In The Know: State Finance leader says Oklahoma should reconsider drilling tax breaks

In The KnowIn 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. You can sign up here to receive In The Know by e-mail.

Today you should know that Governor Fallin’s chief budget official said it’s time for Oklahoma to reduce growing tax breaks for oil and gas drilling. An association representing drilling companies responded by saying the tax breaks aren’t tax breaks, but are “tax provisions.” Oklahoma Policy Institute previously released a report on why these tax breaks are unnecessary and unaffordable, and polling shows that a large majority of Oklahomans prefer to eliminate the tax breaks to better fund core services.

Gov. Mary Fallin has asked state Auditor and Inspector Gary Jones to audit the Oklahoma Corrections Department and assess the department’s current structure. A commentary by Pat McGuigan questions the sustainability of Oklahoma’s policies of high incarceration and growing private prisons. OK Policy previously released a report laying out action items for real reform of Oklahoma criminal justice system. David Blatt’s Journal Record column looks at how the Leavitt Report creates a path forward for an Oklahoma Plan to meet the needs of the uninsured.

The OK Policy Blog shares the fourth post in our series on Oklahoma’s Opportunity Gap, which discusses why you need money to make money. A Republican legislator lashed out at Gov. Fallin over her moves to create a task force to assess the Grand River Dam Authority. Gov. Fallin is claiming an executive privilege to hide records that reveal political considerations behind her decisions on state policy. House Speaker T.W. Shannon named a Chesapeake executive, a former Republican legislator, and the Norman Chamber of Commerce President to a commission charged with managing state buildings and assets.

The Number of the Day is Oklahoma’s rank nationally for households 50 years or older that own their homes free and clear. In today’s Policy Note, Princeton economist Uwe Reinhardt shows how opponents of the Affordable Care Act are deliberately confusing the public about the law will affect Americans.

In The News

State should reconsider drilling tax breaks, Doerflinger says

A high-ranking state official said tax breaks for oil and gas drilling held back more robust growth of the state’s general revenue fund in the last fiscal year, adding that legislators should examine the effect those breaks have on the state. A $248 million gain in income and sales tax to the general revenue fund helped blunt a $208.9 million drop in oil and gas collections in fiscal year 2013 compared to the last fiscal year, according to information from the Secretary of Finance and Revenue Preston Doerflinger. Fiscal year 2013 ended June 30. Doerflinger said that the drop in gross production tax revenue is from the effect of a 2010 law on how horizontal and deep wells are taxed.

Read more from the Tulsa World.

See also: Energy producer lobby says horizontal drilling tax breaks aren’t tax breaks from Oklahoma Energy Today; Unnecessary and Unaffordable: The Case for Curbing Oklahoma’s Oil and Gas Tax Breaks from Oklahoma Policy Institute; Poll shows Oklahoma voters strongly oppose tax breaks for horizontal drilling from the OK Policy Blog

Governor requests audit of Oklahoma Corrections Department

Gov. Mary Fallin has asked state Auditor and Inspector Gary Jones to audit the Oklahoma Corrections Department and assess whether the department’s current structure “is in the best interests of the taxpayers of Oklahoma.” “I hereby request that your office conduct an investigatory, operational and performance audit of the Oklahoma Department of Corrections,” Fallin said in a letter received Monday by the auditor. The state auditor said it is routine for the governor to request an audit during a change in leadership at a state agency. Recent events surrounding the Corrections Department have been anything but routine.

Read more from NewsOK.

Pat McGuigan: Prison policies must change

A new study from “Anonymous Analytics” takes on the issue of over-incarceration and devotes critical attention to Corrections Corporation of America, one of the largest firms in the private prison industry. Although laced with editorial commentary, the analysis accurately notes that the U.S. prison population peaked in 2009, then moderated as crime rates declined and more states moved away from lengthy incarceration of the non-violent. The new study is the latest installment in the years-long struggle to awaken both budgetary scrutiny and moral indignation when it comes to unsustainable government prison policies.

Read more from CapitolBeatOK.

See also: Action Items for Oklahoma: Criminal Justice from Oklahoma Policy Institute

Prosperity Policy: A path forward

With their unwavering opposition to anything associated with Obamacare, Gov. Mary Fallin and legislative leaders have painted themselves into quite a corner this past year with regards to providing health care coverage for the state’s lowest-income residents. The federal government is offering 100-percent federal funding for three years, and at least 90 percent after that, to expand Medicaid to adults in poverty. Saying no leaves some 200,000 vulnerable Oklahomans without coverage and misses a golden opportunity to boost the health status of low-income workers while helping health care providers reduce mountainous uncompensated care costs.

Read more from the Journal Record.

Closing Oklahoma’s opportunity gap: Why you need money to make money

This is the fourth post in a running series based on our recent report, Closing the Opportunity Gap: Building Equity in Oklahoma, which assesses the racial wealth gap and proposes solutions for closing that gap through asset-building. Previous posts explored historical roots of the gap and detailed disparities in foundational assets (health, education, transportation) and generative assets (employment and income). This post assesses disparities in regenerative assets, a critical component of building economic security over a lifetime, because they provide Oklahoma families with a wealth base that generates income independent of their labor and savings to fall back on in emergencies.

Read more from the OK Policy Blog.

GOP lawmaker criticized Fallin over GRDA panel formation

A Republican legislator lashed out at Gov. Mary Fallin on Wednesday, comparing her at one point to President Barack Obama and suggesting that her use of taxpayer-funded business incentives amounts to bribery. Speaking at a GRDA board meeting Wednesday, Cox’s remarks were in response to Fallin’s order on Monday creating a 15-member GRDA task force whose members will be appointed by Fallin. Cox said the GRDA employs 500 people in northeastern Oklahoma – including Cox’s son – at no cost to taxpayers, while “the governor will spend tens of millions of dollars of taxpayer money … to basically bribe companies to come to Oklahoma.”

Read more from the Tulsa World.

Fallin claims political influences on state policy should be kept secret

Gov. Mary Fallin is claiming an executive privilege to hide records that reveal political considerations behind her decisions on state policy. Included would be documents telling Fallin “who might be supportive of certain policy agendas in the legislature, both now and in the future, whether such support would exist after an upcoming election, and whether facts exist to help persuade the legislatures and others to support the governor’s agenda,” according to the formal response to an Open Records Act lawsuit against the governor.

Read more from FOI Oklahoma.

Speaker taps 3 to oversee Capitol repairs, state buildings plan

House Speaker T.W. Shannon has named three members to a commission to oversee a $120 million renovation of the state Capitol. The Lawton Republican announced Wednesday the appointments of Chesapeake Oilfield Services CEO Jerry Winchester, former Claremore Republican state Rep. Tad Jones, and Norman Chamber of Commerce President John Woods to the Long-Range Capital Planning Commission. Besides overseeing the Capitol overhaul, the nine-member commission is charged with developing an 8-year plan for the management of state buildings and assets.

Read more from NewsOn6.

Quote of the Day

Any fiscally responsible policymaker needs to seriously consider at what level government should incentivize something that is now standard practice. It’s not responsible for government to give money away as an incentive if no incentive is needed.

-Oklahoma Finance Director Preston Doerflinger, who said Oklahoma should end a tax break for horizontal drilling that has grown to cost hundreds of millions (Source:

Number of the Day


Oklahoma’s rank nationally for households 50 years or older that own their homes free and clear; 45 percent of such households in the state are without a mortgage

Source: AARP

See previous Numbers of the Day here.

Policy Note

Confusing the public on the Affordable Care Act

In my previous post I explained that general statements on the probable impact of the Affordable Care Act on the pocketbooks of Americans often do not make sense and can be quite misleading. My point can be illustrated with a recent news release from the Ohio Department of Insurance, “Health Insurance Costs to Increase Significantly Under Affordable Care Act.” The department states that it “released the information today to help health insurance consumers continue to prepare for the expected price increases.” It offers a one-sided perspective.

Read more from Economix.

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Gene Perry worked for OK Policy from 2011 to 2019. He is a native Oklahoman and a citizen of the Cherokee Nation. He graduated from the University of Oklahoma with a B.A. in history and an M.A. in journalism.

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