OKPOLICY.ORG
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 Governor Fallin is hosting a breakfast this morning with House Republicans as a last-ditch effort to urge them to vote for a tax cut bill that appears to be losing support. The Oklahoman writes that the bill would hike taxes most on middle-class families with children who make up the Republican base. The OK Policy Blog explains how different Oklahoma families would fare under the plan.
Public schools leaders across the state are scrambling to figure out what teachers and programs they will be forced to cut with no new funds for education, and educators are promising to take their anger to the polls. OK Policy shares a chart showing how support for schools has fallen as enrollment rises. An attempt to disapprove rules for an A-F grading system for public schools failed in the House.
The statewide child abuse and neglect reporting hotline has had wait times of up to an hour before a worker could take some calls. DHS commissioners are renewing their search for a new director by hiring a search firm, though two applicants from the initial search remain in the running. Tulsa Superintendent Keith Ballard plans to leave in mid-2013 and is calling on the school board to start the search for his successor.
Committees approved sending bond issues for the state Capitol complex, American Indian Cultural Center, and OKPOP museum to the full Legislature. The budget bill will end the EDGE program, which awards grants to hi-tech startups, by transferring its funds to the state higher education budget to be used as matching funds for endowed chairs. A bill to abolish the pet breeders board and transfer its responsibilities to the Oklahoma Department of Agriculture has been sent to Governor Fallin.
A judge will hear a lawsuit this week seeking to stop Chesapeake from selling of any its assets without first getting the approval of an independent third party. Forbes tries to figure out how much Chesapeake is really worth. The Number of the Day is the percentage of teens in Oklahoma that do not attend school and do not work. In today’s Policy Note, the Center on Budget and Policy Priorities describes the Kansas tax cut bill that may be the most fiscally irresponsible and economically damaging piece of legislation to emerge from a state in many years.
In The News
Fallin making last-ditch effort to pass tax cut bill
Gov. Mary Fallin is hosting a breakfast Wednesday for House Republicans as a last-ditch effort to urge them to vote for a bill that would cut the state’s top personal income tax rate from 5.25 percent to 4.8 percent. A vote on House Bill 3061, which contains the income tax-cutting language, is expected Wednesday in the House of Representatives. Support for the plan continued to deteriorate Tuesday among House Republicans. One House member said he planned to vote against HB 3061 because it would result in a tax increase for him and his family. Under the plan, married couples with four children who itemize with a federal adjusted gross income of $70,000 to $80,000 would see a tax increase of about $200. Married couples with two children who itemize with an income of $70,000 to $80,000 would see a tax increase of about $100. A married couple with a joint income of $70,000 a year could no longer claim personal exemptions and the loss of the exemptions and other benefits total more than they would be taxed at a lower rate. At least 40 percent of those with a federal adjusted gross income between $8,000 and $25,999 would have an increased tax burden next year under the proposed plan, according to estimates prepared by the Oklahoma Tax Commission.
Read more from The Tulsa World.
Republican base takes a hit with GOP-backed tax cut
Republicans usually claim the mantle of the “family friendly” political party through support for traditional values and policies that benefit parents with young children. That reputation may take a hit thanks to the GOP tax-cut plan. The plan includes both a rate reduction and the loss of some middle-class tax breaks. When it was announced, many questioned if the plan would actually benefit most Oklahoma citizens. The Oklahoma Policy Institute predicts itemizing families with children and incomes between $70,000 and $100,000 “are likely to fare worst” under the plan. That’s a category that could include a married couple with children where both parents work as teachers. It’s hardly the realm of those living a life of “idle wealth.” OK Policy’s conclusion is reinforced by other projections. Taking typical middle-class scenarios and applying the proposed tax structure, some have estimated middle-class families with children who itemize could see a tax increase of as much as $200. Obviously, not everyone itemizes. But parents with children and a mortgage who tithe to their church often do. Those families — otherwise known as the Republican base — appear likely to take a hit under this plan.
See also: Tax cuts for some, tax hike for others from the OK Policy Blog
Educators angry with OK lawmakers promise to take frustration to the polls
One day after Oklahoma lawmakers agree on next year’s $6.8 billion dollar budget , public schools leaders across the state are scrambling to figure out what teachers and programs they will be forced to cut. Legislators turned down school leaders requests for an extra $50 million dollars to save teaching positions. State leaders settled on a flat budget, with increases for DHS, ODOT and the Department of Corrections. Gov. Mary Fallin called the budget “fiscally conservative” with increases to core services. Tulsa Public Schools Superintendent Keith Ballard said legislators have failed kids in public schools. “I’m very disappointed in the action I’m disappointed in the rhetoric that has followed that,” he said. “Don’t say there’s a support for core services or support for education because there’s not. ” Ballard is promising to “do everything possible even in an unconventional way to try and find those allocations.”
See also: Graph of the day: State support for schools has fallen while enrollment rises from the OK Policy Blog
Lawmaker’s bid to disapprove grading system for public schools fails
An attempt to disapprove rules for an A-F grading system for public schools failed Tuesday in the state House of Representatives. Rep. Mike Shelton told House members he has heard from parents, teachers and school superintendents who are unhappy with the grading system. Shelton, D-Oklahoma City, tried to get members to reject a conference committee report on a bill dealing with student scores and send the measure back so conference committee members could add language that would reject the public school grading system developed by the state Education Department. Shelton’s attempt failed when House members voted 44-29 to adopt the conference committee report. The House later voted 76-14 to pass House Bill 2494.
Wait times targeted on DHS hotline
Child-welfare workers are fixing problems with long wait times for a reporting hotline and have handled a record number of cases in the last year, officials said during a DHS oversight commission meeting Tuesday. Commissioners with the Oklahoma Department of Human Services Oversight Commission also were told about three national child advocacy groups defending Oklahoma lawmakers in their efforts to open more child-welfare records. The statewide child abuse and neglect reporting hotline had wait times of up to an hour before a worker could take some calls, officials said. The hotline has been overwhelmed with calls, but about 35 percent are non-child welfare calls, said spokeswoman Sheree Powell. “People are calling looking for services in other areas of DHS, but that pushes the child abuse and neglect calls back,” Powell said. “Workers are having a difficult time getting to the calls.”
Read more from The Tulsa World.
DHS plans to hire search firm to help find new director
DHS commissioners are renewing their search for a new director. The Oklahoma Department of Human Services this time will hire a professional executive personnel search firm to identify qualified candidates for the job, commissioners said Tuesday. The agency had conducted the first search on its own. It got more than 50 applicants. Commissioners narrowed that group to two, Eric Bost, a former U.S. ambassador to South Africa, and Ed Lake, a retired deputy commissioner of the Department of Human Services in Tennessee. Commissioners and Gov. Mary Fallin interviewed the men earlier this month. Both apparently are still being seriously considered for the job. The commissioners originally had hoped to have chosen a new director by July 1. That goal seems unlikely now that a new search will be conducted.
Ballard urges TPS to start search for his successor as superintendent
Tulsa Superintendent Keith Ballard is calling on the school board to start the search for his successor now that the district has lost a top administrator to a suburban school district. Ballard’s contract expires June 30, 2013, and he has made no secret of his intention to end his leave of absence as a professor in the educational leadership program at the University of Oklahoma-Tulsa at that time. “I always said I would only stay three to five years, and next year will be my fifth year,” Ballard told the Tulsa World on Tuesday. “Two years ago, I informed the board that I would only accept a two-year contract (extension), affirming that I would only stay another two years. The board should start thinking about what they’re going to do. I would encourage them to get started as soon as possible.”
Read more from The Tulsa World.
Panel approves bonds for state Capitol, American Indian Cultural Center, OKPOP museum
Two legislative panels on Tuesday approved $20 million in bond funding for OKPOP, a proposed popular-culture museum in downtown Tulsa. Two other bond issues – $200 million for repairs to the state Capitol complex and $40 million to fund completion of the Native American Cultural Center in Oklahoma City – also got initial legislative approval from House and Senate committees. All three measures now go to the full House and Senate for consideration. Senate President Pro Tem Brian Bingman, R-Sapulpa, said the $20 million for the Tulsa project is all the state funding the project will receive. Senate Democrats had said they wouldn’t vote for any bond issues if the Legislature cut state income taxes, but Democrats were among those signing off on moving the bill to the full Senate on Tuesday. Senate Majority Leader Sean Burrage, D-Claremore, said a tax cut is in some doubt at this point, and Democrats didn’t want to prevent the measure from being considered.
Read more from The Tulsa World.
Oklahoma budget kills EDGE program
Oklahoma’s research and innovation sector suffered a serious setback Tuesday, many industry observers believe. A $6.8 billion budget bill passed by the General Conference Committee and heading to the full Senate and House for consideration would eliminate a five-year program that funds start-up high-tech companies in the state. Senate Bill 1969 among other things calls for an end to the Economic Development Generating Excellence (EDGE) Fund, transferring its $161 million in principal to the state higher education budget to be used to match a backlog of privately funded endowed chairs with state funds. Most of the endowed chairs are at the University of Oklahoma and Oklahoma State University. Many chairs support similar high-tech research projects, including some that can be commercialized, a spokesman from Gov. Mary Fallin’s office said. EDGE has awarded about $29.4 million in grants to 17 startups, using only the principal of a $150 million endowment the Legislature established in 2007, said Paul Risser, EDGE Fund Policy Board executive director.
Bill seeking to abolish Oklahoma’s pet breeders board goes to Fallin
The Senate on Tuesday sent Gov. Mary Fallin a bill that would alter how the state regulates commercial pet breeders. House Bill 2921 would abolish the Commercial Pet Breeders Board and transfer its responsibilities to the Oklahoma Department of Agriculture. The measure, which passed by a vote of 34-9 with no debate, would apply to breeders who have 11 or more female cats or dogs capable of reproducing. Sen. Josh Brecheen, R-Coalgate, said the measure was a compromise with concessions from both sides. One sticking point was the size of cages, he said. “That was one of the biggest issues according to breeders,” said Brecheen, the bill’s Senate sponsor. “The cage-size issue made a lot in the business who were trying to do what was right not want to be in compliance. For years, USDA standards for cage sizes have been sufficient.” The measure states that any breeder who applies for a license no later than Sept. 1 will not be required to meet cage-size requirements more stringent than U.S. Department of Agriculture standards. After Sept. 1, the state Department of Agriculture would promulgate rules regarding cage sizes that would apply to everyone, excluding those who were grandfathered in, Brecheen said.
Read more from The Tulsa World.
Lawsuit aims to stop Chesapeake asset sales
Shareholder demands on embattled Chesapeake Energy continue to mount. Later this week a judge will hear a motion to essentially stop Chesapeake and CEO Aubrey McClendon from moving forward with a key component of its business strategy. The lawsuit, Lutzker vs. Chesapeake, alleges that McClendon’s personal business dealings put him “at odds with shareholders and threaten to destroy the Company he once built.” The suit requests the Court grant a temporary restraining order, preventing Chesapeake from selling of any its assets without first getting the approval of an independent third party. Chesapeake executives have made clear that they hope to raise about $10 billion through the sale of various assets this year. Those funds are seen by industry analysts as being critical to the company’s ability to meet promised debt payments, and also to help finance an increasingly aggressive liquids drilling program.
How much is Chesapeake Energy really worth?
Chesapeake Energy came out with a new investors presentation today. Then they quickly replaced it. The first slide of the first version was a call for sympathy and steadfastness: “During the past five weeks CHK has withstood an unprecendented negative media campaign,” it says. “While damaging in the short run to our reputation, these attacks have failed, and will continue to fail, to reduce the value of the company’s assets and our long-term attractiveness to investors. At the end of the day, asset value and quality will win and today’s shareholders should be well rewarded.” The second version of the presentation omitted this page entirely. They took down the original. That said, the original version was right about a couple things. The media campaign has been withering and has damaged Chesapeake’s reputation. The rest is yet to be seen. The presentation repackaged a lot of what we already know about the company. Great assets, massive leverage and high sensitivity to natural gas prices. More than anything else, the company strove to get across the point that the value of its 6.2 million acres of oil and liquids-rich fields more than balances out its mounting liabilities, including $13.2 billion in debt. So with that in mind, let’s try to get at a question that’s been on everybody’s mind regarding Chesapeake: how much is this company really worth?
Quote of the Day
For months, lawmakers said their study of the tax code identified “tax giveaways” for “special interests.” Who knew they were talking about the personal exemption and families with children?
–The Oklahoman Editorial Board
Number of the Day
10 percent
Percentage of teens in Oklahoma that do not attend school and do not work, the national average is 8 percent, 2008
Source: The Children’s Partnership
See previous Numbers of the Day here.
Policy Note
Kansas’ big and damaging tax cut
Kansas Governor Sam Brownback is poised to sign what may be the most fiscally irresponsible and economically damaging piece of legislation to emerge from a state in many years. The bill is estimated to cut more than $800 million — or 13 percent — per year from the state’s general fund. That’s Kansas’ primary source of funding for schools, health care, and other services essential for prosperity and growth. That $800 million per year is way more than Kansas can afford. The legislature’s own research arm says that if Brownback signs the bill, starting in 2014, revenues will fall far short of what it would cost to maintain funding for schools, health care, and other state services at current levels — current levels that already reflect several years of recession-induced budget cuts. So where’s that money going? First, it will pay for massive income tax cuts for wealthy individuals and profitable corporations. That’s not all. Taxes on low-income seniors and working families will rise as a direct result of this bill, because it repeals two key programs – a rebate for grocery sales taxes and a property tax relief program for renters. The average low-income Kansas household will pay an additional $148 per year in taxes under this bill. The wealthiest 1 percent of Kansas households will receive average tax cuts of $21,087 per year.
Read more from the Center on Budget and Policy Priorities.
You can sign up here to receive In The Know by e-mail.
One thought on “In The Know: Fallin making last-ditch effort to pass tax cut bill”