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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 despite economic growth, finance officials are predicting a ‘flat’ budget next year to the loss of one-time money and the full phasing-in of tax cuts. The Tulsa World reports on OK Policy’s projections that the budget will not return to prerecession levels until at least FY 2014. Oklahoma Watch examines the numerous exemptions that riddle the state sales tax. See OK Policy’s issue brief laying out options for sales tax reform here.
The New Baptist Covenant in Oklahoma is launching an effort to combat exploitative payday lending in Oklahoma. OK Policy and the Oklahoma Assets Coalition previously explained the dangers of payday lending and why affordable credit is crucial for Oklahomans’ financial security. A state task force found that drug and alcohol abuse, mental illness and domestic violence cost Oklahoma $4.3 billion this year. The task force on children of incarcerated parents is examining problems faced by Oklahoma children with fathers who are jailed in another state.
Adoptions in Oklahoma have increased 64 percent over the last nine years, the fastest rate in the nation. Three special elections for state House and Senate seats early next year will be run in the newly drawn districts. The Tulsa World examines arguments made by Texas that Oklahoma should sell its water. The downtown on the range blog argues that public investment in Bricktown is being wasted due to poor oversight of developers.
The Number of the Day is amount per month more the average Oklahoma household paid for gasoline in 2011 compared to 2010. In today’s Policy Note, new Census findings on the “near poor” show that 100 million people — one in three Americans — are either in poverty or just above it.
In The News
Despite economic growth, finance officials predict ‘flat’ budget due to loss of one-time money
Fueled by a booming oil and gas industry, Oklahoma’s economy continues to rebound, and collections to the state’s general fund are outpacing the previous year and official estimates. But state finance officials warn that optimism over next year’s budget should be tempered by remembering that nearly $500 million in one-time revenue was used to plug holes in the current state budget, and the final bills still haven’t come in on an income tax cut and a tax break moratorium that expires next year. “It’s still a little early … but my message is that I think we’re dealing with a flat budget,” Preston Doerflinger, director of the Office of State Finance, told The Associated Press.
Read more from The Associated Press.
Despite improvement, state’s budget picture still has ways to go
Despite monthly increases in state revenue, Oklahoma’s budget picture is a long way from pre-downturn levels, said David Blatt, director of the Oklahoma Policy Institute, on Friday. The group predicts that the state’s budget picture will not return to prerecession levels until at least fiscal year 2014. Blatt said that is due to a loss in one-time revenues used to plug budget holes as a result of declining state revenues. In addition, a moratorium on some tax breaks is being lifted, Blatt said. The state’s top tax bracket is also expected to drop to 5.25 percent from 5.5 percent on Jan. 1, he said. The lower rate means about $120 million less in state revenue.
Read more from The Tulsa World.
Plentiful exemptions complicate Oklahoma sales taxes
Buy food for your family, pay sales taxes. Buy food for your earthworm farm, no sales taxes. Buy a $9 ticket to the movies, pay sales taxes. Buy a $275 ticket to an NBA basketball game, no sales taxes. Buy a bottle of aspirin, pay sales tax. Buy a bottle of prescription OxyContin, no sales taxes. There are 149 exceptions at last count. Seem confusing? Oklahoma’s sales-tax rules are pretty simple in theory. Everything that’s sold in the state is subject to the sales tax, unless there’s an exemption. Last year, the tax commission estimated the revenue impact on 64 of the exemptions at just short of $4.1 billion a year, more than half the state’s annual budget. But getting big state revenue hikes by wiping out exemptions isn’t all that simple. The two biggest exemptions: $1.5 billion on sales of goods that will be sold again and the $1.7 billion for sales to manufacturers. While both exemptions represent a huge loss of revenue to the state, their removal would amount to double taxation on consumers — products would be taxed before they got to the final consumer and again when they are sold retail — and would result in a significant increase in prices.
Previously: Fixing the sales tax: Options for reform from Oklahoma Policy Institute
OKC Baptists take aim at payday lending
Payday lending traps many of America’s working poor in a vortex of debt, participants at the New Baptist Covenant II satellite meeting in Oklahoma City learned. Each New Baptist Covenant facility focused on a mission project, and Oklahoma City organizers chose an awareness campaign about the perils of payday lending. Known by various names, payday lending is the practice of offering high-interest, short-term loans, usually in amounts from $50 to $500. Oklahoma law calls the practice “deferred deposit lending,” and it allows annual percentage rates to reach 391 percent, reported Kate Richey, an analyst for the Oklahoma Policy Institute. In Oklahoma, the primary borrowers are nonwhite single women with low income and lower-than-average education, she said, noting: “Payday lenders won’t lend to people without jobs. So, the victims are the working poor. They’re preying on people with just enough so they can take it from them.” These people don’t qualify for conventional loans from banks, and they often don’t have banks in their neighborhoods, anyway, Richey said. “If you don’t have a car and a bank in your neighborhood, where are you going to go?” she asked.
Read more from The Baptist Standard.
Previously: Financial security for Oklahomans: The critical role of affordable credit from the OK Policy Blog
Mental illness, drug abuse cost Oklahomans billions
A somber group settled down seven years ago to consider why substance abuse and two hush-hush subjects consume thousands of Oklahomans’ lives and billions of taxpayers’ dollars. Many members of the Oklahoma Governor’s and Attorney General’s Blue Ribbon Task Force had personally seen the tragedies of untreated substance abuse, mental illness and domestic violence. The group of 15 hung on to the hope that, over about a year, they would come up with recommendations to save Oklahoma lives and money. A team of nine researchers — the principal investigator jokingly called his team high-priced accountants on a $200,000 contract — plunked down their shocking research before the Task Force. Drug and alcohol abuse, mental illness and domestic violence cost the state $3.4 billion in 2005, the report showed. Today, a conservative cost estimate is about $4.3 billion or about $1,150 per Oklahoman.
Tax force looks at fathers in prison
Tonya Finley has been taking her granddaughters to see their father often enough that the prison guards know them. “Savannah will go up to them and ask, ‘Will you please let my daddy come home?’ and, they’ll go ‘We’re just about to,’” Finley said. At the first of every month, Finley and her granddaughters Alissa, 9, and Savannah, 6, leave their home in Hugo at 4 a.m. to visit the girls’ father and Finley’s son, Shawn Ragan, at a correctional facility in Tennessee Colony, Texas, about 170 miles south of Hugo. Ragan, 28, was convicted of aggravated robbery in 2006 and was sentenced to 25 years in prison. He was arrested in 2005 after he used a broken beer bottle to rob an elderly couple while at a lake, according to court records. His daughters are two of at least 1,800 children in Oklahoma with parents incarcerated outside of the state.
Adoptions in Oklahoma increasing at fastest rate in the nation
The number of Oklahoma children finding adoptive homes through the state Department of Human Services is growing at a rate well above the national average. Adoptions have increased 64 percent in the past nine years, according to data about state-involved adoptions from the U.S. Health and Human Services Department. Nationally, adoptions have increased only 3 percent. The increase can be mainly attributed to the new focus at DHS on adopting children more quickly, agency spokeswoman Sheree Powell said. The Swift Adoptions Services unit, which is part of the child welfare division, has 92 employees who focus solely on adoption, Powell said.
Special election legislative candidates must run in new districts
Contenders seeking to run for three legislative seats in special elections early next year have to run in the newly drawn House and Senate districts instead of the current districts, an attorney for the state Election Board said Friday. The Election Board’s general counsel at the state attorney general’s office advised that in her opinion, the 2012 special elections should be conducted using the new district boundaries, state Election Board Secretary Paul Ziriax said. The redistricting acts repealed the old district lines on Nov. 1. The three open legislative seats became vacant or will become vacant after the bills took effect. The affected districts are House District 71 in Tulsa County and Senate Districts 46 in Oklahoma County and 20 in Kingfisher, Logan, Noble and Pawnee counties.
Texas ratchets up its efforts to obtain Oklahoma water
Texans have coveted Oklahoma water for years, even resorting to a lawsuit in 2007 to try to force us to sell them the precious resource that would vastly enhance their northern region’s already bright future. In an effort to plan for the future, Oklahoma adopted a moratorium on out-of-state water sales in 2002 so a comprehensive analysis of problems and needs could be undertaken. The moratorium was extended in 2006, prompting the Tarrant Regional Water District to file suit the following year. The Texans could access Red River water, but they don’t want to because the river is very salty and would require expensive treatment to be usable. But there are concerns that diverting much water from the Red River could adversely affect its ecosystem, which is adapted to the naturally occurring salt.
Read more from The Tulsa World.
Public investment in Bricktown being wasted by poor oversight of developers
Here’s the thing that frustrated me about Bricktown: The amount of taxpayer dollars we have pumped into this tiny little district and the miniscule ROI that we have seen following that. Basically it follows the exact same narrative of other public economic incentives that never work. Hey developers, we’re going to throw an insane amount of cash your way by investing in this district so that your land values rise. Oh, but then we’re not going to come in and direct development in ANY meaningful way at all. Corporate welfare + deregulation. Nevermind that the PUBLIC made Bricktown, and now it has totally lost control over how that district develops. Quality standards have spiraled down hill. The Bricktown Suburban Design committee is a laughing stock. We can’t even use the argument of “protecting the public investment (ie: the canal)” any longer at this point. Bricktown developers and parking lords are out of control.
Read more from downtown on the range.
Quote of the Day
Payday lenders won’t lend to people without jobs. So, the victims are the working poor. They’re preying on people with just enough so they can take it from them.
–OK Policy analyst Kate Richey, speaking to the New Baptist Covenant as part of their new effort to combat payday lending
Number of the Day
$63.53
Amount per month more the average Oklahoma household paid for gasoline in 2011, compared to 2010.
Source: Oil Price Information Service via EnergyTrap.org
See previous Numbers of the Day here.
Policy Note
Older, suburban, and struggling, ‘near poor’ startle the Census
They drive cars, but seldom new ones. They earn paychecks, but not big ones. Many own homes. Most pay taxes. Half are married, and nearly half live in the suburbs. None are poor, but many describe themselves as barely scraping by. Down but not quite out, these Americans form a diverse group sometimes called “near poor” and sometimes simply overlooked — and a new count suggests they are far more numerous than previously understood. When the Census Bureau this month released a new measure of poverty, meant to better count disposable income, it began altering the portrait of national need. Perhaps the most startling differences between the old measure and the new involves data the government has not yet published, showing 51 million people with incomes less than 50 percent above the poverty line. That number of Americans is 76 percent higher than the official account, published in September. All told, that places 100 million people — one in three Americans — either in poverty or in the fretful zone just above it.
Read more from The New York Times.
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