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 firstname.lastname@example.org. You can sign up here to receive In The Know by e-mail.
Today you should know that in an interview with NPR, OKC Mayor Mick Cornett said the city has avoided economic pitfalls by increasing taxes to invest in quality of life. The federal government this week approved Oklahoma’s hospital provider fee, which is expected to raise about $340 million to reimburse certain hospitals for patient care. Sen. Dan Newberry has filed legislation to dedicate a portion of any growth revenue to reducing pension liabilities and bond indebtedness. NewsOK writes that opposing bond issues won’t help Oklahoma’s credit rating.
The OK Policy Blog explains why Arthur Laffer’s tax plan for Oklahoma is like an ice cream diet. OK Policy Director David Blatt interviewed with KWGS about the tax reform task force recommendations. See our earlier blog post here explaining why the plan would increase taxes for a majority of Oklahomans. The newly created House Ethics Committee approved a code of conduct for members and began developing rules. One ethics panel rule would allow disciplinary action against former members.
Bills have been filed in both the House and Senate to make the Legislature subject to the Open Meeting and Open Records acts. Oklahoma bankruptcy filings declined last year, but there were more filed in the state’s Western Federal District, which includes Oklahoma City. Rep. Ben Sherrer filed a bill to prevent employers from misclassifying workers as independent contractors to avoid carrying workers’ compensation insurance, as well as payment of unemployment and other taxes. A report by the American Lung Association gave Oklahoma barely passing grades for tobacco control and prevention, though we were among only four states to receive all passing marks.
The Number of the Day is percentage of working-age Oklahomans with a disability who were employed in 2009. In today’s Policy Note, Businessweek examines the perils of offering corporations tax incentives to relocate.
In The News
How Oklahoma City avoided economic pitfalls
As the Mayor’s Conference takes place in Washington D.C., city governments are dealing with severe problems at home — from high unemployment to funding cuts. Steve Inskeep talks to Mick Cornett, the Mayor of Oklahoma City, about how his city has managed to avoid some of these problems.
Hospital fee gets federal OK
The federal government this week approved Oklahoma’s hospital provider fee, which is expected to raise about $340 million to reimburse certain hospitals for patient care. The Supplemental Hospital Offset Provider Payment was approved by the Legislature last session and signed by the governor in May. It would allow hospitals to assess a 2.5 percent fee on net patient revenue. The hospitals are not allowed to pass the cost along to patients. The fee would be matched roughly 2-to-1 by the federal government and applied mostly toward maintaining Medicaid reimbursement. The money would also go toward hospitals with a large number of Medicaid patients. Craig Jones, president of the Oklahoma Hospital Association, said his organization has advocated for the fee for many years. “When care for Medicaid patients is fully funded, it makes hospital care more affordable for all Oklahomans,” Jones said in a statement.
Newberry files debt reduction bill
Sen. Dan Newberry has filed legislation aimed at reducing Oklahoma’s long term fiscal burden by guaranteeing a percentage of spillover funding is dedicated toward paying the state’s pension liability debt. Senate Bill 1264 would take effect after the state’s Rainy Day Fund is full. The measure would then ensure that 33 percent of any spillover funding is applied toward the reduction of pension liability debt. Once pension liability is funded at 80 percent, the same percentage of spillover funding would be dedicated to reducing the state’s bonded indebtedness. Newberry noted that while recent reforms have set the state on a path toward long-term fiscal stability, his proposal would further strengthen Oklahoma’s retirement systems.
NewsOK: Opposition to bond issues won’t help Oklahoma’s credit ratings
When they sit down Thursday with the nation’s top bond rating agencies to discuss Oklahoma’s standing, Gov. Mary Fallin and others are likely to hear that our state needs to take on more bonded indebtedness. The chances of that happening, though, are remote. Repairing the Capitol building would require about $140 million, and using a bond issue to pay for it makes perfect sense and needs to be done. Lawmakers also ought to consider using a bond issue for construction of a new state medical examiner’s office, whose current facility is outdated and overcrowded, and to ease the backlog of endowed chairs at Oklahoma’s colleges and universities. The state’s bond adviser, Jim Joseph, who is making the trip to New York with Fallin and others, has said Oklahoma could add $300 million in bond indebtedness without affecting its credit rating. Yet that isn’t likely to sway Republicans who see debt as a bad thing. And it can be a bad thing for an individual. But for governments, bond indebtedness helps secure the money needed to reinvest or make upgrades.
Why the Laffer proposal is like an ice cream diet
Some Oklahoma politicians have trumpeted a report by economist Arthur Laffer to claim that eliminating the state income tax will fuel an economic boom. Laffer is best known for the Laffer Curve, which he famously sketched on a napkin while meeting with Dick Cheney in a hotel bar. The Laffer Curve makes an obvious point: government revenues peak at a tax rate somewhere between zero and one-hundred percent. In the lower half of the curve, raising taxes will increase revenue, but go too high and the reduced economic activity due to excessive taxation will result in lower revenue. However, whether a tax cut will result in higher or lower revenue depends on where you are on the curve. That doesn’t stop politicians from repeating to the point of absurdity the idea that all tax cuts lead to revenue growth.
David Blatt is Critical of the Proposals Put Forth by the State’s Tax-Reform Task Force
On this edition of StudioTulsa, we revisit a topic that we addressed a few days ago on our program — namely, the eight proposals on tax policy that were officially recommended at the end of 2011 by the state’s Task Force on Comprehensive Tax Reform. We had State Senator Mike Mazzei (R-Tulsa) on ST last week to talk about these proposals; he’s a co-chair of this task force. Today, our guest is David Blatt, director of the non-partisan Oklahoma Policy Institute, which is a think tank that works to offer ideas and analysis of various policies and issues affecting our state. Blatt tells us that he has problems with the thrust of the task force’s recommendations, adding that the proposals amount to a tax hike for the bottom half of Oklahoma’s tax-payers — and an overall economic benefit for the state’s wealthiest citizens.
Previously: Task force proposal would raise taxes on most Oklahomans, especially harm seniors and families with children from the OK Policy Blog
Okla. House pushes forward with ethics panel
After a tumultuous legislative session last year in which three members were publicly reprimanded, including one facing criminal charges, a newly created House Ethics Committee on Wednesday approved a proposed code of conduct for members and began developing its rules. Much of the code of conduct approved by the panel was taken from existing House rules and from the Oklahoma Constitution. Among the prohibitions are engaging in disorderly behavior, including possessing or being under the influence of alcohol in any part of the Capitol building controlled by the House. Lawmakers also are prohibited from using profane language on the House floor or in committees. Other prohibitions include conduct constituting a conflict of interest under state law, not disclosing when a member may have a personal or private interest in a bill before the Legislature, and publishing or distributing material with “reckless disregard for the truth.” Under the proposed rules, members can be disciplined and even expelled from the House with a two-thirds vote of its members.
See also: Ethics panel rule would allow disciplinary actions against former members from 23rd and Lincoln
Bill would put legislature under Oklahoma open meeting, records act
Legislation in the works by an Oklahoma City lawmaker would make the Oklahoma Legislature subject to the Open Meeting and Open Records acts. The Legislature has exempted itself from both. Senate Bill 1243 by Sen. David Holt, R-Oklahoma City, would make the Legislature and its committees public bodies subject to the Open Meeting Act. Senate Bill 1244, also by Holt, would make the Legislature subject to the Open Records Act. Information that would identify an individual, other than a lobbyist, public officer or employee acting in official capacity, could be redacted to protect the identity of the individual, the measure says. It also would allow for confidentiality of public employees acting as whistleblowers. Rep. Jason Murphey, R-Guthrie, has similar measures pending in the Oklahoma House. He said his measures would exempt caucus meetings and constituent communications from the Open Meeting and Open Records acts.
2011 Oklahoma bankruptcy filings down
Oklahoma bankruptcy filings declined last year, although there were more filed in the state’s Western Federal District, which includes Oklahoma City. The 13,479 total bankruptcy filings last year in Oklahoma was 2.2 percent less than the number filed in 2010. However, filings grew 10.6 percent in the Western District based in Oklahoma City, rising more than 700 to 7,749. Filings decreased about 15 percent in the Northern and Eastern Federal districts, based in Tulsa and Okmulgee, respectively. Will Hoch, chairman of the bankruptcy and creditor’s rights practice group for the Crowe & Dunlevy law firm, said there doesn’t appear to be any legal reason why the state’s districts experienced different filing rates. Last year’s slight decrease in bankruptcy filings ended a string of four straight increases. The last time filings declined was in 2006, the year after major changes in federal bankruptcy rulings prompted a rush to bankruptcy courts in Oklahoma and across the nation.
Sherrer bill aimed at stopping misuse of ‘independent contractor’ worker classification
A measure filed by Rep. Ben Sherrer, D-Chouteau, is targeted at preventing employers from misclassifying workers as independent contractors to avoid carrying workers’ compensation insurance, as well as payment of unemployment and other taxes. Under HB 2258, the Oklahoma Tax Commission, Workers’ Compensation Court and Oklahoma Employment Security Commission would not only share information, but coordinate investigative and enforcement efforts. The idea is to detect employers who intentionally misclassify workers as independent contractors rather than employees “for the purpose of affecting procedures and payments relating to withholding and social security, unemployment tax or workers’ compensation premiums,” the measure states. The three state entities would create a secure database accessible by enforcement personnel.
Oklahoma receives barely passing grades for tobacco control and prevention
Oklahoma once again received barely passing grades for tobacco control and prevention, according to a national report released Thursday. The report, “State of Tobacco Control 2012” by the American Lung Association, indicated that Oklahoma improved in one category – a C for cessation coverage this year, a step up from last year’s grade of D. Oklahoma received D’s in all the other categories: tobacco prevention and control spending, cigarette tax and smoke-free air. Most states received poor marks in the report. Despite Oklahoma’s bad grades, it was among only four states to receive all passing marks. The other three were Delaware, Hawaii and Maine.
Quote of the Day
Unless Oklahoma is made up of 3.7 million special interests, then it’s just simply wrong to say that these are tax credits for special interests.
–OK Policy Director David Blatt, speaking to KWGS about a tax reform task plan that would pay for a reduction in the top income tax rate by ending numerous broad-based exemptions and credits.
Number of the Day
Percentage of working-age Oklahomans with a disability who were employed in 2009
Boeing job grab shows peril of offering tax dollars for growth
Using $43 million in taxpayer money to build a training center for aerospace workers was a good idea for Wichita, Kansas, the self-styled “Aviation Capital of the World,” said Dave Unruh, a Sedgwick County commissioner. It remains money well-spent, Unruh said, even after Boeing Co.’s Jan. 4 decision to close its 2,160-employee plant in Wichita, the county seat. Hundreds of those jobs will move to Texas and Oklahoma. He favors putting up as much as $100 million more as a “closing fund” to draw new employers. Still, Unruh didn’t know where the money would come from. That fund may serve only as a down payment, since the bar to attract new and expanding businesses keeps rising for state and local governments. Boeing, the world’s biggest aerospace company, won incentives estimated at more than $700 million in 2009 to build a $750 million factory in South Carolina. At least $200 million will go to aid employers expanding in New Jersey, under a bill signed this month by Governor Chris Christie.
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