Oklahoma Politics: May 2016 Archives

Oklahoma Governor Mary Fallin, Senate President Pro Tempore Brian Bingman, and House Speaker Jeff Hickman have announced a budget agreement. Under the plan, total appropriations for the 2016-2017 fiscal year (FY17) will be $6,778,186,009, down about 1% from the revised FY16 appropriation of $6,845,994,842, and down about 5% from the original FY16 appropriation of $7,138,920,573.

The State Department of Education, which supplements local funding for K-12 education, saw a slight increase of 0.62% over last year's revised appropriation. The proposed FY17 appropriation is $2.426 billion.

Many agencies took a 7% cut for FY16, a response to the revenue failure declared mid-year, and many of those took a further 5% cut, for a compounded reduction of 11.65% from the original FY16 appropriation to the proposed FY17 appropriation.

Keep in mind that these numbers represent appropriations out of the general fund and do not include earmarked funds. For example, the Insurance Commissioner's office will have a $0 appropriation for FY17, but it will be funded by earmarked revenues relating to its regulatory responsibilities.

John Tidwell, director of Americans for Prosperity Oklahoma, said that the outcome, though not ideal, met AFP's two principal aims for this session -- no Obamacare Medicaid expansion, no tax rate increases:

OKLAHOMA CITY -- AFP Oklahoma applauded the announcement by state officials today that a budget agreement had been reached to fill the state's $1.3 billion budget hole, with no plans for expansion of Medicaid through investment in Obamacare or through tax rate increases."

"We are extremely pleased that the House, Senate, and the Governor were able to come together and reach an agreement to resolve our budget shortfall without raising tax rates and without expanding Medicaid through Obamacare," said AFP State Director John Tidwell. "AFP conducted an outreach initiative to hundreds of thousands of citizens across the state to oppose the OHCA's "Rebalancing" plan to expand Medicaid, through volunteer grassroots efforts, as well radio, digital, and print media. As a result, thousands of Oklahomans reached out to their elected officials through letters, emails, and phone calls, to let them know that they opposed Obamacare's Medicaid expansion and the tax increases proposed to pay for it."

The Oklahoma Health Care Authority proposed a plan earlier this year, the Medicaid Rebalancing Act, to expand Medicaid through the Affordable Care Act. A House bill containing the plan was assigned to a conference committee earlier this month to be weighed by legislators, but was not heard. A cigarette tax increase was proposed to fund the "Rebalancing" plan, but failed on the floor of the state House of Representatives.

"While in a tough budgeting year like this one, it is certain that no one got everything they wanted. But our organization is very satisfied that the agreement achieved our two biggest objectives: no tax rate increases and no Medicaid expansion." said Tidwell. "AFP has led the fight against Medicaid expansion in Oklahoma and in states across the country, since the passage of Obamacare. We are pleased to have stood with a strong coalition of organizations in opposition to Medicaid expansion here in the state and to ultimately get this important policy victory from state legislators."

After the jump, you'll find the press release from the Governor's Office.

RESOURCES:

Oklahoma FY17 budget agreement summary (PDF)
Excel spreadsheet showing the FY17 budget agreement by agency.

This press release from a group of 24 conservative Republican members of the Oklahoma House seems like a common sense solution, so it's hard to understand why all Republicans haven't signed on to it. This group is to be commended for putting taxpayers and teachers ahead of special interests.

Group of lawmakers steps out for a teacher pay raise, while protecting constituents from tax increases

OKLAHOMA CITY - Over 20 members of the Oklahoma House of Representatives, representing all four quadrants of the state, stood together today in support of providing a $5,000 pay raise for all classroom public school teachers statewide and protecting hardworking Oklahomans - including teachers - from tax increases.

The estimated cost to give the 42,027 classroom teachers in Oklahoma a $5,000 raise would be $245 million. The House members want the $5,000 pay raise to take effect this August.

Furthermore, the group of House members are vehemently opposed to the statewide ballot measure proposed by University of Oklahoma President David Boren that raises the sales tax on all Oklahomans. The ballot measure, if passed, wouldn't take effect until school year 2017-18, which is 18 months away.

Additionally, estimates suggest the Boren tax plan would increase tax collections over $600 million, with 20% going into the guarded coffers of Higher Education.

State government is facing a major budget shortfall, in large part because of falling oil prices, but Oklahoma families are facing budget shortfalls in their own homes. Over 20,000 Oklahomans have lost their jobs directly because of forced reductions in the state's energy sector.

"The people in every area of state government, us included, have to make hard decisions and prioritize the dollars available just as thousands of Oklahoma families are being forced to tighten their belts," the group said.

The group did, however, emphasize that core services--including Medicaid and common education--can be fully funded while also providing a $5,000 pay raise for all classroom teachers while also avoiding tax increases on hardworking families. "This requires extraordinary fiscal discipline, but we can do it," the group said.

The group of 24 members of the Oklahoma House of Representatives were:

Rep. Scott Biggs - R, Chickasha
Rep. David Brumbaugh - R, Broken Arrow
Rep. Kevin Calvey - R, Oklahoma City
Rep. Bobby Cleveland - R, Slaughterville
Rep. Josh Cockroft - R, Wanette
Rep. Jeff Coody - R, Grandfield
Rep. David Derby - R, Owasso
Rep. Dan Fisher - R, El Reno
Rep. Randy Grau - R, Edmond
Rep. Elise Hall - R, Oklahoma City
Rep. George Faught - R, Muskogee
Rep. John Paul Jordan - R, Yukon
Rep. James Leewright - R, Bristow
Rep. Sally Kern - R, Oklahoma City
Rep. Lewis Moore - R, Arcadia
Rep. Tom Newell - R, Seminole
Rep. Terry O'Donnell - R, Catoosa
Rep. Scooter Park - R, Devol
Rep. John Pfeiffer - R, Orlando
Rep. Michael Rogers - R, Broken Arrow
Rep. Mike Ritze - R, Broken Arrow
Rep. Mike Sanders - R, Kingfisher
Rep. Chuck Strohm - R, Jenks
Rep. Ken Walker - R, Tulsa

From what I gather, legislative leaders and Gov. Fallin are seeking support for an assortment of fee increases and new taxes to close the budget deficit and give teachers a raise, rather than implement the billions in specific budget saving ideas that OCPA and other groups have recommended for years. It's public choice theory in action: Legislators see it as politically safer to increase the tax burden on everyone (diffuse costs) than to eliminate a vocal group's favorite tax credit or program (concentrated benefits). Conservative Republicans won't cooperate with tax hikes on principle; the tiny Democrat minority won't support the tax hikes because it eliminates a campaign issue for the fall.

State Rep. Jason Murphey, R-Guthrie (may his tribe increase!), writing about one revenue enhancement under consideration, a tax on services, says implementing a new tax is immoral, because it forces Oklahoma families to work longer hours to support the government.

It's an extremely short sighted move. Everyone loses when government creates new taxes and increases the tax burden on the public.

It's not hyperbolic to suggest that the federal, state and local governments, and their many related entries are now taking half of your income through ever increasing direct taxation, overpriced services, fees and regulation, and the many hidden costs which are passed on to you in some form.

This cost is wreaking havoc upon society.

The cost of government has become major facet in the decline of families. It places tremendous financial stressors upon families, forces both parents to work full time jobs and takes their focus away from their children.

Society is paying a terrible price; and, so is the government. The cost of the education system, human services, public safety and corrections will only continue to skyrocket as family values continue to come under pressure and government does even more harm to the ability of Oklahomans to focus on their families.

Though the tax increases might provide more money to government in the short term; the long term cost will haunt society.

When politicians approve new taxation they contribute to this great immorality.

As I have thought through these matters, I have determined to never be a party to this immorality.

Instead of supporting tax increases I have been convicted of the importance of eliminating the practices within government that continue to waste million of dollars every year.

The enactment of the tax increases will only serve to protect this waste and inefficiency.

It would do us all good to look back at tax rates and budget levels of the past and ponder why government is taking an increasing share of our income for lower levels of public service. When I was a kid, the state sales tax rate was 2%, same as it had been since 1936. Gas tax was 6.58 cents / gallon, unchanged since 1949.¹

In 1983, the Democrats then running state government wanted to fix a massive shortfall (due to a downturn in the oil industry) by doubling the state sales tax rate and increasing the gas tax rate by 67%. ² Early the following year, they succeeded in passing a temporary hike in the state sales tax rate, increasing it from 2 to 3 cents on the dollar. ³ That hike was made permanent, and in June 1987, the rate increased again, from 3.25% to 4%. ⁴ In May 1990, the state sales tax rate reached its current level of 4.5%. ⁵ That last hike was part of House Bill 1017, which also included increases in personal and corporate income taxes, and it was supposed to cure our school funding problem for good.

More than nine months after he called a special legislative session to deal with what he called a crisis in Oklahoma education, [Republican Gov. Henry] Bellmon signed into law a sweeping reform bill and $230 million tax package....

"Never again will Oklahoma need to take a back seat in education," Bellmon said to about 300 teachers, lawmakers, parents and students. He called signing the bill "the most pleasurable moment of my political career."

Congratulations and back-slapping preceded and followed the signing, as supporters of the bill celebrated the end of nearly 11 months of battling for reform measures and praised their battle heroes....

Bellmon called the new law a "quantum leap" for Oklahoma education, but said the law itself would not solve the schools' problems without help from educators.

"I challenge our state's educational leaders to use this tool to develop an excellent educational system that will be the envy of our country," he said.⁶

The "incentives for consolidation" were never effective. Prior to passage of HB 1017, Oklahoma had 609 school districts. ⁷ This school year, 26 years later, Oklahoma still has 516 districts, including dependent districts like White Oak in Craig County, Gypsy in Creek County, Greasy in Cherokee County, Fanshawe in Le Flore County, Spavinaw in Mayes County, and Straight in Texas County that serve fewer than 10 students per grade.

No legislator should support a tax increase on ordinary Oklahomans as long as the billionaire owners of a basketball team get tax credits for paying millionaire basketball players.

¹ Young, Jim. "State's sales tax is lowest among those with levies," The Daily Oklahoman, November 24, 1983, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FAD8CAD0A22?p=NewsBank.
² "AN EDITORIAL Enough Is Enough," The Daily Oklahoman, November 28, 1983, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FAE5280DA3A?p=NewsBank.
³ Young, Jim. "New Figures Certified By Equalization Board," The Daily Oklahoman, February 16, 1984, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0ED06FCE110D964E?p=NewsBank.
⁴ Legislative Review," The Daily Oklahoman, May 31, 1987, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB42326298DC5FB?p=NewsBank.
⁵ Greiner, John. "Oil Prices Show Up in State Tax Collections," The Daily Oklahoman, October 10, 1990: 17, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB424E01CDBCB1F?p=NewsBank.
⁶ Johnson, Kay. "Bellmon Signs $230 Million Education Bill," Tulsa World, April 26, 1990: A1, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB54647A0D717B7?p=NewsBank.
⁷ STEINERT, GARY. "A major leap for school reform," Tulsa World, November 13, 1990: 7A, accessed May 19, 2016, http://infoweb.newsbank.com/resources/doc/nb/news/0EB5469190277837?p=NewsBank.

MORE:

In an earlier entry, Rep. Murphey explained how to go about getting an accurate picture of state finances.

Here is a fact realized by only a few: most state spending never goes through the Legislature's appropriation process. In reality, the Legislature appropriates just forty percent of the $17.5 billion of state spend.

With that in mind, I refer the questioner to the follow resource: Oklahoma Comprehensive Annual Financial Reports, or CAFRs. They provide the most comprehensive resource for understanding all state spending (revenue and debt), because they include the many billions of "non appropriated" state government spend.

Here is a link to the Oklahoma Comprehensive Annual Financial Reports from 1994-2015.

A subdued mood prevailed Saturday as 857 delegates convened at FirstMoore Baptist Church for the 2016 Oklahoma Republican Convention. (The 2012 convention drew approximately 1,400 delegates.)

The state convention in a presidential year has a national focus, electing two members of the Republican National Committee, electing 25 at-large delegates and alternates to the Republican National Convention, nominating two electors (and alternates), considering amendments to permanent state party rules, and voting on a state platform, which will be forwarded to the national convention platform committee for their consideration. Once the state convention adjourns, the newly elected national convention delegates caucus to select a delegation chairman and two members each for the national convention platform, rules, credentials, and permanent organization committees.

The presumptive (and presumptuous) Republican presidential nominee scarcely rated a mention. Donald Trump might as well be called Lord Voldemort -- he who must not be named. In her farewell at the conclusion of the convention, State Chairman Pam Pollard urged the delegates to get involved to help defeat Hillary Clinton, Barack Obama, and Bernie Sanders, but wisely omitted any mention of the candidate who presumably will be the victor if they are defeated.

Trump signs and stickers were not much in evidence. Those displaying support for the egotistical oompa-loompa were few and far between.

My report will necessarily be incomplete. I was part of the check-in team, which processed about 600 delegates in a two-hour period, and then stayed to help with wrap-up as a handful of credentials problems were cleaned up. Tulsa-area software developer David Byte put together a solid, almost fool-proof, credentialing front-end and back-end system. Delegates were never kept waiting for more than 5-10 minutes during rare rush periods. A handful of counties had delegates who were issued badges but hadn't been recorded as checked-in, evidently a user error that could easily be guarded against next time. Because I was working at check-in, I missed all of the political speeches, so I couldn't tell you who spoke or what was said. To be honest, when the check-in system was packed up and loaded, I was tempted to call it a day, hop in my car, and head home. But there was important business to be done. Here's a summary of what happened.

Republican National Committee:

Incumbent Carolyn McLarty was re-elected to a third term as National Committeewoman, defeating Linda Huggard by a 75%-25% vote. McLarty is a leader among conservatives on the RNC, a founding member of the Republican National Conservative Caucus, and serves as chairman of the RNC's Permanent Committee on Resolutions. She was an early and enthusiastic endorser of Ted Cruz.

Steve Curry was elected to succeed retiring National Committeeman Steve Fair, defeating Richard Engle by a 60%-40% vote. Curry is chairman of the Oklahoma State Election Board and a former chairman of the Oklahoma County Republican Party. While Curry could be regarded as more of an establishment type, at least in temperament, than his opponent, many grassroots delegates (including myself) regarded Curry as a more trustworthy guardian of party values during a possible Trumpist dark age. Curry was willing to oppose a Trump nomination for RNC chairman; Engle dismissed the idea. Engle's credibility with party regulars was damaged by his eager participation in the 2012 "parking lot convention" -- an attempt by Ron Paul supporters to delegitimize the state convention that had just adjourned, at which the Paulestinians were defeated by a 60-40 supermajority.

Delegates and alternates:

The slate of 25 at-large delegates and at-large alternates was approved by an overwhelming roll call vote. (Attempts to suspend the rules to approve the slate by acclamation were rebuffed by convention chairman Greg Treat. A roll call vote was not taken in 2012, which Ron Paul supporters used as a pretext to challenge the convention's validity.) For the first time since 2004, no alternative slate was put forward. At the 2008 and 2012 conventions, Ron Paul supporters attempted to defeat the executive committee slate in hopes of electing fellow Paulestinians to the National Convention.

The rules have changed to make alternative slates more difficult to accomplish. The slate must be complete, filled out with people who had submitted paperwork to the state party, and with people who gave their consent to be included. By contrast, North Dakota voted on individual delegates, and the Cruz campaign was able to circulate a slate that included some who were on the executive committee slate and some who were not.

Had the Indiana primary turned out differently, we likely would have seen a concerted effort by the Cruz campaign to nominate a slate of loyalists and to turn out their supporters to defeat the executive committee slate and elect their own. With an open convention no longer seen as a realistic possibility and with the Cruz campaign in shutdown mode, that didn't happen.

The executive committee slate was an assortment of party activists and donors, typical of years past, going to Cleveland to be the studio audience for a week-long infomercial -- except that there did seem to be the sense that the delegates need to be prepared to defend against attempts by the Trump insurgency to water down the platform and the grassroots role in the party. The slate included a few vocal Trump supporters and a few committed Cruz supporters, but many in the delegation had endorsed other candidates in the March 1 primary or were silent.

Party rules:

A number of substantial amendments to the permanent state party rules were considered and were defeated. (A few housekeeping amendments were approved.) Party rule amendments must be proposed by a county convention and then approved by the state committee before going to the state convention for approval. The general sense was that the problems the rules intended to solve were better handled by the judgment of party leaders than additional rules and regulations. (Here are the current Oklahoma Republican Party Rules.)

A couple of the proposed amendments addressed the problems created by Republican popularity. Contested primaries are becoming more frequent, with challengers seeking to unseat incumbent Republicans over policy differences. Should party resources, such as voter databases, be equally available to all candidates seeking the GOP nomination or to none at all until the primary is settled? Former Democrats are changing parties to run for office -- how to distinguish between genuine conversions and conversions for political convenience? Should party officials vet candidates based on their views on the issues, such as commitment to pro-life principles? Here are each of the proposals. Only the housekeeping amendments were approved.

From Cleveland County: Clarifying that state committee meetings may be called for a location other than Oklahoma City.
From Cleveland County: Cleaning up sex-specific language about filling vacancies in party offices. Sex-specific quotas in state party offices were removed several years ago.
From Cleveland County: More cleanup of moot sex-specific language.
From Cleveland County: Removal of sex-specific language regarding executive committee appointments.
From Cleveland County: Clarifying budget committee appointments.
From Cleveland County: Clarifying that the highest-ranking Republican in each house is a member of the executive committee, aligning the rule with actual practice. (The rule previously specified the "floor leader" in each house, which is not the highest-ranking member when the party is in the majority.)
From Muskogee County: Cleaning up sex-specific language in several rules, largely duplicating several of the Cleveland County proposals.
From Tulsa County: Cleaning up sex-specific language in several rules, largely duplicating several of the Cleveland County proposals.
From Wagoner County: Adding several causes for removal specific to the state chairman and vice chairman, relating to involvement in a Republican primary. (Defeated.)
From Cimarron and Kay Counties: Forbidding Oklahoma GOP conventions and meetings from being held in a gun-free zone. (Defeated.)
From Cimarron and Kay Counties: Creating a pro-life committee, made up of one member from each county, to vet candidates for pro-life views prior to providing them with funding or support from the party. (Defeated.)
From Cimarron County: Prohibiting political lobbyists from participating in the Oklahoma Republican Party State Convention Process. (Defeated. It was pointed out that Tony Lauinger, head of Oklahomans for Life and a tireless lobbyist on his own dime for pro-life legislation, would be banned from the convention under the rule.)

Platform:

This year's platform committee was dominated by delegates from Oklahoma County, and it proposed a one-page statement of principles, followed by a handful of specific resolutions. The platform approved in 2015 was 25 pages long, and while many delegates agreed that the platform needs to be cleaned up and pared down, the two-page proposal was a Procrustean solution. A clear statement of principles is a good thing, but grassroots Republicans want to speak as a body on specific issues, as evidenced by the many individual platform planks proposed by precinct caucuses. The 2016 state platform committee seemed to discard all of that passion and hard work. A majority of delegates voted viva voce to postpone the 2016 platform indefinitely, killing the proposal and leaving the 2015 platform in place. The 2015 platform will be forwarded for consideration by the national platform committee.

Delegation meeting:

The at-large and district delegates elected Cruz supporters to both slots on the national platform committee (a job that requires an additional week's stay in Cleveland before the convention), to both slots on the permanent organization committee (which selects the convention chairman, parliamentarian, and secretary and sets the order of business -- normally non-controversial but possibly contentious this year), and to one of the two slots on the rules committee.

In his Tuesday blogpost, Trent England of the Oklahoma Council of Public Affairs answers seven questions about "Medicaid Rebalancing", a proposal currently before the Oklahoma legislature. It is an attempt at passing the Obamacare Medicaid expansion, previously rejected by Oklahoma under a different guise, for a short-term benefit (extra federal money in the short term), while ignoring the long-term costs (increased state spending in the long term as the federal subsidy dries up and more people sign up than expected). Lawmakers pushing this plan say that provider rates will need to be cut unless we swallow the Obamacare Medicaid poison pill.

England points out that we're still waiting for a state budget. If the state follows OCPA's recommendations and adopts the numerous cost-cutting reforms and eliminates lower priority spending, that could be enough to allow the state to maintain provider rates. Even if provider rates need to be cut, the real impact might not be that bad, as Oklahoma's reimbursement rates are well above the national average, 10th overall. Medical companies might lose some revenue, but everyone needs to tighten their belts.

The legislative sleight-of-hand that turns this Medicaid expansion into a rebalancing is moving 175,000 pregnant women and children off of Medicaid and into the Obamacare-subsidized exchange, and this number is the same as the number of newly-eligible Oklahomans expected to sign up for Medicaid. But the change would make over 600,000 Oklahomans eligible, a number that includes able-bodied, childless adults and even some who are on employer-sponsored health insurance. Other states that voted for Medicaid expansion have seen far greater enrollments than expected, leading to budget problems. England's article includes links to reforms that would refocus Medicaid dollars to better meet needs and save money.

England asks and answers a pointed question of our not-for-profit hospitals, who have been lobbying for Medicaid expansion:

3. Hospitals complain about charity care, but isn't that their mission?

Many of Oklahoma's largest hospitals describe themselves as religious non-profit corporations. They collect money from the state, from private patients, and from donors, and enjoy preferential treatment by government. Many have wonderfully expensive buildings and large staffs of well-paid managers and middle managers. When these major corporations pay lobbyists to demand more money from the public, it is fair for legislators and taxpayers to ask whether they are really focused on their original mission of service.

Finally, England reminds legislators that many of them "won office campaigning against the overreaching and unconstitutional power of the Obama Administration--speaking out in particular against the hastily passed Obamacare scheme. Those legislators, considering the Medicaid Rebalancing Act, face a simple, personal question: How important is honesty, integrity, and their reputation?"

OCPA has a detailed and footnoted analysis of the Oklahoma Medicaid rebalancing proposal.