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A consumer archive of news sent from Oklahoma Policy Institute
Thursday, November 2, 2017
[In The Know] Senate sends Fallin bill to tap Rainy Day Fund for $23 million
Wednesday, November 1, 2017
What now? With clock ticking, Legislature weighs options to avert Doomsday
At this point (barring further surprises), special session is likely to conclude with a new budget that averts the doomsday scenario facing the three health and social services agencies but does not address Oklahoma's chronic budget problems. It would also impose a new round of cuts on most or all state agencies. In the meantime, with each new day that passes without an agreement, the hundreds of thousands of Oklahomans served by the three agencies must grapple with rising anxieties that the crisis won't be resolved and that they will lose the services that their health, and even their lives, depend on.
Recapping last week
The initial plan unveiled by Republican leaders last Monday included a $1.50-per-pack tobacco tax and a 6-cent-per-gallon increase in motor fuel taxes, along with various minor revenue modifications. It also provided raises for teachers and state employees beginning in 2018 and restored the refundable portion of the state Earned Income Tax Credit. Democrats — whose votes were needed to meet the three-quarters supermajority required of revenue bills under State Question 640 — unanimously opposed the plan because it relied entirely on more regressive taxes and left out increases in the gross production tax or income tax that they had insisted on to get their votes on the other revenues. The main revenue bill (HB 1035) passed out of committee but fell 21 votes short of mustering three-quarters support in the House, with all Democrats and 18 Republicans voting against.
On Thursday, the Senate passed a bipartisan resolution calling on the House to increase gross production taxes on new wells from the current 2 percent to 4 percent for the first 36 months of drilling. This increase was still too little for most Democrats and too much for many Republicans. On Friday, a new version of the omnibus revenue bill, HB 1054, failed on a 11-11 vote in the House JCAB committee, with all but one Democrat joining 5 Republicans in rejecting the measure, and several other Republicans declining to vote.
Where we are now: Cash and cuts and maybe more revenue
The repeated failure to find agreement on a revenue package capable of securing 76 votes in the House leaves little hope of a bipartisan agreement that could fill the entire budget hole with recurring revenues. Instead, the likeliest scenario, which is being called "Plan B" or "cash and cuts", involves additional revenue from the following two sources:
- $23.3 million is available from the Rainy Day Fund. Lawmakers can appropriate up to one-quarter of the Rainy Day Fund upon declaration of an emergency by the Governor and a two-thirds vote of both chambers. The remainder of the Rainy Day Fund — $70 million — cannot be used at this time.
- $83.5 million is available from last year's General Revenue that came in above the appropriated amount.
Several bills to appropriate the $106.8 million in carryover funds and Rainy Day Funds to the three health agencies have been approved by the full House and now await action in the Senate.
In addition to these measures, numerous proposals for additional revenue have been floated by legislative leaders. Under HB 1085, the gross production tax on horizontal wells drilled between January 2014 and June 2015 would increase from 4 percent to 7 percent. This would generate an additional $51 million in FY 2018. Other revenue measures that are less likely to pass include partially removing the sales tax exemption on motor fuels (SB 23) that would generate $58 million in FY 2018, and expanding the range of permitted games in tribal casinos (HB 1087), projected to raise $8.3 million in FY 2018.
While agreement on these or other revenue ideas remains possible, at this point the likeliest scenario is for the Legislature to appropriate just the carryover cash and Rainy Day fund money totaling $106.8 million. This would leave a shortfall of $107.2 million, which would need to be cut from agency budgets. Rather than leave the three health and human service agencies on the hook for the entire shortfall, it is likelier that the Legislature will pass a new budget that spreads the cuts more broadly across state agencies. (Speaker McCall has suggested that if the three health agencies are appropriated enough money in special session to fill part of their hole, they should defer making cuts until April and allow the Legislature to address the problem in regular session. Finance Secretary Preston Doerflinger has responded that this would be unconstitutional because agencies must maintain a balanced budget throughout the year). No new budget has yet been released.
If a $107.2 million shortfall is allocated evenly, it will amount to a 1.6 percent cut to every agency. However, by the time a new budget is passed, agencies will have already received five months worth of FY 2018 appropriations, so their monthly allocations for the remaining months would be cut by about 2.7 percent. This spreadsheet shows OK Policy's calculation of the impact on each agency of a $107.2 million total cut spread across-the-board.
Cuts have consequences
A 1.6 percent cut to every agency would be less catastrophic than the doomsday scenarios faced by the three health and human services agencies if the Legislature does nothing. However, we should not forget that the initial budget approved by the Legislature in May was already "massively underfunded," in the words of the then-House Appropriations chair Leslie Osborn. Many agencies have already absorbed cuts of 20 percent or more over the past decade, severely weakening their ability to fulfill their core responsibilities and leaving no good options for dealing with more cuts.
[pullquote]“Whenever the Legislature reaches a solution and whatever it looks like, those who need state services for their continued health have already been put under terrible stress and fear.”[/pullquote]
Common education, which would be hit with a $37 million cut, is already receiving some $180 million less in state aid support than in 2008 while enrollment has increased by over 50,000 students. It is likely that the Oklahoma Health Care Authority, which would lose $16 million, DHS, which would lose $11 million, and the Department of Mental Health and Substance Abuse Services, which would lose $5 million, will still have to cut rates paid to providers and services for vulnerable populations.
In addition, while filling the budget hole with one-time revenues would avert the doomsday scenario, it only deepens the problem of Oklahoma’s structural budget deficit. That means we will find ourselves with an even larger budget hole — and fewer options for dealing with it — when lawmakers come back for regular session in just a few months.
In the meantime, in the absence of an agreement, the Department of Mental Health and Substance Abuse Services, Oklahoma Health Care Authority and Department of Human Services have no choice but to move ahead with the administrative process for making cuts that would eliminate services for the state's most vulnerable populations within the next month. For example, DHS this week sent out notices to seniors and individuals with disabilities that the waiver programs that allow them to receive in-home care will terminate December 1st. We must not forget that, whenever the Legislature reaches a solution and whatever it looks like, those who need state services for their continued health have already been put under terrible stress and fear.
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Oklahomans have from now until December 15 to get health insurance for 2018
Photo via Healthcare.gov[/caption]
This post is by OK Policy intern Lydia Lapidus. Lydia is a recent graduate from George Washington University’s Elliott School of International Affairs with a concentration in International Politics.
Fall is here, and the Healthcare.gov online marketplace is up and running with options that won’t eat into your pumpkin spice budget. This year’s shortened open enrollment period will span from November 1st to December 15th, 2017, with coverage beginning on January 1st. (Note: Members of a federally-recognized American Indian tribe are exempt from these deadlines and can enroll on HealthCare.gov at any time of the year.)
Whether you need to get insured, switch plans, or re-enroll, here is some information to help.
How do I enroll?
Finding and enrolling in the right health plan can be a complicated process. Fortunately, there are plenty of resources available to help. Residents of Oklahoma can shop around and sign up for 2018 coverage at Healthcare.gov. If you need assistance in understanding your eligibility or finding an affordable plan, check out Healthcare.gov's Local Help page or visit Get Covered America to find appointments with local navigators near you.
Who can purchase a Marketplace plan?
If you buy your health insurance on your own (rather than through your employer), you can purchase a 2018 Marketplace plan. If you have employer-based insurance, you can buy a Marketplace plan, but you’ll have to pay full price unless your employer-provided insurance doesn’t meet certain standards. If you are low-income, you may qualify for Medicaid — in which case you can’t buy Marketplace insurance, but you can enroll in SoonerCare at any time. If you are ineligible for Medicaid but don't make enough to qualify for premium subsidies on the Marketplace, you are likely exempt from the tax penalty for being uninsured.
I bought a plan last year. I’m good, right?
If your current plan offers coverage through 2018, you can choose to keep it. You might be renewed automatically into that plan, but it’s worth double-checking. If your current plan isn’t offered for 2018, you will be automatically enrolled in a different plan unless you select a new one. In any case, it's wise to review your options and update your application to make sure you are getting the coverage you want at the right price.
What about those high premiums?
Yes, premiums have been on the rise. However, for most enrollees, tax credits based on income and the cost of coverage should cover most or all of the cost increase. Last year, 9 out of 10 Oklahoma enrollees received tax credits that brought the average monthly premium down from $550 to just $79. If your income falls between 100% and 400% of the Federal Poverty Line, you qualify for this credit.
What plans are available?
The Marketplace offers tiers of plans that differ in deductible amounts and monthly premiums. The bronze plans generally have the highest deductibles and lowest premiums, while gold plans have low deductibles and high premiums. You can find a breakdown of the plans here. If you’re under 30, you can also get a plan with a higher deductible and lower premiums than the bronze plans.
What’s covered?
All Marketplace insurance plans cover the same essential benefits. These include, but are not limited to: ER services, doctor charges, hospitalization, pregnancy, treatment for all pre-existing conditions, mental health and substance abuse services, lab work, and birth control. Some plans also include dental coverage.
I’m young and healthy. Why should I get insurance?
Nobody plans to get sick or hurt, but bad things happen, even to healthy people. A broken leg can cost $7,500 to treat. Three days in the hospital can cost $30,000. That’s a lot of money to come up with out of your own pocket, and that kind of medical debt can really limit your options. In Oklahoma, people ages 25-34 are more likely to be uninsured than any other group. This is largely due to affordability. Fortunately, many young adults have incomes that qualify for cost-sharing subsidies and premium tax credits. You can check your eligibility and savings based on income here. If you want more help getting insured, consider making an appointment with a navigator to find the right plan for you.
What’s the bottom line?
For thousands of Oklahomans, open enrollment is the best time to improve both their physical and financial health. When you buy health insurance, you are helping yourself avoid the threat of massive debt from potential medical bills. You’ll have access to care when you need it, and can receive preventative services to stay healthy. There are affordable options and resources to help you find them. It’s worth taking a look!
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[In The Know] House weighs $1,000 teacher raises
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In The Know: House weighs $1,000 teacher raises
Today In The News
House weighs $1,000 teacher raises: Education advocates on Tuesday said a legislative proposal awarding teachers a $1,000 raise could ultimately be viewed as a slap in the face and push more educators out of Oklahoma classrooms. “That is not enough to incentivize future teachers or current teachers,” said Shawn Hime, executive director of the Oklahoma State School Boards Association, after a House committee pushed a plan forward that would also give classroom support professionals a raise. A $1,000 raise would cost as much as $60 million a year, budget officials said [CNHI]. House lawmakers advanced familiar measures Tuesday but didn't consider a Rainy Day Fund spending bill approved by the Senate a day earlier [NewsOK].
Legislature drills down into details on revenue-raising measures: The Oklahoma Legislature can’t seem to compromise on a bipartisan budget bill. So top officials are homing in on one portion of oil and gas wells from which to raise revenue. House Republicans introduced a bill that would raise rates on a small subset of existing wells. Previous attempts in the special session to raise gross production taxes to 4 percent on all new wells failed. Legislators were unsuccessful in advancing a $3,000 teacher pay raise [Journal Record]. Lawmakers have good revenue options for special session if they have the will to use them [OK Policy].
Legislature devolves from solutions to blame-game politics: Members of the Oklahoma Legislature seem to have given up on solving the state’s problems and have moved on to their more natural strengths: denial, projection, partisan bickering and blame-game politics. Last week, there was hope. Gov. Mary Fallin, Speaker of the House Charles McCall and Senate President Pro Tem Mike Schulz unveiled a plan to raise cigarette, fuel and alcoholic beverage taxes and use the money to plug the state’s $215 million budget hole, give teachers a $3,000 pay raise, recreate the state’s earned income tax credit for working poor parents and improve the state’s future fiscal structure [Editorial Writers / Tulsa World].
Several fee hikes included in new state laws that take effect Wednesday: The Oklahoma Legislature has struggled to come up with enough votes to pass tax increases this year — but that didn't keep lawmakers from approving a bunch of fee hikes. Oklahomans ranging from felons to aircraft owners now face higher fees due to increases that became effective Wednesday. Among the 228 new Oklahoma laws passed last session that took effect Nov. 1 are many that call for significant fee hikes [NewsOK].
Oklahoma auditor says agency 'concerns' prompt audit request: Financial concerns that prompted Oklahoma's health commissioner to ask for a state audit of his agency also led to the commissioner's resignation, Oklahoma's top auditor said Tuesday. A team of state auditors has been reviewing the Health Department's financial records since the agency requested the audit last month, Auditor & Inspector Gary Jones said. A Sept. 28 letter from the department's health commissioner, Dr. Terry Cline, a its senior deputy commissioner, Julie Cox-Kain cited dwindling resources and "a budget and operating cash shortfall" since the start of the fiscal year on July 1 [AP]. One of Preston Doerflinger's first moves Tuesday as interim head of the beleaguered Oklahoma Department of Health was to force out the agency's chief lawyer [NewsOK].
Governor Fallin names interim director of Office of Management and Enterprise Services: Oklahoma's governor has named an interim director for the Office of Management and Enterprise Services. Governor Mary Fallin announced Oct. 31 that she has named Denise Northrup interim director for OMES. Northrup takes over for Preston Doerflinger. ...Doerflinger was named interim director of the Oklahoma State Department of Health Monday following the resignation of OSDH Terry Cline [FOX25].
Turnover of state workers climbing as their salaries fall further behind: We expect a lot from the Oklahomans who work for state government. These are the men and women we entrust to care for victims of abuse and neglect, supervise the most dangerous criminal offenders, stop the spread of infectious diseases, and ensure that our laws are applied fairly. We expect them to be well-trained, to work hard, and to maintain the highest ethical standards. Unfortunately, a decade of budget shortfalls have made it increasingly difficult to pay state workers competitive wages [OK Policy].
State Lawmakers Respond to Criticism Over Support for Terence Crutcher Foundation: State lawmakers pushed back Monday against recent criticism over their support of the Terence Crutcher Foundation. Sen. Kevin Matthews said since Rogers County Sheriff Scott Walton questioned his citation to recognize Crutcher’s life and foundation, he’s received several calls and emails saying he shouldn’t support a man who was a criminal and a drug user [KWGS].
New jail visitation rules have increased profits, but left family members on the outside looking in: When Thomas Myers was arrested in early September, he had just allegedly broken into his childhood home and rummaged through a jewelry box. Myers’ legal trouble began about the same time he was diagnosed with schizophrenia in the early 1990s, according to Joni Clark, his sister. Clark said her brother is a caring, artistic person who hopes to one day create a program to take care of pets who are stranded when their owner goes to jail. But he’s also struggled to stay on his medication [The Frontier].
Periscope: Opioid addiction and declining workforce participation: Oklahoma Attorney General Mike Hunter put opioids on the top of his list as soon as he took office, forming an opioid task force to figure out how best to stem the tide of addiction and overdose deaths. Last week, President Trump declared opioid addiction a public health emergency and while that only made $57,000 available to combat the problem, the pronouncement certainly helped publicize the problem. As of 2015, there were about 34,000 Americans killed in car crashes [Ted Streuli / Journal Record].
ICE deports OKC man in country illegally, family vows to fight: Despite protests by his family and local activists, a father of six who entered the country illegally and has lived in Oklahoma City for more than a decade was deported over the weekend. “Luis Plaza Moreno was removed to Mexico through Del Rio, Texas, on Oct. 28,” said Carl Rusnok, a spokesman for U.S. Immigration and Customs Enforcement, in an email [NewsOK].
Oklahoma U.S. Rep. Lucas Offers Insight into GOP Tax Reform Bill: What will the GOP tax reform bill coming out tomorrow look like? Oklahoma Congressman Frank Lucas has some predictions. Speaking at a Tulsa Regional Chamber forum, Lucas said the plan is still to double the individual income tax deduction from $12,000 to $24,000. But, a hefty border adjustment tax that would have paid for many other benefits in the legislation has become politically unpopular [KWGS].
Congress quietly passed a budget outline with $1.8 trillion in health care cuts: The budget resolution adopted by the US Senate last week, and by the House of Representatives on Thursday, is not a law. It cannot be signed or vetoed by the president, and the policies it recommends are just that — recommendations. But it still matters. The budget resolution changes the rules for passing certain legislation, especially in the Senate, and this resolution in particular will allow Republicans to pass $1.5 trillion in tax cuts (or more, depending on how they choose to do the math) over 10 years with only 51 votes [Vox].
PolitiFact: James Lankford's statement on economic growth in past 100 years is half-true: The Republican message on tax reform is that it holds the key to kicking the economy into high gear. Treasury Secretary Steven Mnuchin has talked of steady yearly growth of 3 percent or more each year with passage of the package. Many economists, regardless of their economic leanings, say that prediction is unlikely to play out, but Sen. James Lankford, R-Okla., said it makes sense to him [Tulsa World].
Oklahoma Rep. Jim Bridenstine's Hearing To Be Next NASA Head Today: President Trump's pick for the next head of NASA, Oklahoma Congressman Jim Bridenstine has his Senate nomination hearing Wednesday. The congressman, who is a Republican, serves in the Oklahoma Air National Guard and is a former executive director of the Tulsa Air and Space Museum and Planetarium. He was elected to Congress in 2012 and currently serves on House Armed Services Committee and the Science, Space and Technology Committee [NewsOn6].
By the skin of his teeth: learning to walk again without health insurance: In the weeks after professional bull rider Joseph Dewey suffered an injury that left him paralyzed from the waist down, an outpouring of support kept him buoyed above the undertow of hopelessness and despair. ...Now two years after his injury, Dewey is without health insurance. After being dropped by one provider while he was still riding, he relied on Oklahoma’s state Medicaid program to pay for his hospitalization and treatment, only to have it cancelled and denied once it was up for renewal [The Guardian].
Quote of the Day
“We’ve got to be bold and stop getting paralysis by analysis. (Otherwise,) the naysayers are correct — we’ll never get a pay raise. They’ll never be one because we’ll be afraid of our own shadow. Eventually, we’re going to need to prioritize how we spend state dollars.”
- House Majority Leader Jon Echols (R-Oklahoma City) speaking in favor of a proposed $1,000 teacher pay raise, which some education advocates said wasn't enough to be meaningful (Source)
Number of the Day
$623
State and local property tax collections per capita in Oklahoma, 49th in the US
Source: Tax Foundation
See previous Numbers of the Day here.
Policy Note
The New Reality of Old Age in America: Richard Dever had swabbed the campground shower stalls and emptied 20 garbage cans, and now he climbed slowly onto a John Deere mower to cut a couple acres of grass. “I’m going to work until I die, if I can, because I need the money,” said Dever, 74, who drove 1,400 miles to this Maine campground from his home in Indiana to take a temporary job that pays $10 an hour. Dever shifted gently in the tractor seat, a rubber cushion carefully positioned to ease the bursitis in his hip — a snapshot of the new reality of old age in America [Washington Post].
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$623
State and local property tax collections per capita in Oklahoma, 49th in the US
Source: Tax Foundation
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qotd 11/01/17
“We’ve got to be bold and stop getting paralysis by analysis. (Otherwise,) the naysayers are correct — we’ll never get a pay raise. They’ll never be one because we’ll be afraid of our own shadow. Eventually, we’re going to need to prioritize how we spend state dollars.”
– House Majority Leader Jon Echols (R-Oklahoma City) speaking in favor of a proposed $1,000 teacher pay raise, which some education advocates said wasn’t enough to be meaningful (Source)
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