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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 only 3 legislators said they had opted out of state health insurance after passing a bill that allowed them to do so in exchange for $150 a month. Some 130 lawmakers said they decided to stay on the state health insurance program, including the bill’s author. State Auditor and Inspector Gary Jones criticized the Grand River Dam Authority for “an attitude similar to a corporation rather than a governmental entity regarding expenditures,” citing wasteful spending and overpaying of the CEO. The Tulsa World reports on a study showing that numerous Fortune 500 corporations have sheltered half or more of their profits from state taxes.
After state budget cuts, Oklahoma district attorneys increasingly relying on a supervision program to pay their office expenses that critics say presents a conflict of interest, lacks accountability and hasn’t demonstrated it has improved public safety. The waiting list has grown significantly for a DHS program that supports caregivers of disabled children, so that it can take as long as 10 years to receive benefits.Economist and UCO business dean Mickey Hepner debunks a report by OCPA and Arthur Laffer that ignores the costs of eliminating the personal income tax.
A DHS court liaison program is providing re-entry and job search support to help ex-felons meet their child support obligations. A legislative proposal to create a state guest worker program for immigrants is getting mixed reviews at the Capitol. Batesline surveys reports of dissatisfaction with Speaker Kris Steele among the Republican House caucus.
The Number of the Day is the percentage growth in year to date total adjusted retail sales in Oklahoma. In today’s Policy Note, The Atlantic Cities discusses new research suggesting that cultural diversity plays a key role in economic growth.
In The News
Few Oklahoma legislators opt out of state health insurance
A bill originally designed to allow legislators to opt out of the state health insurance program and save the state money has resulted in only a handful actually doing so. Only three legislators – all of whom are retired military employees who are eligible for federal insurance coverage – said they had opted out. Three lawmakers refused to answer the question and 11 never responded to multiple requests for information over a two-week period. Some 130 lawmakers said they decided to stay on the state health insurance program. Among those who did not opt out was Rep. Dustin Roberts, R-Durant, the bill’s author. Last week Roberts said he didn’t actually opt out because his plan had been to go onto his wife’s health insurance, but that she lost her insurance when she was laid off.
Read more from The Tulsa World.
State Auditor blasts Grand River Dam Authority’s “corporate mentality”
A state auditor and inspector’s performance audit criticizes the Grand River Dam Authority for “an attitude similar to a corporation rather than a governmental entity regarding expenditures” but produced no bombshell revelations upon its release Thursday. “I think the mindset was, ‘Because we don’t get appropriations, we can have more of a corporate mentality,’ ” said Auditor and Inspector Gary Jones. “But they still have to follow the rules.” The report was particularly critical of the GRDA board. It cited the attendance records of some directors as an indicator that insufficient attention was being paid to the state-owned utility’s operations. About two-thirds of the 84-page report is an Oklahoma City University analysis of the feasibility of selling or otherwise monetizing GRDA assets. It does not encourage doing so. Jones said perhaps the most damaging finding is that former GRDA Chairman David Chernicky voted on $5.2 million worth of vendor contracts that went to a company headed by his brother-in-law.
Read more from The Tulsa World.
Corporations in race to the bottom in taxes owed
Oklahoma and every state that struggled mightily through recent recessionary times, might have had a far easier time had major corporations paid their fair share of state income taxes. But they did not, and that tax avoidance cost states an estimated $42 billion over three years, according to a new report, “Corporate Tax Dodging in the Fifty States, 2008-2010.” The report is a product of the Washington-D.C.-based Institute on Taxation and Economic Policy and Citizens for Tax Justice in conjunction with the Oklahoma Policy Institute. This crucial analysis, which probably will be roundly ignored by state leaders, arrives at a time when state governments are trying to repair damage from years of layoffs and cutbacks in services.
Read more from The Tulsa World.
District Attorney supervision program called conflict of interest
District attorneys throughout Oklahoma are scrambling to pay their office bills by relying increasingly on a supervision program that critics say presents a conflict of interest, lacks accountability and hasn’t demonstrated it has improved public safety. Under the District Attorney Supervision Program, about 38,000 offenders each pay an average of $40 a month on top of court costs. In fiscal year 2012, district attorneys are expected to generate about $14 million in revenue — almost 20 percent of their budget — by supervising an estimated 27,600 people on misdemeanor cases and about 10,500 on felony cases. “Philosophically, I don’t believe that an entity that is prosecuting the individual should be supervising the individual,” sadi Bob Ravitz, Oklahoma County public defender. “When you have the DA supervising, they’re the ones who decide to file charges or not. They have a vested financial interest if that person is convicted or not and put on probation.” Prosecutors say they need the program to keep their offices afloat because of budget cuts and a drop in revenue from the bogus check fund. In the past three years, the state has cut funding to prosecutors by about 24 percent.
With waiting list for support growing, parents of disabled struggle to meet needs
Tulsa-area parents of disabled children told a group of lawmakers Friday how they struggle to pay for essentials such as diapers and food. As part of a legislative effort to reform the Oklahoma Department of Human Services, a group of elected officials attended a meeting the Developmental Disabilities Services Division regularly holds to give updates on the waiting list for services. In November, about 6,400 Oklahomans were on a waiting list to obtain services, which help families afford to care for physically and developmentally disabled people in their homes. The waiting list has grown significantly as institutions have closed, opting for in-home or smaller community residential care. It can take up to 10 years to get moved off the list. “I had two sons on the waiting list, but one died before he could be moved off the list,” said one mother.
Read more from The Tulsa World.
State income tax no simple debate
Just how important is it to the Oklahoma economy for policymakers to eliminate the state’s personal income tax? While some in powerful circles are arguing that such a move is crucial, the economic evidence pretty clearly indicates otherwise despite what a recent report suggests. Currently, the anti-income tax groups are marshaling their forces to launch a repeal of the state’s personal income tax. In the past few months the Governor’s Task Force on economic development recommended a 10-year phase-out of the personal income tax. Meanwhile, all indications are that a legislative task force on comprehensive tax reform is poised to make a similar recommendation despite the warning of several state economists who were called to testify (including me). Not surprisingly, the conservative Oklahoma Council of Public Affairs recently released a report from a national (conservative) research firm — Arduin, Laffer, and Moore Econometrics — who argue that the Oklahoma economy would “soar if the proposed economic plan were implemented.” The OCPA study focuses mainly (almost exclusively) on the benefits while ignoring the costs of eliminating the personal income tax. Consequently, some fundamental (perhaps even elementary) concerns go unaddressed.
Read more from The Edmond Sun.
Program helping ex-felons meet child support obligations
Jemal Rawlings spent two years in prison on a drug trafficking conviction, was released in 2009 and is completing his parole this month. Even though he swore off drugs and his once wild lifestyle, he was at risk of more incarceration because he was not paying child support. “When you come out of prison, you are facing a lot of issues like housing and transportation,” he said. “Plus, you’re a felon, and it’s hard to find work. And you’ve got to pay child support and the court fees you owe.” Rawlings found minimum-wage work at labor jobs but kept falling behind and missing payments. After spending a weekend in jail in January 2010 for contempt, the judge referred Rawlings to a DHS court liaison. DHS started adding court liaisons to its child support enforcement divisions about four years ago to help clients with community resources for landing a job.
Read more from The Tulsa World.
Guest worker plan draws mixed reviews at capitol
A legislative proposal to create a state guest worker program for illegal immigrants is getting mixed reviews at the Capitol. While some applaud Sen. Harry Coates, R-Seminole, for authoring it, many say it won’t secure passage. “I will probably support it,” said Sen. Judy Eason McIntyre, D-Tulsa. “Now, will it go anywhere? I don’t think so.” Coates earlier this month filed Senate Bill 995, which would allow illegal immigrants who meet certain conditions to work in the state. Coates said the reaction from the general public has been negative, but those in the contracting industry support it because they are having trouble filling positions.
Read more from The Tulsa World.
Oklahoma Republican House Caucus in tumult; will we see a repeat of the ’89 ouster of a Speaker?
Mike McCarville has two stories from the State Capitol about dissatisfaction among rank-and-file Republican members of the Oklahoma House of Representatives with the way Speaker Kris Steele is using (or abusing) his power. Steele has one year remaining as speaker. Republicans have already picked T. W. Shannon to succeed Steele in 2013; they rejected Steele’s anointed successor, Jeff Hickman. Back in early November, Steele removed Broken Arrow Rep. John Trebilcock from his chairmanship of the Energy and Utility Regulation Committee. Trebilcock wrote on Facebook on November 4: “This is unacceptable Pay to Play trading of votes and punishing members for voting their conscience. Extremely saddened that someone i once considered a friend has let his office diminish him as a person.” The Republican caucus’s retreat in Shawnee this week would have been the opportunity for members to air these sorts of concerns, but instead it’s reported that Steele filled the meetings with presentations and position papers, limiting any opportunity for discussion to the tail end of the retreat.
Quote of the Day
I’ve never had any of my clients tell me there was any degree of supervision other than taking their checks.
–Allen Smallwood, past president of the Oklahoma Bar Association, on a program that allows Oklahoma DAs to collect monthly fees for supervision of probationers, which some are calling a conflict of interest.
Number of the Day
3.4 percent
Percentage growth in year to date total adjusted retail sales in Oklahoma, compared to 2010
Source: Center for Economic and Management Research via OESC
See previous Numbers of the Day here.
Policy Note
How diversity leads to economic growth
Economic growth and development has long been seen to turn on natural resources, technological innovation and human capital. But a growing number of studies, including my own research, suggest that geographic proximity and cultural diversity—a place’s openness to different cultures, religions, sexual orientations—also play key roles in economic growth. Skeptics counter that diverse populations flock to certain locations because they are either rich already or are fast becoming that way. An important new study by economists Quamrul Ashraf of Williams College and Oded Galor of Brown University should help put many of the skeptics’ claims to rest. “Cultural Diversity, Geographical Isolation and the Origin of the Wealth of Nations,” recently released as a working paper by the National Bureau of Economic Research, charts the role of geographic isolation, proximity and cultural diversity on economic development from pre-industrial times to the modern era. To put it in plain English: diversity spurs economic development and homogeneity slows it down.
Read more from The Atlantic Cities.
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