In The KnowIn 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 DHS Director Howard Hendrick will step down at the end of February. See Hendrick’s resignation letter here. CapitolBeatOK reported on lawmakers’ reactions to Hendrick’s announcement. Attorney Jerry Fent presented arguments to a Supreme Court referee that the approval the settlement over treatment of children in foster care is unconstitutional. The head of a state school boards group is opposing changing the date of school board elections to coincide with general elections, because it would allow partisan politics to creep into the process.

OK Policy features a guest blog on why fixing America’s crumbling infrastructure should be a top priority for every national, state, and local official throughout the nation. Also on the OK Policy blog, we discuss what the coming federal budget cuts could mean for Oklahoma. Concerns about the impact of further cuts to the income tax dominated a state budget discussion hosted by StateImpact Oklahoma. The next budget panel will be held tonight in OKC.

The Republican Party is continuing a 50 year trend in voter registration gains, with 41.4 percent of voters registering as Republicans compared to 47.2 percent registered as Democrats. Sen. Harry Coates has filed a bill to add the ACT to the list of tests that can be used to meet graduation requirements. A reduction in sentences for certain second-time convictions of marijuana possession is included in legislation intended to cut prison costs.

Natural gas prices have sunk so low that many industry observers say it is not economically feasible to continue drilling for it. Oklahoma has depended on the energy industry for the biggest part of state wage growth in recent years. Urban Tulsa Weekly examines the complexities of changing Oklahoma’s liquor laws.

The Number of the Day is the percentage of ex-offenders released in Oklahoma who were re-incarcerated for technical violations of their probation/parole. In today’s Policy Note, Touchstone examines the austerity curve, or the point at which cutting government spending becomes self-defeating because it lowers growth, depresses tax revenues, and pushes up social security spending by more than the government is cutting.

In The News

DHS Director Howard Hendrick announces retirement

DHS Director Howard Hendrick is retiring, leaving a $162,750-a-year job after public confidence in his leadership plummeted because of child deaths. Hendrick, 57, a former state senator, has served as director of the Oklahoma Department of Human Services for more than 13 years. He oversees more than 7,000 employees and a more than $2 billion budget. Hendrick made his emotional announcement at the monthly meeting of DHS commissioners, who will choose his replacement. He said he will step down from his daily responsibilities Feb. 29. He said he will retire officially after taking vacation time. Hendrick said he could have retired more than a year ago but wanted to stay until a federal class-action lawsuit critical of the state’s foster care system was resolved.

Read more from NewsOK.

See also: Howard Hendrick’s resignation letterHouse leaders react to resignation of Howard Hendrick as DHS director from CapitolBeatOK

Attorney argues DHS settlement unconstitutional

The Oklahoma Supreme Court should declare void an action taken by the Contingency Review Board to approve the settlement of a lawsuit over treatment of children in the Department of Human Services foster care system, attorney Jerry Fent told a referee Wednesday. Fent has successfully challenged the CRB’s participation in funding decisions for the Opportunity Fund and approving certain bonds, as well as parts of a statute requiring the governor to consult with legislative leaders on use of the Quick Action Closing fund. Fent contends that having the House speaker and Senate president pro tempore on the CRB with the governor constitutes a violation of the constitutional separation of powers by involving legislators in executive-branch decisions. In his latest lawsuit, Fent is also challenging a section of the Open Meeting Act that allows legislators to attend executive sessions of state entities. Legislators can coerce agencies or make threats to their appropriations during executive sessions, Fent said.

Read more from 23rd and Lincoln.

Bill to change school board elections draws opposition

Changing the date of school board elections from February to November would allow partisan politics to creep into the process, the head of a state school boards group said Wednesday. “The system we have keeps partisan politics out of school board elections, as they should be,” said Jeff Mills, executive director of the Oklahoma State School Boards Association. His group will oppose legislation that will move school board elections from the second Tuesday in February, he said. Unlike federal, state and county candidates, school board contenders are nonpartisan and don’t run as a Democrat, Republican or independent. Three bills have been filed that call for moving the school board February elections to the November general election date. Rep. Josh Cockroft said the intent of his measure, House Bill 1544, is to increase voter participation.

Read more from NewsOK.

Guest Blog (Doug Hall): America’s infrastructure — ticking time bombs in every state

Later today, I will pass through two of our nation’s airports, where I will see ample evidence suggesting that we collectively place a very high priority on protecting our transportation infrastructure from harm. On my way through security, I will dutifully remove my shoes, and will remove from my pockets such benign items as a marker, an extra paper napkin from lunch, and the keys to my bike lock. Yet throughout this same country, there are nearly 70,000 bridges that the U.S. Department of Transportation has identified as “structurally deficient.” We all recall with horror the 2007 collapse of the bridge in Minneapolis, yet there are thousands of such ticking time bombs throughout America today. In three states — Iowa, Oklahoma, and Pennsylvania — there are over 5,000 bridges deemed to be structurally deficient. While not every one of those bridges is in imminent danger of collapse, these remain alarming numbers. Fixing America’s crumbling infrastructure should be a top priority for every national, state, and local official throughout the nation.

Read more from the OK Policy Blog.

What the coming federal budget cuts could mean for Oklahoma

Election news may soak up a lot of the attention this year, but we shouldn’t lose sight of the major policy changes set to go into effect no matter who wins in November. High among those are the automatic budget cuts that were part of the deal to increase the federal debt ceiling. A brief recap: The Budget Control Act created a supercommittee tasked with finding at least $1.2 trillion in deficit reduction measures. When that group failed to reach an agreement, an automatic budget cutting process called sequestration went into effect. Under sequestration, there will be $1.2 trillion in cuts over the next decade, divided 50/50 between domestic and defense spending. These cuts are scheduled to begin January 2013, with one important caveat. Although the cuts are automatic under existing law, Congress is still free to intervene at any time. Much like with the expiration of the Bush tax cuts, also scheduled for the end of 2012, there is certain to be legislative wrangling. However, President Obama’s promise to veto any attempt to alter the automatic cuts makes it much less likely that they will be stopped.

Read more from the OK Policy Blog.

Impact of tax cuts “feels like a broken promise”

We kicked off our three-city roadshow on the state budget last night, and the Tulsa event couldn’t have gone better. Not surprisingly, the income tax dominated a lot of the conversation — both from the panelists and the forum audience. Several teachers attended the event. One woman felt strongly that even talking about cutting taxes with the current state of education in Oklahoma was “unconscionable.” One man, a social studies teacher at Tulsa’s Booker T. Washington High School who described himself as a “tax cut casualty,” asked whether funding would be restored to a state program that gives National Board Certified teachers a $5,000 annual stipend for 10 years. The stipend program wasn’t included in the Department of Education’s 2012 budget. Losing the stipend was the equivalent to a 12 percent pay cut, the teacher said: “It feels like a broken promise.”

Read more from StateImpact Oklahoma.

See also: State budget roadshow continues tonight in OKC from StateImpact Oklahoma

Oklahoma Republicans continue 50-year gains in voter registration

Oklahoma is getting redder, as the number of registered Democrats in the state continues its 50-year downward slide. The percentage of registered Republicans is at an all-time high at 41.4 percent, according to the latest voter registration figures from the state Election Board. Democrats account for 47.2 percent of registered voters, the lowest in state history. Registered independent voters make up 11.4 percent. The percentage of Democrats in Oklahoma has decreased almost every year since 1960, records show. Democrats then made up 82 percent of the registered voters. Republicans numbered 17.6 percent and independents numbered 0.4 percent.

Read more from NewsOK.

Legislation filed to allow students to use ACT to graduate

Each year, thousands of Oklahoma school students take their end-of-instruction tests in order to be able to graduate. In an effort to help more students get their high school diploma and provide educators with more classroom time for teaching, Sen. Harry Coates has filed Senate Bill 1093. “This bill was requested by school administrators in my districts who say they are required to give so many tests that they don’t have enough time to actually teach,” said Coates, R-Seminole. “Most students, especially those that are college-bound take the ACT so this is a way to allow our teachers more time to focus on their job of educating our youth.” SB 1093 would add the American College Testing Program (ACT) to the list of tests that could be used by students to show mastery of state academic content standards in order to graduate. In order to qualify, test scores would need to fall within the 41 to 100 percentile levels.

Read more from The Shawnee News-Star.

Bill proposes to reduce certain marijuana sentences

Reducing the sentences for certain second-time offenders of marijuana possession and allowing violent offenders to start earning credits toward reducing their sentence after serving 85 percent of their sentence are included in legislation intended to cut prison costs. The measure, House Bill 3052, addresses 10 recommendations from a 20-member group that came up with proposals to reduce violent crime statewide by 10 percent by 2016 and to provide post-prison supervision for all felons while containing growth in prison costs. House Speaker Kris Steele, author of the legislation, said those convicted a second time of a misdemeanor possession of marijuana within a 10-year period would be convicted of a felony and still face a sentence of 2 to 10 years. But the punishment range would be lowered to 1 to 5 years for those convicted of a second offense 10 years or longer after the first conviction.

Read more from NewsOK.

Low natural gas prices cause industry shift

The oil and natural gas industry is thriving, thanks to a dizzying array of technology that helps producers pinpoint new resource plays or reach reserves that could not be extracted just a few years ago. But some of those companies have been undone by basic economics. Natural gas prices have sunk so low that many industry observers say it is not economically feasible to continue drilling for it. Economist Steve Agee said a “perfect storm” of factors — a record amount of gas in storage, rising production and a mild winter for much of the country — led to natural gas prices to crash. He said cutting back on natural gas production is a prudent business decision. Industry giant Chesapeake Energy Corp. on Monday detailed its plans to curtail gas production, but observers say the shift has been under way for quite some time.

Read more from NewsOK.

See also: Energy provides boost for Oklahoma’s recent wage growth from NewsOK

Legislation to allow wine in grocery stores not as simple as it looks

In the past year, legislation to allow wine and stronger beer to be sold in grocery stores has been noisily wending its way through the state legislature. The pros and cons have been dissected, rehashed and analyzed by state senators and casual consumers alike. Mary Stewart is quick to answer the phone at Ranch Acres Wine & Spirits, where she’s been the owner and operator for 30 years. Stewart thinks any changes will probably “hurt the smaller stores more and grocery stores won’t carry the same number of [beers, wines and spirits] that liquor stores do,” she said. Bigger chain stores may buy certain items in bulk, which would lower prices but also limit selection. She’s also concerned that rules and regulations that apply to small liquor stores may not apply to grocery or convenience stores. “We can’t have any refrigeration, we have to be closed on certain holidays,” Stewart said. “It would be so unfair to allow that in another setting.” Under current regulation, you must be a sole proprietor of only one liquor store and an Oklahoma resident for 10 years before you can get a retail liquor license.

Read more from Urban Tulsa Weekly.

Quote of the Day

The system we have keeps partisan politics out of school board elections, as they should be.
Jeff Mills, executive director of the Oklahoma State School Boards Association

Number of the Day

11 percent

Percentage of ex-offenders released in Oklahoma who were re-incarcerated for technical violations of their probation/parole in 2004, up from 3 percent in 1999.

Source: Pew Center on the States

See previous Numbers of the Day here.

Policy Note

Introducing the austerity curve

The Laffer Curve is a concept close to the heart of many economists who advocate lower taxes. Laffer argued that if tax rates were set at zero then tax revenues would clearly also come in at zero, but if taxes were set at 100% then no one would bother working and so tax revenues would again be zero. The key question facing tax policymakers is where about on the curve are tax rates currently. For what it’s worth, the point at which tax rates move to the downward sloping, right-hand side of the curve, appears to be around the 70% mark, so in most cases Laffer analysis suggests that higher rates can indeed raise revenues, despite what the Curve’s usual proponents argue. But I’ve thinking recently about the Laffer Curve not as it relates to tax policy but in terms of how the concept might relate to austerity. That is to say that cutting government spending up to a certain point leads to lower deficits but beyond a certain point, the impact of lower growth and higher unemployment means that deficits get worse as the government cuts more? Like the Laffer Curve it suggests that there is a point at which cutting government spending becomes self-defeating, it simply lowers growth, depresses tax revenues and pushes up social security spending by more than the government is cutting.

Read more from Touchstone.

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