OKPOLICY.ORG
What’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.
This Week from OK Policy
A thoughtful approach to the end of the public health emergency will mitigate coverage lapses: As the end of the public health emergency approaches (which could be as soon as mid-July 2022), the Oklahoma Health Care Authority (OHCA) has taken several steps to help eligible enrollees maintain coverage when the public health emergency ends. Many of Oklahoma’s outdated electronic data systems make more streamlined renewals impossible, and the state should commit to updating and improving those systems in the future. [Emma Morris / OK Policy]
Policy Matters: It’s not enough to just listen: In order to fully connect with folks with different life experiences from our own – who are brave enough to share their truths – it’s not enough simply listen. We have to believe what they’re saying, even when those truths may run counter to our own experiences. Too often, people listen to these life stories but fail to believe them “because too much of what I’m invested in is threatened if you’re telling the truth.” [Ahniwake Rose / The Journal Record]
Upcoming Opportunities
Together Oklahoma is excited to announce three upcoming chapter meetings in Comanche County, Grady County, and Stephens County, where residents can learn how the organization works to help put power back in the hands of everyday Oklahomans, as well as the chance to connect with fellow advocates in the community. [Learn More]
Weekly What’s That
Balanced Budget
Oklahoma’s Constitution requires that the state’s annual budget be balanced. The balanced budget requirement is accomplished by limiting appropriations for seven funds, of which the General Revenue Fund is by far the largest, to no more than 95 percent of certified revenue estimates for the upcoming year. This allows for a 5 percent cushion in case of a revenue shortfall. If General Revenue collections fall below 95 percent of the certified estimate, the Director of the Office of Management and Enterprise Services declares a revenue failure and reduces funds going to agencies by however much is necessary to bring spending into balance with revenue collections. If General Revenue Fund revenue exceeds the 95 percent level, the 5 percent cushion flows into the Cash Flow Reserve Fund and can be appropriated in the future. If General Revenue collections exceed 100 percent of the certified amount, the surplus flows into the Constitutional Reserve Fund, also known as the Rainy Day Fund.
Look up more key terms to understand Oklahoma politics and government here.
Quote of the Week
“If you check the box (on a job application) that you have some something on your record, you’re only 50% likely to be called back and even less likely than that to get a job.”
– Rep. Nicole Miller (R-Edmond), speaking about a new law designed to help Oklahomans with criminal records attain a clean slate. HB 3316 was approved by the legislature with bipartisan support and signed by the Governor this week. [The Oklahoman]
Editorial of the Week
State must bolster financial oversight, accountability
Just days after Gov. Kevin Stitt sued Swadley’s Bar-B-Q restaurants over questionable spending, an investigative story uncovered another problematic contract that has attracted federal auditors.
A list is forming of trouble-plagued state vendor contracts, especially those tied to the pandemic. It includes $5.4 million for PPE that never arrived, $2.6 million for hydroxychloroquine that remained shelved, and a pandemic center with a rocky and late opening.
Journalism nonprofits Oklahoma Watch and The Frontier published a story this week examining the spending of the Governor’s Emergency Education Relief fund, which came from the federal CARES Act.
Stitt had about $40 million and created five programs. One, called Stay in School, put $10 million toward private school vouchers. Another was Bridge the Gap to provide $8 million to low-income families for school supplies, tutoring, technology or curriculum.
At the time, we disagreed with Stitt’s decision to shore up private education, which benefited about 0.02% of all Oklahoma school-age students. It remains an ineffective use of funds intended for a greater reach.
Now it appears that Bridge the Gap was fraught with problems. The journalism nonprofits found that more than half a million dollars was spent on items like car stereo equipment, televisions, coffeemakers, pressure washers, exercise gear and smartwatches.
In addition, $3 million was returned to the federal government because it wasn’t spent in time.
A federal report says there was a lack of oversight on spending and possible violations of federal grant and state purchasing requirements. Auditors are now investigating how Stitt’s administration awarded the contract and issued the money.
Some of those answers are known. The no-bid, single-source contract with Florida-based ClassWallet to oversee the Bridge the Gap distribution was secured by Ryan Walters in the months before he was appointed by Stitt as secretary of education.
Walters was executive director of the nonprofit Every Kid Counts Oklahoma. The funds were supposed to flow through the nonprofit to the contractor due to a federal rule prohibiting states from giving money directly to families. That pass-through didn’t happen, according to the story.
As education secretary, Walters oversaw the project. When the vendor asked for clarification on approved items, an email from Walters said to give “blanket approval with vendors on your platform.” That was a lost opportunity to provide guidance and supervision.
In response to the story, Stitt has notified ClassWallet that he intends to pursue damages for any contractual or legal failings, pledging to recoup misused funds. The contractor blames state officials for not setting limits.
Stitt shows that he will go after vendors for misappropriated money, and that’s good. But it’s always more difficult to recover funds after the damage is done.
Oklahoma may get back some or all of the funds. But a pattern is emerging that shows a need to bolster oversight and hold responsible the state officials who fail to do that.
Numbers of the Day
- 61% – For Oklahomans in the middle 20 percent of earners, HB 3350 would cut their taxes by an average of $61 per year, while Oklahomans in the lowest 20 percent of earners would get a tax cut of about $4. The wealthiest one percent of Oklahomans would receive an average tax cut of more than $2,000 annually. [Oklahoma Policy Institute]
- 65% – Nearly two-thirds (65%) of the benefit will go to the top 20 percent of earners under the tax cut proposed in HB 3350. [Oklahoma Policy Institute]
- 1 day – The tax cut in HB 3350 would provide more money in 1 day to the top one percent of earners than it would to the lowest 20 percent of earners in an entire year. [Oklahoma Policy Institute]
- $204 million – In 2025, the tax cut in HB 3350 will mean $204 million less in the General Revenue Fund (GRF) and $20 million less in the 1017 Fund. While the cut to the GRF would be spread out across agencies (many of which are already underfunded), Oklahoma’s schools would be directly impacted by this lost revenue because public education in Oklahoma is primarily funded by the GRF and the 1017 Fund. [Oklahoma Policy Institute]
- $2,043 – For Oklahomans in the wealthiest one percent of earners, HB 3350 would cut their taxes by about $2,043 per year. Middle-class Oklahomans would get a tax cut of about $61, while Oklahomans in the lowest 20 percent of earners would receive an average tax cut of $4. [Oklahoma Policy Institute]
What We’re Reading
- Here’s Why Cutting Gas Taxes Doesn’t Work When Prices Soar [Governing]
- Yes, US economy may be slowing, but don’t forget it’s coming off the hottest year since 1984 – here’s who benefited in 4 charts [The Conversation]
- Tax Cuts’ Drain on Revenues Would Stifle Oklahoma’s Economic Growth [Center on Budget and Policy Priorities]
- Five Reasons Why States Should Proceed with Caution Despite Soaring Revenues [Tax Policy Center]
- How Post-Pandemic Tax Cuts Can Affect Racial Equity [Urban Institute]
