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Today you should know that a new poll shows that large majorities of Oklahoma voters oppose state income tax cuts if it means less funding for schools, roads and public safety. The poll also shows that voters believe cutting the income tax will lead to higher sales and property taxes to make up for lost revenues, and two-thirds oppose this tradeoff. See a memo from with the full results from Global Strategy Group here.
More parents and educators are expressing concerns that further tax cuts would have devastating effects on Oklahoma schools. Between 50 and 75 parents walked the Capitol yesterday to push for more public school funding. UCO economist and business dean Mickey Hepner debated Arthur Laffer over Laffer’s plan to cut the state income tax. This Land Press compiled tweets from those attending the event.
State Rep. Jerry McPeak accused state education officials of circumventing a law creating an appeals process for students denied a diploma. The monitors overseeing the child-welfare improvement plan for the Oklahoma Department of Human Services will not give their approval to the latest version. Officials from Texas and Tennessee have been identified as top candidates for the new Director of the Oklahoma DHS. The Tulsa World writes that legislation could undo all the progress Oklahoma has made in protecting animals raised in puppy mills.
The oil and natural gas industry accounted for $1 in every $3 of gross state product, according to a report commissioned by the Oklahoma Energy Resources Board. A Reuters special report examines the complicated financial-engineering that has been more lucrative for Chesapeake Energy than selling gas. Oklahoma higher education officials are optimistic about a plan to require energy cost-cutting at state agencies.
The Number of the Day is the percentage Oklahomans who believe an educated and well-trained workforce is more important for boosting the economy than low personal income tax rates. In today’s Policy Note, the Pew Economic Mobility Project finds that Oklahoma is one of the worst states in the nation for individuals seeking to climb the economic ladder.
In The News
Poll: Voters oppose lower tax rate if funding for schools, roads would be cut
Large majorities of Oklahoma voters oppose state income tax cuts if it means less funding for schools, roads and public safety, a poll released Wednesday by the Oklahoma Advocacy Project shows. The poll also shows voter concern that cutting the income tax will lead to higher sales and property taxes to make up for lost revenue. The telephone poll of 603 registered voters was conducted May 3-6 and had a margin of error of plus or minus 4 percentage points. It appears to stand in contrast to an April 3-5 Sooner Survey telephone poll of 500 voters that found that by a better than 2-to-1 margin Oklahomans favor cutting the state income tax to 4.75 percent. The Oklahoma Legislature is considering several income tax cut proposals, including one from Gov. Mary Fallin to cut the top income tax rate from 5.25 percent to 3.5 percent. While lawmakers and Fallin have said the eventual tax cut will likely be less aggressive than her proposal, there is broad discussion of cutting the top tax rate to 4.95 percent, possibly with revenue-driven triggers to force future cuts until the tax is eliminated.
Read more from The Tulsa World.
See also: New poll shows Oklahomans oppose income tax cut proposals from the OK Policy Blog; Tax Cut Survey Results from Global Strategy Group
Tax cut bodes ill for area schools
As the state Legislature works on a plan for Oklahoma’s income tax, educators and parents in Norman and across the state have expressed growing concern about the devastating effects the bill will have on the state’s educational institutions. An immediate result of this trend is larger class sizes and greater strain on the dristrict and state middle and high school teachers, impeding the educators’ abilities to provide students with quality education, educators have said. Currently class size in Norman schools are in the mid- to high 30s. “As a school administrator, I find the timing of this discussion of income tax legislation especially concerning,” said Dr. Joe Siano Norman superintendent and president elect of the Oklahoma Association of School Administrators. “Like many other entities, we fully understood the necessity of initial cuts in previous years, but now that the state is recovering from its economic crisis, we would hope that the Legislature’s initial priorities would be to repair these institutions which have struggled.”
Read more from The Norman Transcript.
Parents push for school funding
The Mad Mom March brought the push for more public school funding to the state Capitol on Wednesday. About 50 people signed in for the effort, although fewer than that were at the opening rally. Organizers said several of the marchers had gone ahead with their efforts in advance of the rally, and as many of 75 people may have taken part in the day’s effort. Participants came from Bartlesville, Oklahoma City, Tulsa and Norman, organizers said. “We believe that an adequate education is a basic right of every Oklahoma child, and the state should fund education at a level so schools can provide this service,” said Marlow Sipes, the Tulsa mother of an Eisenhower International School student and co-founder of 49th is Not OK, the group sponsoring the event.
Read more from The Tulsa World.
Economists debate elimination of income tax
Whether to eliminate Oklahoma’s state income tax was debated Wednesday by two economists at the Oklahoma History Center. The State Chamber of Oklahoma hosted a tax policy dialogue. Featured in the debate was economic professor Mickey Hepner, Ph.D, the dean of the University of Central Oklahoma School of Business Administration, and economist Arthur Laffer, Ph.D., former economic adviser to President Ronald Reagan. State Treasurer Ken Miller, Ph.D., moderated the forum that was co-sponsored by the Oklahoma Policy Institute and the Oklahoma Council of Public Affairs. “We see that the Oklahoma economy is already doing pretty well,” Hepner said. “In fact we’re doing better than most of the states that don’t have a personal income tax.” Miller pointed out that Oklahoma has one of the lowest unemployment rates in the country at 5.4 percent, which is 3 percent less than the national average. “It’s the second best state in the nation for job creation. It has the fourth highest per capita income growth,” Miller said. Oklahoma is drawing a migration of new residents from Texas and other states.
Read more from The Edmond Sun.
See also: Tweets from the income tax debate compiled by This Land Press
State Rep: Barresi bypassing grad appeal process
State Rep. Jerry McPeak accused state education officials of circumventing a law creating an appeals process for students denied a diploma. The law, signed by Gov. Mary Fallin in April, gives high school seniors the right to appeal denial of their diploma for not passing enough proficiency tests. At a media conference Wednesday, McPeak, D-Warner, said State Superintendent of Public Instruction Janet Barresi is not following the appeals law. As a result, hundreds of graduates will suffer by not getting diplomas. “There are 2,000 students whose lives are going to be changed forever,” McPeak said after the conference. “We just want her to allow the appeals process to occur.” A spokesman for Barresi said students have many opportunities to make up high school End of Instruction tests they do not pass. Department of Education Communications Director Damon Gardenhire said appeals are a last resort after other options have been exhausted. “They have many options, such as going a fifth year to cross that finish line, or taking a GED,” Gardenhire said.
Read more from The Muskogee Phoenix.
Monitors of child-welfare settlement won’t approve Oklahoma DHS plan as-is
The monitors overseeing the child-welfare improvement plan for the Oklahoma Department of Human Services will not give their approval to the latest version, according to a statement released Wednesday. The improvement plan – referred as the Pinnacle Plan – is the agreement made to settle a federal class-action lawsuit filed by the nonprofit group Children’s Rights seeking changes in how the foster-care system operates. In the statement, the panel called the plan a “very positive step forward for the children and families of Oklahoma.” But the statement added, “This process is critically important, and all parties agree some additional time is required to conclude our work together to achieve the best possible reform plan for Oklahoma’s children.” The latest draft includes details about improving service to prospective foster parents, raising pay for child welfare staff and finding permanent homes for abused and neglected children faster. About $30 million in new money would be required for year one, $60 million for year two, $75 million through year three, $85 million for year four and $100 million ongoing from year five, according to the plan.
Read more from The Tulsa World.
Out-of-state interest in DHS Director’s job a good sign
In spite of a law to deter it, Oklahoma lawmakers routinely transition immediately from the Legislature to a high-paying state job, enjoying a golden parachute as they exit elected office. It appears that won’t be the case when a new director is named at the Department of Human Services. Neither of the publicly identified top candidates comes from Oklahoma’s political community. Eric Bost previously served as chief executive officer of the Texas Department of Human Services, and Ed Lake is a retired deputy commissioner of the Department of Human Services in Tennessee. We believe this is a positive development and a step in the right direction. Given the magnitude of the problems facing the agency and the need to rebuild DHS’s reputation, the next director should be an experienced professional who receives the job based on merit, not political connections.
Puppy mill legislation may eliminate standards
It’s bad enough that lawmakers don’t come up with satisfactory measures to address problems they should be tackling. It’s even worse when, for questionable reasons, they undo the decent work that they have accomplished. That’s what appears to be in the making with House Bill 2921, which in effect guts legislation passed several years ago that would have placed some minimal standards on pet breeders. The legislation passed back then was in response to regular reports about so-called “puppy mills,” where animals sometimes face inhumane and even horrific conditions. For years, Oklahoma has been known as one of the nation’s top puppy producers, in part because of the lax standards here for breeding operations. Thanks to ongoing publicity and growing public support, lawmakers finally passed a measure that established a commercial pet breeders board and some standards of care for pet breeding facilities. But some breeders fought back and apparently have won the support of some lawmakers.
Read more from The Tulsa World.
Oil industry adds $61 billion to Oklahoma economy, report shows
The oil and natural gas industry pumped $61 billion into the Oklahoma economy last year, according to a report commissioned by the Oklahoma Energy Resources Board. “This study is an effort to understand better the impact on jobs and taxes,” OERB Chairman David House said. “Everything that we do has touched so many lives in this state.” Economist Russell Evans, executive director of Oklahoma City University’s Steven C. Agee Economic Research and Policy Institute, said the oil and gas industry helped Oklahoma weather the recession better than most other states. “Oklahoma continues to be defined by its oil and gas industry,” he said. The oil and gas industry’s input to Oklahoma’s economy in 2011 totaled more than $61 billion, or about $1 of every $3 in the gross state product, Evans said. That figure comes from adding the industry’s direct and indirect output to the spending of its 344,000 workers in Oklahoma.
Chesapeake’s deepest well: Wall Street
Far from the drilling rigs of Oklahoma, America’s second-largest natural gas producer is having to dig ever deeper into the well that really fueled its growth: Wall Street. In a Times Square office building, a team tapped by Chesapeake Energy Corp deployed more than 40 bankers, lawyers and other experts to plot another chapter in that strategy. Dubbed Glenn Pool, it was more financial engineering than petroleum engineering. In essence, Chesapeake sold future rights to the gas in its wells. The deal took in approximately $850 million last year. Glenn Pool proved so innovative that a trade magazine honored it this March. In an especially creative twist, the borrowings were chopped into two slices and sold to investors – akin to the way subprime housing loans were turned into securities and sold last decade. These and other sophisticated financings are central to the business model of a company that in some ways resembles a hedge fund, using borrowed money to make big financial bets. The financial-engineering strategy began as a way for CEO Aubrey McClendon to expand the company. Now, Chesapeake has become so reliant on deals like Glenn Pool that more such transactions may be necessary just to tread water.
Regents on board with energy-efficiency mandate
Oklahoma’s top higher education official said he’s optimistic about a plan that would require energy cost cutting at state agencies, including public colleges and universities. Glen Johnson, chancellor of the Oklahoma System of Higher Education, said the Oklahoma State Facilities Energy Conservation program will give the system a plan to build on past successes to further cut its energy bill. Gov. Mary Fallin created the program Tuesday when she signed Senate Bill 1096 into law. It directs all state agencies and higher education institutions to cut their energy costs by at least 20 percent by the year 2020. Brian Ellis, director of facilities management at the University of Oklahoma, said OU began implementing a building efficiency project similar to OSU’s in 2008. That plan includes installing lower-wattage lightbulbs and transformers throughout campus, upgrading heating and air units to run more efficiently and installing automatic sensors that turn off lights when rooms aren’t occupied. Over the summer, OU officials plan to install more than 200 smart meters that will allow them to get useful data on how much energy each building uses.
Quote of the Day
It’s hard for me to imagine a successful economy that’s populated with unhealthy, uneducated individuals who also have to travel down dirt roads populated with criminals.
–UCO Business Dean Mickey Hepner, debating Arthur Laffer over proposals to eliminate the state income tax.
Number of the Day
70 percent
Percentage of Oklahomans who said an “educated and well trained workforce” is the best way to attract businesses to locate and invest in Oklahoma, compared to just 21 percent who said “low personal income tax rates”
Source: Global Strategy Group
See previous Numbers of the Day here.
Policy Note
Climbing the economic ladder? Think North and East
Where do you have the best chance of climbing the economic ladder? Try New Jersey or Maryland. Just don’t go to Oklahoma or South Carolina. Residents of eight states, primarily in the Northeast and Mid-Atlantic, have the best shot of moving on up, according to the Pew Economic Mobility Project, which just released what it calls the first state-level study on the subject. The project looked at three different measures of economic mobility over a 10-year span: –Absolute mobility, which examines residents’ average earnings growth over the period. –Relative upward mobility, which looks at the share of residents in the bottom half of the national earnings distribution who move up at least 10 percentiles. –Relative downward mobility, which measures the percent of residents in the top half of the national earnings distribution who move down at least 10 percentiles. The study focused on Americans born between 1943 and 1958 and measured their earnings when they were age 35 to 39 and again when they were age 45 to 49. Maryland, New Jersey and New York performed better than the national average on all three measures, while Connecticut, Massachusetts, Pennsylvania, Michigan and Utah had two measures that beat the national average. On the flip side, Louisiana, Oklahoma and South Carolina had worse mobility on all three measures.
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