March 10, 2016

 DEADLINE WEEK:

• The Senate continues to lead the discussion of real reforms at the Capitol.
  • The full Senate approved: 273 bills
  • The House approved 296 bills

 

EDUCATION AND CORRECTIONS SUPPLEMENTAL

• We’re not taking this issue lightly. We understand next year’s budget situation could be worse
• But the Rainy Day Fund is there for financial emergencies, and right now it’s pouring outside
• It was the right thing to do to provide supplemental funding for education and corrections.
  • $51 million for EDU
  • $27.5 million for CORRECTIONS
• PPT statement: “The Rainy Day Fund is there for emergencies and right now it’s pouring in Oklahoma. Because of the severe downturn in the energy industry, the state has gone through two revenue shortfalls that meant significant cuts to funding for common education and the Department of Corrections. Tapping the Rainy Day Fund is the right way to lessen the impact of these cuts on students and teachers, and prevents dramatic cuts at prisons. I appreciate the Governor and Speaker for working with the Senate on a plan to help protect these core functions of government.”
• The Senate had been looking at options, including Rainy Day Fund, to lessen the impact of FY16 cuts. The Senate is glad the House and Governor agreed with this option
  • EDU: these supplemental funds will help lessen the impact on students and teachers. It provides certainty and lets schools make it through this year without resorting to 4-day school weeks, laying-off teachers and staff, or other drastic measures
  • CORRECTIONS: supplemental ensures the DOC can make it through this year without furloughing prison guards or making other draconian cuts
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BUDGET

• The budget crisis is not a result of financial mismanagement by Republican leaders.
• Oklahoma is in a budget crisis because the energy industry is suffering. Gross production tax collections are down. Oil and gas activity is down so sales tax collections are down, and layoffs are occurring impacting income tax collections.
  • US rig count is 489, just one more than the lowest level since at least 1968
  • OK rig count 70, lowest level since 2009 – state level is down 67 percent since 2014
  • Approximately 13,500 Oklahoma jobs tied directly to oil/gas have been eliminated
• Unfortunately, we can’t even be sure the problem won’t get worse by June
  • Experts/ estimates have been wrong – latest numbers were 19 percent off estimates
  • Possibly means FY17 certification numbers could be off – could have a built in revenue failure
• Unfortunately, things likely won’t improve for next year’s budget. That’s why we have to get serious about real reforms:
  • Consolidations and eliminating inefficient programs
  • tax credit reform and reforming how “off-the-top” money is appropriated
• To solve this year’s budget crisis, and to help us better manage and avoid future budget problems, we’re going to have to get serious about real reforms:
  • Consolidations and eliminating inefficient programs
  • tax credit reform and apportionment and “off-the-top” money reforms
• We have to find more efficiencies, savings and reforms to squeeze every penny possible to help us craft a balanced budget that protects core services like education, public safety and transportation
• AVOIDING FUTURE BUDGET SHORTFALLS:
  • By a 46-1 vote, the Senate approved SJR 44 by Sen. Holt which will let Oklahomans vote on a proposal to increase savings in the Rainy Day Fund by measuring the current 15 percent cap on the state’s Rainy Day Fund against the total state budget of approximately $24 billion.
  • As a state depending on energy, we’ve been through booms and busts. This measure, if approved by voters, will allow Oklahoma to save more money when times are good to help the state better weather the times when our finances are suffering
• PROVIDING MORE TRANSPARENCY IN THE BUDGETING PROCESS:
  • The Senate approved SB 1342 by Sen. Treat requires federal funds to be included on the state’s public website of all state expenditures.
  • There is a tremendous amount of federal money flowing into the state. But there’s not a lot of transparency
  • Oklahoma currently receives nearly $7 billion in federal funds each year. That’s more than the entire annual state budget.
  • More transparency in federal funds will provide a more complete of all the funds agencies receive – both state and federal – as we draft a state budget

 

TAX REFORM

• It’s right for the Legislature to examine tax credits
  • The people expect us to analyze government programs – eliminate wasteful/inefficient programs
• The state hands out $1.7 billion annually in tax credits and incentives
• That’s why we need to look at each to make sure they are living up to their promise
• Not eliminating all tax credits – keeping those that work and are getting a good return on investment
  • Historic preservation
  • Aerospace engineers
• The Legislature merely reviewing tax credits shouldn’t scare away businesses
• Senate Republicans want to keep our promise of keeping taxes low in order to attract more jobs and investment, and allow Oklahomans to keep more of their hard-earned money

 

EDUCATION

• Education is a top priority for Senate Republicans, even during challenging budget times.
• We’ve tried hard to protect Common Ed and Higher Ed from severe budget cuts other agencies have experienced
• Since 2009, most agencies have seen 20-30 percent cuts to their budgets; some have seen cuts as high as 80 percent
  • Common Ed funding cuts: 1.85 percent
  • Higher Ed funding cuts: 7.35 percent
• Cutting education budgets is not where we want to be, but our efforts to shield education from deep budget cuts that every other agency has seen shows our support of students, teachers and parents in this core government function.
• EMPOWERING LOCAL SCHOOLS TO INNOVATE:
  • The Senate approved SB 1187 that amends the Empowered Schools and School Districts Act of 2010, which passed with a bipartisan margin and was signed into law by Gov. Henry.
  • The measure empowers local schools to operate like a charter school provided they chose to.
  • There are hurdles to cross before that can happen:
    • The locally elected school board must decide to create an empowerment school
    • 60 percent of local teachers must vote to approve it
    • and the state Board of Education must approve the plan.
  • Republicans believe parents, teachers and local school officials know what’s best for students.
  • This measure allows local parents, teachers and school officials to pursue innovative models to improve their ability to educate students.

 

REPEALING THE BLAINE AMENDMENT FROM THE OKLAHOMA CONSTITUTION

• Article II, Section 5 of the Oklahoma Constitution (known as the Blaine Amendment) was cited by the Oklahoma Supreme Court in its rationale in ordering the removal of the Ten Commandments monument from the Capitol grounds
• That ruling could have a significant impact on Oklahoma beyond the removal of the monument from the Capitol
• The court’s ruling threatens millions of dollars in state aid to religiously affiliated hospitals (Baptist, Mercy, St. John’s, St. Anthony’s, etc), child care centers, schools that cater to children with special needs, and students who use state scholarships (Oklahoma’s Promise) to attend religiously affiliated schools
• The Senate approved SJR72 by Sen. Standridge this week. It’s time for the Blaine Amendment to be repealed from the Oklahoma Constitution to protect these important programs and SJR72 will give the people the chance to their say.

 

PUBLIC SAFETY

• The Senate approved SB 1561 by Sen. Shortey that would merge the state’s law enforcement agencies into a single agency
• The measure creates the Oklahoma Department of Law Enforcement (ODLE) and brings three separate law enforcement agencies under one umbrella, merging them into four divisions reporting to a single superintendent who will have supervisory authority over the agency.
  • Oklahoma Highway Patrol (uniformed division)
  • Oklahoma Department of Public Safety (administration and support division)
  • Oklahoma State Bureau of Investigation (investigative division)
  • Oklahoma Bureau of Narcotics and Dangerous Drugs Control (narcotics division)
• Our law enforcement agencies do a tremendous job currently, but merging them into a single agency will increase efficiencies, reduce overhead, save tax dollars, and allow them to share resources
• Public safety will be enhanced too by allowing agencies to share resources, expertise and intelligence to help bolster their efforts to fight crime and protect the public.
• This is an example of the Senate leading the discussion on reforming and transforming state government to operate more efficiently and to ensure taxpayer dollars are used as wisely as possible.

 

NEWS OF INTEREST:

Off the mark? Economists and state leaders worry about budget forecast

OKLAHOMA CITY – Economists and lawmakers aren’t sure the $5.85 billion estimate given to lawmakers to draft the next budget is accurate. Senate President Pro Tem Brian Bingman has said no one knows if the estimate will hold or if the state will have to endure another year of budget cuts. “We haven’t stopped bleeding yet,” Bingman said in his weekly meeting with reporters March 4. “As these revenue cuts occur, we’re starting to question the certification number for next year.” If the falling price of oil or its effects haven’t leveled off, the certification approved in early February may not be sound, he said. The state budget must be constructed based on the February certification, and there will be no more official estimates offered. http://journalrecord.com/2016/03/08/off-the-mark-economists-and-state-leaders-worry-about-budget-forecast-capitol/

About 1 in 80 Tulsans work at Wal-Mart — and those employees just got a raise

Three weeks ago, Donna Payan, 21, and Kayla Thompson, 18, made $9 an hour at the recently reopened Wal-Mart Supercenter on Admiral Place. They now make $10 and are among the 12,000 workers in the Tulsa area who will see world’s largest retailer’s nationwide pay hike reflected in their checks for the first time Thursday. The raise is a significant boost for mostly stagnant wages in the largest part of the workforce: the retail sales clerk — which describes about 50,000 people in Oklahoma, according to the state’s employment security commission. About 70 percent, or 34,016, of those people work at one of the 134 Wal-Mart stores that cover the state. A wage increase at Wal-Mart means a significant boost for the lower middle-class. http://www.tulsaworld.com/business/employment/about-in-tulsans-work-at-wal-mart-and-those-employees/article_7246fa51-7606-55ab-acba-709685461e61.html

Oklahoma flirted with recession last year

The dreaded R-word almost made an appearance last year in Oklahoma. Oklahoma’s economy was close to teetering into a recession in the third quarter as energy woes made economic growth among the weakest in the states, according to the latest figures released last week by the U.S. Bureau of Economic Analysis. The state managed to eke out growth of 0.1 percent in gross domestic product from July to September. That put it in the company of 46 other growth states, but the anemic expansion topped only North Dakota, West Virginia and Alaska. The third-quarter performance came on the heels of a 2.4 percent contraction in Oklahoma’s GDP in the second quarter of 2015. Oklahoma posted the worst performance of any state that quarter. Although there’s no official definition, recessions are typically characterized by two consecutive quarters of contraction in economic growth. http://www.oklahoman.com/article/5483185?embargo_redirect=yes

Ignoring savings in the face of giant budget shortfall

CONTRASTING state budget challenges with lawmakers’ unwillingness to consider even modest cost-saving proposals at poor-performing dependent school districts, Oklahomans may wonder if there’s ever a financial crisis so dire that legislators will prioritize efficiency over status-quo spending. Lawmakers face a $1.3 billion shortfall this session. Oklahoma has more than 500 school districts, far more than in other states of comparable size. It’s long been obvious that administrative streamlining could save money. This would not require closing any school sites, but would free up funds for more productive use elsewhere in schools. When Oklahoma Watch reviewed U.S. Census Bureau data for the 2011-12 school year, Oklahoma ranked sixth-highest in the percentage of funds spent on district administration. Given that Oklahoma typically ranks among the bottom 10 states on most academic measures, that high ranking for administrative spending is not an indicator of success. http://newsok.com/article/5482844