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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 exemptions to the state Open Records Act combined with lax enforcement and underfunded ethics agencies are hampering Oklahomans’ ability to see what is happening in their government. State Treasurer Ken Miller said for lawmakers to be responsible, they need to pay for tax cuts on the front end, not base them on “presumed revenue growth.” A letter to NewsOK points out that states with high “business climate” rankings due to low tax rates aren’t actually attracting more economic activity.
Lawmakers still have no agreement on what a plan to cut the state income tax would look like. OK Policy updated our side by side comparison of the major tax proposals to reflect the bills that passed on the House and Senate floors.
Recent slashes in publicly funded treatment centers mean that few beds are available for those seeking help for addiction. Private treatment programs for substance abuse are frequently inaccessible because insurance companies will not cover the needed care. The Tulsa World contrasts Gov. Fallin’s call for increasing the number of college graduates with her moves to cut funding to higher education.
The Oklahoma City emergency children’s shelter will remain open after DHS presented a plan to reduce overcrowding, which includes sending children to a private residential facility and to the agency that houses juvenile offenders. Broken Arrow and several other Tulsa-area cities have declined membership in the Oklahoma Municipal League this year, citing a low return on their investment.
The Number of the Day is the proportion of Oklahoma adults under correctional control. In today’s Policy Note, economist Christina Romer surveys the research showing that most tax rate changes have very little effect on the economy.
In The News
Oklahoma is not as open as advertised
The state seal of Oklahoma was smuggled out of Guthrie, the original capital, in the dark of night, hidden in some dirty laundry. The clandestine operation on June 12, 1910, moved the state capital to Oklahoma City and set the state on a path that it remains on today when it comes to openness. Oklahoma has a populist streak in principle but power often remains tightly held in the hands of a few who prefer doing the public’s business in the dark. While Oklahoma has an inclusive open records law, a variety of forces have been chipping away at the public’s right to know in recent years. Exemptions to the state Open Records Act have combined with lax enforcement and underfunded ethics agencies to create a recipe for corruption and a public less informed about its government.
Read more from The Tulsa World.
State Treasurer urges caution in cutting state income tax rate
Reality will have to replace rhetoric when legislative leaders and the governor’s office meet to develop a proposal to reduce the state’s personal income tax, state Treasurer Ken Miller says. “To responsibly finance tax cuts, the Legislature should eliminate one dollar of spending or credits for every one dollar cut in taxes,” said Miller, who served four years as a state House of Representatives budget chairman before being elected treasurer in 2010. “They need to pay for the tax cut on the front end, not on presumed revenue growth in the future.” Three of the four tax-cutting bills depend on increased state revenue to occur because of the lower income tax rates. “We have to be very careful,” Miller said. “As state treasurer, I feel one of my tasks is to safeguard the financial house of the state by promoting sound fiscal policy. I want to make sure that we don’t get into a situation of a structural imbalance.”
See also: LETTER: Business activity may not increase if state income tax is eliminated from NewsOK
No tax agreement yet
Oklahoma lawmakers passed a key deadline and passed hundreds of bills from the floor, but still have no agreement on the most far-reaching policy issue this legislative session — a plan to cut the state income tax. There are four major proposals that have passed the House or Senate to either slash or completely eliminate the state’s personal income tax, although leaders of the Republican-controlled Legislature acknowledge there is no consensus on what the final product may look like. While Steele is optimistic there will be a “significant” reduction in the income tax, it’s become apparent a steep cut will be difficult to achieve this year, especially as opposition is mounting to the elimination of dozens of exemptions, deductions and tax breaks that would be needed to offset the lost revenue. Republicans already have caved to pressure from groups representing seniors to restore tax deductions for things like retirement and Social Security income, and lobbyists that represent industries receiving tax breaks also have been working to keep those intact. Meanwhile, little progress has been made on crafting a budget for the upcoming fiscal year that begins July 1, because any tax cut will significantly reduce how much revenue lawmakers have to spend.
Read more from the Enid News and Eagle.
See also: Side by side comparison of major tax proposals from OK Policy
Substance abuse programs struggle to keep up with huge demand for services
Recent slashes in publicly funded treatment centers meant that few beds were available when Lindsey Arias finally worked up the courage to seek help for her addiction. Arias is one of thousands of Oklahomans with little or no health insurance asking for an intervention in her prescription painkiller addiction but finding few options. As Oklahoma tops the nation in nonmedical use of prescription painkillers and remains high in meth and alcohol addiction, the state agency charged with addressing those problems has had to deal with severe budget cuts. When residents without health insurance ask for help, many are forced to wait nearly six months, leading to dire results. Since 2009, funding to the agency has been cut by 11 percent – from $326.3 million to $289.8 million.
Read more from this Tulsa World.
Insurance is a major obstacle for those seeking private treatment programs in Oklahoma
Private treatment programs for substance abuse have the potential to be more successful than their state-run counterparts, but some say there’s a massive obstacle sitting in the way. Charles Joseph Shaw, a medical doctor who deals exclusively with addicts, says insurance companies rarely cover extended stays in substance abuse treatment programs. The problem with that, Shaw says, is that longer stays in treatment result in higher rates of success. “There’s no question,” he said. “The longer you stay the better.” Shaw, who has treated more than 100,000 drug addicts and alcoholics over the past 23 years, has his own practice in Oklahoma City and also works at a major hospital. He says most of the patients he sees are struggling with addiction to opiates, and they seem to be getting younger and younger. Some insurance companies won’t pay for opiate abuse treatment, Shaw said. “And I’m talking about good insurance companies, but that’s their policy,” he said.
Read more from Oklahoma Watch.
Higher education facing world of hurt
Last fall, Gov. Mary Fallin, to her credit, announced an initiative to increase the number of college graduates produced in Oklahoma to 50,900 annually by 2023. That’s a 67 percent increase over the 30,500 degrees and certificates state institutions currently issue each year. About 22 percent of Oklahomans have degrees, but the national average is almost 6 percentage points higher. But how exactly does she expect an increase of 20,400 more graduates annually by 2023 as long as higher education repeatedly plays the role of legislative slasher victim? Last session, lawmakers cut higher ed by 5.8 percent. Oklahoma reportedly ranked 12th in the nation in such cuts. When federal stimulus money was excluded, state funding declined by 9.6 percent from fiscal 2011 to FY 2012. Meanwhile, more than 16,000 students were added to the system over the past two years. But let’s return to the initiative Fallin is backing, which would unfold over the next 10 years. Is that the same 10 years that the state income tax would be gradually eliminated under legislation that is shooting through the Legislature, and which Fallin champions?
Read more from The Tulsa World.
Agreements allow DHS children’s center in Oklahoma City to remain open
A request to revoke the license of a DHS-operated shelter for abused and neglected children has been rejected — at least for now. Persistent overcrowding problems at the Pauline E. Mayer Children’s Shelter in Oklahoma City prompted a state fire marshal’s agent to issue a report Feb. 28 recommending that the shelter be closed if those problems weren’t quickly resolved. DHS’s corrective action plan includes a number of changes designed to quicken the placement of children in foster homes, including hiring an additional “shelter expediter” within one to three months and finding a way to complete home studies more quickly. It also included emergency measures to be taken anytime the census reaches 38. If capacity ever is reached, Whitefields, a licensed residential facility in Piedmont, has agreed to house up to 10 male children free of charge, with the caveat that DHS would be responsible for all care including staffing, food, clothing, education and transportation. The Office of Juvenile Affairs, which houses juvenile offenders, has agreed to accept six to eight children from the shelter at a cost of $60 a day, if needed.
Cities decline membership in Municipal League, citing low return on investment
Broken Arrow and several other Tulsa-area cities have declined membership in the Oklahoma Municipal League this year, citing a low return on their investment with the lobbying and training organization. “We’re hoping this joint action by the cities will gain the attention of the Municipal League and perhaps allow it (to change) so that we can go back in the organization next year,” Broken Arrow City Manager David Wooden said. Mayor Mike Lester sent a joint letter to OML President Homer Nicholson, mayor of Ponca City, in December, citing key concerns. Other cities behind the letter were Bixby, Collinsville, Jenks, Owasso, Coweta and Mannford. Wooden said in a report to the City Council that the Municipal League had taken a position on the Police and Fire Arbitration Act last legislative session that conflicted with the positions of its member cities.
Read more from The Tulsa World.
Quote of the Day
When someone comes to ask for treatment, we need it at that time. By the time there is a bed available, we often call and can’t find the person because they have moved on, the person has committed a crime and is sitting in jail or worse – losing them to an overdose or suicide.
–Terri White, director of the Oklahoma Department of Mental Health and Substance Abuse Services
Number of the Day
1 in 42
Number of Oklahoma adults under correctional control, 7th most in the nation in 2007
Source: Pew Center on the States
See previous Numbers of the Day here.
Policy Note
That wishful thinking about tax rates
At least since Calvin Coolidge, politicians have trumpeted the supply-side benefits of cutting marginal income tax rates. Lower rates will unleash economic growth and the cuts will largely pay for themselves — or so it’s often said. This idea was the essence of President Ronald Reagan’s theory of supply-side economics, and his justification for large, permanent tax cuts in the early 1980s. Yet careful studies find little evidence of such effects. History shows that marginal federal income tax rates have varied widely. If you can find a consistent relationship between these fluctuations and sustained economic performance, you’re more creative than I am. Perhaps it’s time to reform tax policy based on facts, not worn-out assumptions.
Read more from The New York Times.
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