It was recently announced that the Oklahoma Tobacco Settlement Endowment Trust Board of Investors certified $52.7 million in earnings for use in the coming year.
This news is yet another testament to the fact that state revenues and spending are at all-time highs.
The Board of Investors should be commended for their transparent process of informing the public about how much is generated by the endowment’s investments every year. The certification is an increase of $13.6 million over the prior year and due in part to the substantial size of the endowment of more than $975 million. Given the substantial amounts available from the endowment and payouts to Oklahoma, over $242 million in earnings to date and payouts totaling $1.17 billion, it’s an understatement that tobacco use, particularly traditional combustible tobacco use is big money for the state of Oklahoma.
On November 19, 2012, in an Oklahoma House of Representatives interim study, “State Agency Loss of Federal Funding Contingency Plans,” Mike Fogarty, then CEO of the Oklahoma Health Care Authority, testified to the heavy dependence of the state on revenue from taxes on traditional tobacco products. In response to a question from a participant in the study about whether or not a significant decline in tax revenue had transpired with the heavy push to reduce tobacco use, Mike Fogarty responded: No … We’d hope that fewer people would buy and smoke cigarettes, and we are actually often quoted as saying, we need people to go buy cigarettes, we just don’t want them to smoke, because we are dependent on the revenue [on tobacco products]. But the fact of the matter is that tax [taxes on tobacco products] has not gone down. We along with our partner agencies the Health Department and others would like to see cigarette purchasing go to zero, but if it did, we would be here talking about the loss of state revenue…[emphasis added].”
Understanding how much money the state makes off of traditional combustible tobacco use, whether through heavy excise taxes or settlement payouts, it’s discouraging that some state agencies still refuse to be transparent with Oklahomans about the varied risks between combustible tobacco use and non-combustible use of tobacco or alternative products.
OCPA has highlighted the problem of the lack of transparency related to the varied risks of the various uses of tobacco previously.
Sadly, in an age where information is more accessible than ever and the state of Oklahoma has more money than ever, websites and information from the Oklahoma State Department of Health, the Oklahoma Health Care Authority and the Oklahoma Department of Mental Health and Substance Abuse Services still portray all types of tobacco products are as equally dangerous.
Thankfully lawmakers stopped a power-grab attempt this legislative session by state bureaucrats with a religious dedication to non-transparent regulation of tobacco and alternative products.
These bureaucrats wanted to use the cover of prevention of youth access to alternative tobacco and non-tobacco products as a means to regulate all tobacco and alternative products the same which would lead to taxing them the same. We are still waiting for transparency from health related state agencies and hopefully these state agencies will follow the lead of the Oklahoma Tobacco Settlement Endowment Trust Board of Investors as it relates to transparency.
Today the Oklahoma Democratic Party filed an ethics complaint against Senator Dan Newberry, R-Tulsa. A spokesman said an investigation revealed that the Republican Senator’s ethics reports disclose a person “skirting Oklahoma ethics law by living on campaign funds.”
“Once again, this is displays a serious pattern of bad behavior by the Republican leadership. Dan Newberry must believe that he is above the law or that laws don’t apply to the Majority Whip of the state Senate,” stated former Representative Wallace Collins.
Sections 257:10-1-7(3)(A)(B)(C)(D) and 257:10-1-14(12)(D) of Oklahoma Ethics Laws are clear that expenditures more than fifty dollars ($50.00) in the aggregate must be reported individually and described in such a way that a person reading the report can tell where and how the money was spent.
Contrary to the law, Senator Newberry’s ethics reports, lumps together almost twelve thousand dollars ($12,000.00) of unitemized expenditures including green fees, airfare, lodging and gifts.
Collins continued, “I have never been able to buy an airplane ticket or hotel room for under fifty ($50.00) bucks. He knew the cost of these expenses, and he knew what the law says about reporting. It is time for him to come clean or resign his leadership post for his willful violation of state ethics laws. If he claims he didn’t know the law—he should resign from his position immediately for not having the knowledge of Oklahoma’s laws.”
In the next four years, Oklahoma taxpayers will be asked to subsidize tens of millions of dollars in reimbursements to local entities like schools and counties, not because these are broke, but because of an ill-conceived tax credit involving wind farms that many residents question.
The state’s property tax reimbursement program was designed for a valid purpose: to assist schools and counties in dealing with an upsurge in population resulting from new jobs. If a manufacturer built a factory in a rural area and boosted employment, he would receive a five-year exemption from property taxes.
In return, the state treasury would reimburse those local entities for that lost revenue, which they would need to serve those new residents.
Under that system, everybody won. The county got new jobs, expanded its population and ultimately had a larger tax base to fund schools and other necessities. State government received more sales and income taxes to fund essential government services. The manufacturer would get a higher return on investment up front, making the decision to locate there a smart one.
Then came the wind farms and other entities that produced few, if any, jobs. In the early 2000s, legislation made them eligible for the same five-year property tax exemption. Last year, Oklahoma taxpayers ponied up $32 million in reimbursement payments to counties derived from wind farms alone.
The current estimate is that we’ll shell out another $290 million to subsidize wind farms by 2018, from property tax reimbursements and additional subsidies under the zero-emission tax credit system. Some $76 million of that will be in property tax reimbursements in one year alone. Those reimbursement payments are funded from individual and corporate income tax revenues, which means taxpayers in my district are paying their own property taxes and those in other counties as well.
In some cases these payments are simply a boondoggle. Last year we reimbursed Roger Mills County more than $6 million, about $1,700 for every person living there.
What’s wrong with giving wind farms the same tax breaks manufacturers receive? Wind farms produce few, if any, long-term jobs. Once the farms are built, the companies move on to the next project. With no extra jobs being created, there is no reason for state taxpayers to reimburse costs that don’t exist.
Second, many Oklahoma wind farms sell the power they generate out of state. They’re selling the power they produce, with our generous subsidies, to agencies like the Tennessee Valley Authority.
Texas is also a wind farm mecca, but it doesn’t saddle taxpayers with wasteful subsidies. In Texas, local entities are allowed to negotiate tax breaks, but the state doesn’t offer a reimbursement program like ours.
With many communities questioning the wisdom of wind farm development, it makes little sense to spend so much on taxpayer-funded subsidies that bring few, if any, returns.
It’s time to end tax reimbursement programs for projects that don’t create jobs or add to our prosperity.
Dank, R-Oklahoma City, represents District 85 in the Oklahoma House.
Here’s a not-so-secret but still shocking fact. Many elected officials do not possess even a basic, high-level comprehension of the budget over which they have been assigned stewardship.
I have often spoken in favor of term limits. It’s a healthy process for new and energetic elected officials to replace those who have become acclimated to the status quo.
Last year I observed one of these new officials make a difference simply because he asked very basic but important questions which challenged a key pillar of the very inefficient status quo.
As the newly elected official met with his constituency, he faced questions about Oklahoma’s education budget. He wanted to honestly answer these questions but determined that the education budget documents routinely shown to most legislators aren’t in fact reflective of the actual budget. Instead the legislative documents simply detail the amount of money appropriated each year by the Legislature. This reflects only a fraction of actual state government spend.
The new legislator wasn’t content to just see the appropriated dollars. In order to answer the constituents’ questions he needed to see the entire budget. That’s when he exposed what has for many years been an unfortunate status quo: the entire budget for state agencies isn’t readily accessible to the public and is rarely requested by most legislators.
The new legislator subsequently sponsored one of our most important modernization initiatives of this year. He proposed that each budget document should be placed online through one of our most successful transparency projects: the state’s omnibus government documents transparency portal located at documents.ok.gov.
Our modernization committee approved the proposal; however, it became unnecessary to advance the legislation beyond this point as our transparency allies within the state’s Office of Management and Enterprise Services – OMES – had taken note of the idea and proactively posted the budgets of the largest state agencies at documents.ok.gov. This avoided the need for writing a new law while still accomplishing the goal of transparency.
Better still, this is just the tip of the iceberg. At this moment, OMES is implementing a new statewide budgeting system – known as Project Encore – which should allow for real time public access and purview to all state agency budgets as just one of numerous other advantages which I look forward to describing in a future article.
You may view the budgets of Oklahoma’s largest agencies by navigating to hd31.org/643.
Additionally, I strongly advocate the complete reshaping of the process by which the Legislature appropriates funds. The Legislature must transition to a system by which all state spending is examined. It’s an absolute indictment of the current system that it takes a freshman representative to expose the lack of budget purview exercised by Oklahoma lawmakers. The advancement of technology will provide the tools by which legislators can finally attempt to exercise proper budget oversight.
Some parts of our world have gone mad. Stark, raving, mad. Stone cold nutso.
Firefighters in Illinois are told by their chief to remove American flag decals from their helmets because they might be viewed as racist.
Ferguson, Missouri, is held hostage by “demonstrators,” some of whom have looted and burned.
A city orders a 2nd Amendment flag taken down but allows a Muslim flag to be raised.
A 3rd grader who bites a piece of food into the shape of a pistol is suspended and sent home for three days.
The race (?) for governor of Oklahoma so far is a yawner. Democrat Joe Dorman is digging for traction, but the arrows he’s shooting aren’t hitting the target, much less the bullseye. Dorman and his supporters are throwing mostly wild punches in a mad dash to cut Fallin’s lead.
Panera Bread bans law-abiding citizens and their firearms, joining other retailers who have done the same. What…only bad guys with guns now allowed?
A 1st grade boy who kisses a female classmate on the cheek is suspended for sexual harassment.
Why does a 2-hour examination and treatment at a hospital ER cost $1,200?
How can our president declare to the world that we have no strategy for dealing with an international situation? If George Bush had said that, the media would have pummeled him without mercy and painted him as wearing a dunce cap.
From Detroit: An army officer is told he can’t enter his daughter’s Metro Detroit high school this morning because he’s wearing his uniform.
Nebraska’s Lieutenant Governor Lavon Heidemann announced his resignation, both from office and as running mate to a GOP gubernatorial candidate, after a judge granted a restraining order against him to his sister after he attacked her.
When 11-year-old Grace Karaffa was told she couldn’t use ChapStick at her Virginia elementary school, the girl — who’d been prohibited from using it for years to treat her dry, bleeding lips — decided she’d had enough. The fifth-grader at Stuarts Draft Elementary School created a petition and presented her case before the Augusta County school board last week, arguing that a ban on the most commonly used remedy to treat chapped lips was “inappropriate,” her father said.
A Republican governor and Republican Legislature spends tax dollars like there’s no tomorrow…forgetting it was just yesterday that promises to cut taxes and cut spending is, in part, what propelled them into office. Nutso.
THE National Association of State Budget Officers noted in a recent report that many states are in a similar situation fiscally. They have “limited resources with numerous demands for spending and not enough revenue to go around,” NASBO said.
Oklahoma feels their pain. Agency directors go to the Capitol each year to (almost always) ask lawmakers for more money. Whenever they can, lawmakers try to oblige. This has been the practice for decades, although since the Great Recession most agency heads have seen their budgets shrink a bit, or perhaps be held steady.
It’s a flawed system. When times are good, the Legislature writes bigger checks. When they’re not so good, the checks get smaller. A question asked all too infrequently is whether the state is getting its money’s worth.
Oklahoma will begin asking that question more often, as it joins several other states in moving toward “performance-based budgeting.” This process — using specific measures of past performance to determine whether a budget item is worth the money — gained popularity in some states in the 1990s, but was pushed aside after the recession to focus on navigating the fiscal minefield.
Now it’s back, including in Oklahoma. The state’s budget office in January began implementing a new budgeting system that went live a few weeks ago. It’s intended to allow the state to move toward what Preston Doerflinger, state finance secretary, calls “performance-informed budgeting.”
“It will allow us to look across state programs throughout the state,” Doerflinger says. “We have agencies that are trying to solve the same problem, and at times may even be competing with each other to try to do it. This will allow us to make better informed decisions about programs that are successful.”
He used the issue of teen suicide as an example. Several state agencies are involved in trying to address it. Are particular programs having the greatest impact? If so, that should be evident and thus make it easier for budget appropriators.
“It makes perfect sense that we would approach budgeting this way,” Doerflinger said.
NASBO surveyed states that have used performance-based budgeting and said there are important factors to consider. One is that buy-in from agency managers is a must, because elected and politically appointed officials come and go. This system of budgeting “creates a level of uncertainty that will be unsettling to many of the key employees expected to implement the process,” NASBO said. Doerflinger says he’s witnessed some of that uneasiness here as the change has been made.
Budget officers in other states also said it’s important for state leaders to push and support the idea and for agencies to see the benefits in performance-based budgeting — upsetting the status quo can be difficult. And, this sort of budgeting can’t simply be a budget-cutting exercise. “The focus should be on how the process directs investment of scarce resources toward more effective programs,” NASBO said.
The organization found that although performance-based budgeting practices are increasing, “the process of actually tying performance information to funding decisions in an effective, meaningful and practical manner continues to be a major challenge for all levels of government.”
Doerflinger, however, says Oklahoma’s practice for years “is the definition of insanity — doing the same thing year in and year out and expecting a different result.” This new way of budgeting, he believes, can transform the state for the better.
“I’ll keep talking about it until I’m blue in the face,” he said. And he may have to, in order to get this particular aircraft carrier turned around. We wish him well. Taxpayers should too.
LEXINGTON — Former state Senate President Pro Tem Cal Hobson has again been arrested and booked into the Cleveland County Detention Center on an alcohol-related complaint.
Lexington police arrested Hobson Saturday morning and booked him into the Cleveland County Detention Center at 11:23 a.m. A call to Lexington Police for details had not been returned early Saturday afternoon. A sheriff’s spokesman said the booking complaint was actual physical control of a motor vehicle under the influence of alcohol.
Hobson is the Democratic nominee in the race for District 3 Cleveland County Commissioner. He will face former Norman Mayor Dr. Harold Haralson in the Nov. 4 General Election.
Hobson’s attorney, David Stockwell, was unaware of his client’s arrest early Saturday afternoon.
In May, he was charged with felony DUI and attempted bribery after allegedly trying to bribe a Noble Police officer who arrested him in the 900 block of U.S. Highway 77.
Those proceedings have been delayed because Hobson was still in treatment, according to the court file. A preliminary hearing conference scheduled for July 22 was rescheduled to Sept. 23.
In the May arrest Hobson took the state’s test with a breathalyzer and registered an alcohol content of 0.27 percent, the affidavit said. It is illegal in Oklahoma to drive with a breath alcohol content of 0.08 percent or more.
Hobson, 69, has previously been convicted of operating a motor vehicle under the influence of alcohol in March 2013 in Cleveland County, records show.
He served as a representative from 1978 to 1990. He then served as a state Senator beginning in 1990 and was elected President Pro Tempore for the Senate from 2003 to 2005. Hobson was also Mayor of Lexington in 1976 and named Lexington Citizen of the Year in 2013.
OWASSO – A 1980s member of the Oklahoma House of Representatives is jailed on three sex crime complaints after Owasso police completed a monthlong sting operation, authorities announced Tuesday.
Danny Bruce George, 61, is accused of soliciting a minor for prostitution, sexual battery and making lewd proposals to a child, Deputy Chief Jason Woodruff said in a release. The investigation began in July when an Owasso detective posed as an underage girl and began text messaging and chatting online with George to arrange a meeting, Woodruff said.
George, of Clinton, reportedly agreed to travel to Owasso to have sex with the underage girl and arrived at a local restaurant at 4 p.m. Tuesday, where he was confronted by members of Owasso’s Criminal Investigations Division.