn’t always erred on the side of caution while overseeing McClendon’s potential conflicts of interest, some observers say.
Read more from The Tulsa World.
See also: What happens if OKC loses Chesapeake Energy? from This Land Press
Why Oklahoma natural gas producers are reinventing themselves
Low prices, warm weather and abundant production are forcing natural gas companies to refocus on oil. This is an important shift for Oklahoma, an epicenter of the natural gas industry. The Oklahoman ran a great profile of how Oklahoma natural gas companies are trying to reinvent themselves as oil outfits. In many ways, natural gas companies have been “their own worst enemies,” Adam Wilmoth writes: New technology and improved drilling techniques quickly allowed the industry to tap vast natural gas supplies throughout the county, flooding the market and destroying prices.
Read more from StateImpact Oklahoma.
Tulsa Chamber and county officials want larger airport infrastructure plan
The $90 million airport tax proposal floated by City Councilors G.T. Bynum and Blake Ewing falls far short of being able to pay for all of the infrastructure improvements needed, Tulsa Metro Chamber and Tulsa County leaders said Tuesday. The chamber and Tulsa County Commissioner John Smaligo are both pitching a $329 million proposal, but each version would be funded by a different method. Smaligo said Bynum and Ewing’s proposal is “extraordinarily short-sighted and does not come close to making all of the most basic repairs that have been identified.” The Tulsa World revealed last week that a $329 million package is being eyed for the Nov. 6 ballot. It includes $254 million for airport improvements and a $75 million “deal-closing fund” to provide incentives to new businesses.
Read more from The Tulsa World.
Public reprimand issued against Department of Human Services Commissioner
A member of the Oklahoma Commission for Human Services said Tuesday evening he doesn’t plan to step down after being publicly scolded for having a conflict of interest because he serves as executive director of a nonprofit agency that receives payments that include DHS subsidies for providing services to low-income children. The state Ethics Commission issued a public letter of reprimand against Commissioner Steven Dow for serving on the oversight board of the Department of Human Services while also acting as chief executive officer of the Community Action Project in Tulsa. Dow said his unpaid position with the Community Action Project was reviewed by the governor’s legal staff when then-Gov. Brad Henry appointed him to the commission in February 2010. “Gov. Henry’s chief legal counsel investigated the matter and said there was not a violation of the Ethics Commission rules… I abstain from anything that is directly relevant to CAP and will continue that practice so long as I am on the commission and so long as the commission is the governing body (of DHS).”
Harder to get ahead in Oklahoma than most other states
The ‘American Dream’ is pervasive in our collective discourse and consciousness. Rooted in the founding documents and political mythology of the United States, it evokes an ethos of equal opportunity, regardless of one’s social class or original circumstance. It’s an optimistic ideal that people across the country and from all walks of life continue to value today; for millions of Americans however, that dream is more myth than reality. A new study from the Pew Research Center set out to evaluate a core component of the American Dream state by state – are workers climbing the economic ladder over their lifetime? Oklahoma ranked near the bottom among states in terms of the economic mobility of its residents. The Pew study explored the prospects for economic advancement during Oklahomans’ prime working years, between ages 35 and 49. Economic advancement was measured quite simply by a person’s earnings. Basically, did an individual’s earnings increase over time, and if so, by how much? In terms of simple ‘absolute mobility,’ Oklahoma residents had less economic mobility on average than residents of most other states – with the exception of Alabama, Kentucky, Louisiana, South Carolina, and West Virginia.
Read more from the OK Policy Blog.
NewsOK: A tough talk about education funding in Oklahoma is long overdue
Student achievement isn’t nearly at the levels most would like it to be. The state’s been iffy on its promise to teachers who sought national certification. And with all of the education reforms hitting schools, things must change if our students and teachers are going to rise to the challenge. Without realistic conversations about how expensive it will be to reach education goals, it’s difficult to know how much new money schools might need and how much they just need to repurpose. Tulsa schools Superintendent Keith Ballard made a convincing argument when he advocated for $50 million more in school funding because it would mean 75 more teachers. Ballard talked about class sizes and band programs. That’s language people can understand. Those are issues Oklahomans need to be talking about. Parents are already thinking about it.
Governor signs bill to move pet breeder oversight to Department of Agriculture
The state Agriculture, Food and Forestry Department will tackle regulating Oklahoma’s commercial pet breeders after a fledgling agency failed to make much headway in two years. Gov. Mary Fallin on Tuesday signed House Bill 2921, which eliminates the Board of Commercial Pet Breeders and places its duties under the Agriculture Department. The measure takes effect July 1. It applies to breeders who have 11 or more female cats or dogs capable of reproducing. Any commercial pet breeder who has renewed their Commercial Pet Breeders license by July 1 would have the license automatically transferred to the Agriculture Department. No additional fee would be charged for the transfer. Tina Gunter, general counsel for the Agriculture Department, said the agency will write new rules.
Oklahoma state employees may continue using payroll deductions to make charitable contributions
State employees will continue to be able to make charitable contributions through payroll deductions. Gov. Mary Fallin on Tuesday signed House Bill 2714, which extends the life of the Oversight Committee for State Employee Charitable Contributions through July 1, 2016. In 2011, 2,936 state employees contributed $613,157 to the state charitable campaign. The contributions supported programs involving social services, the arts, health services and food pantries. Without the legislation, the committee, made up of seven state employees, would have had to end operations July 1. Its future looked grim earlier this year. A House committee chairman refused to hear a bill that would have extended the committee’s life, saying the charitable contributions committee isn’t an essential state service.
‘Let’s Go Thunder’ copyright claim is rejected by U.S. Supreme Court
The U.S. Supreme Court on Monday declined to hear an appeal from a man who claimed the phrases “Go Thunder” and “Let’s Go Thunder” were protected by copyright because he put them in a song about Oklahoma City’s NBA team. Without comment, the high court rejected the case from Charles A. Syrus, who sued the team’s ownership group and wanted 20 to 30 percent of the team’s “net gross” because the mascot, cheerleaders and fans used the phrases and the team included them on signs. A U.S. district judge in Oklahoma City and a federal appeals court also rejected Syrus’ claims. The 10th U.S. Circuit Court of Appeals said in a November opinion that common phrases aren’t protected by copyright simply because they’re in a song that has copyright registration.
Quote of the Day
The phrases are merely predictable variations on a cheer widely used in sports, that is, ‘Go’ or ‘Let’s Go’ combined with the name of the team for which the cheer is uttered.
–The 10th U.S. Circuit Court of Appeals, in an opinion throwing out a lawsuit by a man who claimed the phrases “Go Thunder” and “Let’s Go Thunder” were protected by copyright because he put them in a song.
Number of the Day
19.4 percent
Percentage of student loans in Oklahoma that were delinquent, compared to 11 percent nationally, in the 4thquarter of 2011.
Source: Federal Reserve Bank of Kansas City
See previous Numbers of the Day here.
Policy Note
The Retirement Savings Drain: Hidden and excessive costs of 401(k)s
Though your retirement or bank accounts statements contain no evidence of it, everyone who has an IRA, 401k, or any other individual retirement savings account pays a variety of fees every year. But because these fees are taken “off the top” of investment returns or share prices accountholders generally have no idea how much all of this is costing them. These fees can be substantial: over a lifetime, fees can cost a median-income two-earner family nearly $155,000 and consume nearly one-third of their investment returns. Worse, these fees are often excessive and financial services companies can get away with charging higher-than-necessary fees for a number of reasons, namely: the savers’ lack of information, the inefficiency of financial markets and individualized investing, and the substantial costs—both in money and time—associated with switching between investment brokers. This brief sheds light on the hidden costs of 401(k)-type individual retirement plans, details the different types of fees paid by the consumers, and uses an example investment from Demos’ own 401(k) plan to illustrate these fees’ heavy burden on the average account-holder.
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