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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 Senate Pro Tem Brian Bingman said he thinks a cut to the top income tax rate of 0.25 to 0.75 percentage points is realistic. A NewsOK letter to the editor examines the many underfunded budget needs that should be more important than a tax cut.
After years of leading the nation in access to prekindergarten programs, Oklahoma has fallen to second and rolled back its funding levels to what it was a decade ago. The state’s budget for common education likely will be flat this year, which for many school districts amounts to a reduction. The OK Policy Blog previously discussed how flat funding leaves public education stuck in a hole.
Plummeting natural gas prices threaten to stop the state’s budget recovery in its tracks. The contested recount of House District 71 that left out two ballots which were later found will go to court Thursday. Three eastern Oklahoma counties have the highest unemployment rates in the state.
Oklahoma trails other states in evaluating tax incentives for economic development, according to a new study. Savings from consolidating the state’s information technology services may be substantially more than estimated. The Daily Show did a report on location at the Oklahoma legislature.
The Number of the Day is the percentage of income paid in state and local taxes by the bottom 20 percent of earners in Oklahoma, twice what is paid by the top 1 percent. In today’s Policy Note, The New Republic shows that the founding fathers passed an individual mandate requiring the purchase of health insurance.
In The News
Legislative leader aiming for quarter to three-quarters percentage point income tax cut
It would be difficult to have a state income tax cut of greater than 0.75 percentage points, Senate Pro Tem Brian Bingman said Thursday. Lawmakers and Gov. Mary Fallin are pondering a handful of proposals to reduce and possibly eliminate the income tax, but no agreements on a specific amount have been reached, said Bingman, R-Sapulpa. The current top income tax rate is 5.25 percent. Bingman said he thinks a tax cut of 0.25 percentage points to 0.75 percentage points is realistic. House Speaker Kris Steele, R-Shawnee, would not speculate on the amount of any reduction in the income tax, saying discussions are in the preliminary stages, but he and Bingman agree that the top income tax rate will be reduced. “I am confident there will be a tax cut this year,” Steele said.
Read more from The Tulsa World.
States shouldn’t cut taxes with its unfunded and underfunded needs
Our Republican governor and some legislators are rushing headlong to cut our state income tax at all costs. So many economists have expressed caution and worry. Even the Republican state treasurer urged a cautious approach. Every time I watch the local news or read The Oklahoman, there’s a story about more needs in our state. We still have underfunded state pensions, the Department of Human Services needs a big influx of funds, as do Medicaid, community colleges and state infrastructure — including our Capitol building, other state buildings and state parks. We continue to have prison underfunding, many schools need help and we desperately need a new medical examiner’s office and increased staff. The list just goes on.
State cuts back on pre-K funding
After years of leading the nation in access to prekindergarten programs for 4-year-olds, Oklahoma has fallen to second and rolled back its funding levels to what it was a decade ago, according to a national report. In spite of the setbacks, Oklahoma is only one of three states enrolling more than 70 percent of 4-year-olds in an education program, according to the State Preschool Yearbook compiled by the National Institute of Early Education Research, based at Rutgers University in New Jersey. Florida now leads the country in access with 76 percent of all 4-year-olds enrolled in a program. That ranking is tempered by its last-place finish in spending per child and inability to meet quality benchmarks. Oklahoma remains a leader in state-funded pre-K, but the spending has fallen from decade high of $4,567 in 2010 to $3,461 in 2011, which researchers say causes a concern for maintaining quality programs. The state ranks 27th in state-funded early education spending.
Read more from The Tulsa World.
School funding predicted to be flat
The state’s budget for common education likely will be flat this year, and for many school districts, that amounts to a reduction, lawmakers said Thursday. “It looks like we’ll be somewhere in the range of a flat budget. I know that is not good because a lot of your expenses continue to grow,” Sen. John Ford, R-Bartlesville, told a group of parents and school administrators at a Tulsa Area Parent Legislative Action Committee meeting in Owasso. Sen. Brian Crain, R-Tulsa, said, “We’re going to be able to stabilize, but it’s going to be another tough year.” Four state lawmakers and state Superintendent Janet Barresi’s chief of staff, Joel Robison, spoke and answered questions about education in Oklahoma and various bills in the Legislature that will affect it.
Read more from The Tulsa World.
Previously: Stuck in a hole: What flat funding means for the common education budget from the OK Policy Blog
Stumbling revenue collections should signal caution
Over the past two years, Oklahoma’s revenue collections have been on a steady path to recovery. For the first nine months of FY 2012, collections to the General Revenue fund (GR) are up 22 percent compared to the same period two years ago. As the chart below indicates, tax collections have still not fully recovered from their steep drop during the 2008-09 recession. Year-to-date GR remains 7 percent below its pre-recession peak and below the levels of six years ago (without adjusting for inflation or population growth). Yet through February, monthly GR collections had been up compared to the same month from the prior year for 22 straight months. Total Gross Receipts to the Treasury (GRT), which includes more taxes than the General Revenue fund, was up for 24 consecutive months. This month, however, there are signs the revenue recovery is stumbling.
Read more from the OK Policy Blog.
Stray ballots found after Republican certified winner in HD 71
Tulsa County election officials certified a new winner in the razor-thin House District 71 election Wednesday – only to discover two more ballots that apparently had remained unsecured in election equipment for days and which would reverse the results again if counted. The whole mess will be taken to court on Thursday morning for Tulsa County District Judge Daman Cantrell to figure out. The day started with Democrat Dan Arthrell ahead by three votes in the April 3 election. At the request of Republican candidate Katie Henke, Cantrell ordered a recount Wednesday, which resulted in Arthrell losing four votes and Henke being certified as the winner by one vote. But several hours later, acting at the urging of Arthrell’s supporters, election officials reinspected election equipment and found two more ballots from the election – both for Arthrell, enough to swing the returns in the other direction. The ballots were in a black box that sits underneath vote-tallying machines to collect ballots.
Read more from The Tulsa World.
Eastern Oklahoma counties record highest unemployment rates in February
Three eastern Oklahoma counties have the highest unemployment rates in the state. According to the Oklahoma Employment Security Commission, Sequoyah County had a jobless rate of 11.4 percent in February. Latimer County had an unemployment rate of 11.2 percent and the jobless rate in LeFlore County was 10.5 percent. February’s rates marked an increase from January in Sequoyah and LeFlore counties, but the rate was slightly lower in Latimer County. The commission says the counties with the lowest unemployment rates are in western Oklahoma. Roger Mills County had a jobless rate of 2.7 percent, and the unemployment rates in Dewey and Ellis County hit 2.8 percent. The February jobless rates in Oklahoma’s largest counties — Oklahoma and Tulsa — were 6.3 percent and 6.7 percent, respectively.
Read more from the Associated Press.
Oklahoma ‘trailing behind’ on tax-incentive evaluation
Oklahoma trails other states in evaluating tax incentives for economic development, according to a new study. All Oklahoma’s neighboring states — except for Colorado — do a better job, according to a study by the Pew Center on the States. This news is unlikely to surprise the members of the tax credit task force, which, among other things, recommended requiring impact studies and annual auditing of such economic incentives.
Read more from StateImpact Oklahoma.
See also: The full report from The Pew Center on the States
State finds more savings in IT consolidation than expected
Savings from consolidating the state’s information technology services may be substantially more than estimated, said Alex Pettit, the state’s chief information officer. Savings for the state Education Department, first estimated at $100,000 a month, are coming in at nearly twice that level, he said, but it’s too early to tell whether that level of savings can be achieved in other agencies. Savings come by combining printing and computer desktop services and sharing information technology staff, he said. The biggest savings have come in lowering personnel costs; about 130 information technology positions in the state have been eliminated through attrition. “We still have to do transformation of their services,” Pettit said. “That’s going to take us some time.” A basic approach to consolidating virus and spam protection for the state’s computers has generated larger than expected savings, Pettit said. Instead of paying $1 million a year to several vendors for virus protection software, the state now is buying one product from one vendor at a cost of about $180,000.
Bro-choice
The Daily Show reports on location from Oklahoma, where a proposed amendment to its “personhood” bill would effectively outlaw male masturbation.
Watch the video from The Daily Show.
Quote of the Day
We still have underfunded state pensions, the Department of Human Services needs a big influx of funds, as do Medicaid, community colleges and state infrastructure — including our Capitol building, other state buildings and state parks. We continue to have prison underfunding, many schools need help and we desperately need a new medical examiner’s office and increased staff. The list just goes on.
–Blanchard resident Jack Dill, writing in NewsOK about why Oklahoma should not cut taxes
Number of the Day
9.9 percent
Percentage of income paid in state and local taxes by the bottom 20 percent of earners in Oklahoma, compared to 4.8 percent for the top 1 percent of earners.
Source: ITEP via Oklahoma Policy Institute
See previous Numbers of the Day here.
Policy Note
If health insurance mandates are unconstitutional, why did the Founding Fathers back them?
In making the legal case against Obamacare’s individual mandate, challengers have argued that the framers of our Constitution would certainly have found such a measure to be unconstitutional. Nevermind that nothing in the text or history of the Constitution’s Commerce Clause indicates that Congress cannot mandate commercial purchases. The framers, challengers have claimed, thought a constitutional ban on purchase mandates was too “obvious” to mention. Their core basis for this claim is that purchase mandates are unprecedented, which they say would not be the case if it was understood this power existed. But there’s a major problem with this line of argument: It just isn’t true. The founding fathers, it turns out, passed several mandates of their own. In 1790, the very first Congress—which incidentally included 20 framers—passed a law that included a mandate: namely, a requirement that ship owners buy medical insurance for their seamen. This law was then signed by another framer: President George Washington. That’s right, the father of our country had no difficulty imposing a health insurance mandate. Six years later, in 1798, Congress addressed the problem that the employer mandate to buy medical insurance for seamen covered drugs and physician services but not hospital stays. And you know what this Congress, with five framers serving in it, did? It enacted a federal law requiring the seamen to buy hospital insurance for themselves. That’s right, Congress enacted an individual mandate requiring the purchase of health insurance. And this act was signed by another framer, President John Adams.
Read more from The New Republic.
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