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The McCarville Report
Category archives for: Legislature

Workers’ Comp Reforms Cut Costs

johnsondeniseWorkers’ compensation reforms enacted in 2013 have reduced costs to business by 14 percent, the incoming president and CEO of the Independent Insurance Agents of Oklahoma said today.

Denise Johnson, writing in a letter, said, “It is working! In the spring of 2013, the Oklahoma Legislature passed the most comprehensive and progressive workers’ compensation reform legislation in the past 30 years. Following the lead of many other states, Oklahoma adopted SB 1062, which has been projected to catapult our workers’ compensation system from the worst in the country to the best by minimizing conflict between labor and management. This new system has led to an overall cost to business decrease of as much as 14%. The numbers are staggering:

  1. Since February 1, 2014, Form 2 filings are down 30% (total 12,492) and Form 3 filings are down 75% (total 963).
  2. There have been 649 pre-trial hearings. Forty percent of claims have issues that were settled by the participating parties. Twenty percent of claimants already had trial dates set and 40% have been reset for Status Conference.
  3. Troy Wilson (a member of three-member Workers’ Compensation Commission) stated in the Enid News that under the former system, rates were 150% higher nationwide. If the rates are lowered to the national average, Oklahoma employers would save $330 million; lowering rates to the regional average would save employers $450 million. What a boost to our economy!

With the introduction of a new system comes challenges which the WCC has not been immune to; however, the bottom line is that the new “administrative” system is working since the Oklahoma Supreme Court found the new law to be constitutional. As the WCC continues to grow there will be a need for additional employees and resources as it continues to save Oklahoma businesses millions of dollars. The number of employees assigned to the Court of Existing Claims will gradually be reduced as caseloads dwindle with elimination of the entire department projected for 2020.  Under the new administrative system, we are seeing less contentiousness and a reduction of legal red tape. Most issues can be handled through mediation without the long trials and extreme settlements that we have seen in the antiquated system of the past. Oklahoma businesses and their employees are in a better place because of SB 1062. We are already seeing it!


Small: No Such Thing As ‘Revenue shortfall’

Jonathan Small, CPA
Oklahoma Council of Public Affairs

The most recent fiscal year ended on June 30, and the data show that for state government revenues and spending, it’s a time of all-time highs.

Preston Doerflinger, Oklahoma’s Secretary of Finance, Administration, and Information Technology, confirmed this week that the general revenue fund maintained levels from the prior year and exceeded them slightly.

This confirms that, when comparing revenues to the prior year, even when one looks only at the general revenue fund, the claims of a shortfall for government are false.

This is remarkable, considering that hundreds of thousands of Oklahomans experienced increased payroll taxes and federal income taxes, increased health insurance premiums due to Obamacare, new taxes and fees created by Obamacare, cost increases for state and local government, and periods of depressed consumer demand. This is also remarkable considering that state corporate tax collections experienced a long-predicted massive decline because of President Obama’s insistence that tax burdens increase during negotiations at the end of 2012.

Beginning last summer, there was a strong and coordinated campaign by tax consumers and other big-government advocates for massive tax increases on oil and gas production in Oklahoma.

Claims of significantly declining gross production taxes and predictions of declines were cited as a justification for the proposed massive tax increase. Given these dire predictions, a review of gross production tax collections for the general revenue fund is appropriate.

According to Secretary Doerflinger and state records, gross production tax collections for the general revenue fund (without a single statutory change or tax increase) grew $111 million over the prior year, even after the state paid back portions of its interest-free loan from the private sector.

But it’s not just the general revenue fund that has seen growth. According to Secretary Doerflinger and State Treasurer Ken Miller, total state tax collections have set another record. In fact, Miller reported in his recent summary of FY-2014: “Gross receipts to the treasury, a good snapshot of our state’s productivity, incomes, and consumption, are higher than ever before …. In fact, collections have been higher than the same month of the prior year in 45 of the past 51 months, which indicates a steady economic expansion.”

Indeed, even though the state over the last decade eliminated death taxes and cut the top personal income tax rate by 25 percent while increasing the standard deduction and adding a child tax credit for many Oklahomans, even state personal income tax collections are still growing.

According to Miller, “a general reduction in corporate income tax payments moderated a stronger showing in personal income tax collections.”

But it’s not just total state tax collections that have seen growth. Miller recently noted, after comparing appropriations made by the legislature in each of the last two legislative sessions, that state appropriations grew over the prior year. According to records at the Oklahoma House of Representatives, state appropriations made by the legislature for the upcoming fiscal year set a record high.

In summary, based on state records, reports from revenue officials, and actions of state lawmakers, state government is not experiencing a shortfall.

- See more at: http://www.ocpathink.org/articles/2771#sthash.DBTxYh60.dpuf


Law Change Sparks Concealed Carry Applications

Tulsa World

Traffic on the Oklahoma State Bureau of Investigation’s online application system for handgun licenses has more than tripled since media reports about an upcoming change in law, the agency said Friday afternoon.

The OSBI in a news release said 394 people have began applications online since the news reports Tuesday, compared to 130 people during the same three-day span a week ago.

Oklahoma Self-Defense Act gun safety course certifications are a first step toward obtaining a license to conceal or open carry firearms.

Jessica Brown, the OSBI’s public information officer, said the numbers released do not reflect how many applications have been submitted because not all are completed. Some people are browsing, too, she said.

On Nov. 1, a new law stipulates SDA certifications will expire after three years, where previously they had no term limits. The measure means certifications dated Nov. 1, 2011, or earlier will expire at the deadline.


Editorial: The Accounting ‘Shortfall’

Editorial
The Oklahoman

Accounting “shortfall”

At the end of the fiscal year on June 30, tax collections going to the state’s General Revenue Fund increased by only 0.03 percent compared with the prior year. The total came in at 4.8 percent below estimates. Yet gross collections to the state treasury actually increased $469.3 million year-over-year. How did state officials turn a $469 million increase into flat growth? By diverting more and more money away from the General Revenue Fund, which is the main funding source for the appropriations budget drafted by lawmakers. The amount earmarked for specific uses outside the budget process increased by $102 million. Thanks to earmarks, lawmakers faced a $188 million “shortfall” in a time of record tax collections. The shortfall existed only on paper. It was the product of legislative machinations, not an economic downturn. June’s final revenue numbers are another reminder of the vital need to amend state budgeting methods.


Capitol Repairs Discussion Planned

State officials on Thursday will hold a media availability to discuss repairing the state Capitol building. Governor Fallin signed legislation this year authorizing a $120 million bond issue for extensive repairs to the building.

Office of Management and Enterprise Services officials will discuss preliminary planning efforts for those repairs, which will be the most extensive in the 97-year-old Capitol building’s history.

In addition, in recognition of the upcoming 100th anniversary of the Capitol building groundbreaking, the Oklahoma Historical Society will discuss and display artifacts from the July 20, 1914 groundbreaking for the building.


Murphey: Taxpayer-Funded Lobbying Survives For Another Year

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Rep. Jason Murphey

Imagine owning a business and entering into a contract with a vendor. As you prepare to sign the contract, the vendor puts forward one final stipulation. He wants you to hire an employee with the sole mission of perpetually negotiating with you to change the terms of the contract to better favor the vendor. You will essentially be paying someone to negotiate on behalf of your counterparty. This makes no sense, and no self-respecting business owner would sign that contract.

Just as this concept isn’t utilized in the business world, it shouldn’t have a home in government either. To that end, state policy appears to prohibit state agencies from using the funding they receive from the Legislature to pay for a lobbyist. This policy reflects an important concept: it’s wrong for government to make you pay the salaries of those who have a vested interest in making you pay even more in taxes or fees.

But at last count, the policy hasn’t kept approximately 23 state government entities from employing professional contract lobbyists. Agencies may hire lobbyists with funds which are not appropriated by the Legislature. The Legislature appropriates less than half the funds spent by state government. This provides many opportunities for state entities to find non-appropriated money for lobbyists.

These agencies and those in the Legislature who defend the practice do so on the premise that non-appropriated money somehow isn’t the taxpayers’ money because it may have originated from fees rather than taxes. I personally think that all money spent by state government is the taxpayers’ money regardless if it originates from taxation or from a government-mandated fee.

In addition to the 23 state government entities which have hired contract lobbyists, approximately 27 local or regional government entities and government funded associations, and even one out-of-state government entity, also employ a contract lobbyist. In the collective, this represents a significant government subsidy of the professional lobbying industry.

Over the past few years, free market think tanks such as Americans for Prosperity, the Oklahoma Council of Public Affairs, and a handful of dedicated legislators have been attempting to stop the practice of taxpayer-funded lobbying by state government entities. This year I worked with Senator Anthony Sykes to sponsor House Bill 2537, which would have put a stop to the practice and ensure that lobbyists once cut off of government funding couldn’t be hired as state employees in the role of lobbyist or “liaison” to the Legislature.

The bill won the approval of the Government Modernization Committee. Our success was quite temporary as the bill hit a buzzsaw of bipartisan opposition when we took it out to the House floor, with Rep. Mike Reynolds leading the debate against the proposal by specifically expressing opposition to a part of the reform prohibiting lobbyists from going to work for the state. The bill was soundly defeated by a vote of 30 to 64. Our coalition of 30 included 26 Republican and 4 Democrats with the balance of the House either voting against the bill or not voting.

This defeat ensures the continuation of the current status-quo by which your taxpayer dollars fund the private lobbying industry in their all-too-frequent effort to either expand the size and reach of government or oppose the reforms which would streamline and make more efficient.

Until our reform becomes law, we will always face an uphill climb in the endeavor to restore the balance of power in favor of the taxpayer and away from the bureaucracies.


Hickman Approves Interim Study List

House Speaker Jeff Hickman has approved for interim studies a list of interests: http://newsok.com/oklahoma-house-speaker-approves-interim-studies-for-everything-from-firing-squads-to-cedar-trees/article/4988109


Currie Ballard Dead At 56

Currie Ballard, former Senate official, widely respected historian and the first African American to serve as a member of the Senate leadership staff, has been found dead in his home.

Ballard, 56, was a sitting member of the Oklahoma Pardon and Parole Board.

Senate Resolution 105 was approved in 2010, praising his public service and congratulating him upon his induction into the Oklahoma Historians Hall of Fame.

Governor Fallin said, “Currie Ballard was a renowned and self-taught historian who felt a calling to share his knowledge,” said Fallin. “He was particularly passionate about African-American history and culture, and the many ways they have impacted the state and people of Oklahoma. My thoughts and prayers are with his family and friends during this difficult time.”

Senate President Pro Tempore Brian Bingman said,  “Currie Ballard was an extraordinary individual.  He was a respected historian and journalist as well as a dedicated public servant.  He was not defined or limited by his past, but rather, he was strengthened by it.  Currie was an inspiration to many, including me.  I feel so fortunate to have known him and to have had the opportunity to work with him in the State Senate.  Our thoughts and prayers go out to his family and friends, and we join them in mourning the loss of this truly great Oklahoman.”

 


Budgetary Move Raises Concern

A budgetary move during the last session of the Legislature has raised concern: http://newsok.com/oklahoma-lawmakers-move-money-used-to-pay-for-uncompensated-trauma-care-from-state-fund/article/4986881


Murphey: The Rise Of Regional Government

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Rep. Jason Murphey

I have recently written about bills from the last legislative session which mostly escape wide public purview but contain far reaching policy. The news has been mostly positive as I have either described harmful bills which were defeated, or good policy which won approval.

Now for some bad news.

I have observed the tendency for state officials to authorize a new super layer of regionalized government. This layer of government grows as state laws allow local government to come together to form new regional government entities which are insulated from the immediate purview of the taxpayer. The primary constituency of the regionalized entity isn’t the voter, but other government entities.

Cities and counties currently possess the ability to form new government entities which oversee transportation issues within that city or county. These entities may fund themselves through a 2% sales tax assessment. Until now, an entity’s jurisdiction could not exceed the jurisdiction of the cities or counties which formed it.

This restriction partly helped voters to keep the transportation government entity in check because local taxpayers can always elect new officials if/when the transportation entity got out of control. The newly elected officials could take action to rein in the entity because the officers would probably be the local elected officials or their direct appointees.

The restriction also made it a little less likely that the transportation entity would avail itself of the 2% sales tax because the tax would conflict with the city or county’s tax policy.

House Bill 2480 changed this. Transportation entities are now allowed to include parts of their own unique district within the various cities and unincorporated areas, but not necessarily entire cities. These entities may now be formed according to arbitrary and capricious boundaries.

These regional government entities are now less likely to represent the voters. For example, let’s assume a regionalized transportation is formed representing Edmond and Piedmont and connected through a part of the Deer Creek area. Let’s say the entity takes an action which isn’t popular in the Deer Creek area, but is popular in Piedmont and Edmond. Those who live in Deer Creek simply aren’t likely to have their voices heard because they do not have a majority of seats on the regionalized board or the direct ability to vote on the board members. Those voters will have little to no say in what occurs, even though they may be paying taxes to that government group.

The rise of regional government comes at a time when taxpayers are already breaking under the strain of too much government in all shapes and sizes.

It isn’t hyperbole to suggest that the combined taxation of government takes half the average taxpayer’s income. This doesn’t account for the impact of inflationary federal monetary policy or the inherited cost of new government regulation such as the impending draconian increase in utility rates which will be brought about by the federal government’s newest scheme to regulate energy production.

If the federal government is a massive whale which seeks to swallow the taxpayer whole, the multitude of tax-hungry local government entities are the vicious piranhas which in the collective may do more harm to the taxpayer than the federal government. In our area, it has become hard to find a local government entity which isn’t plotting and planning either a rate increase, tax increase or expansion of regulation. The last thing we need is a new set of regional government entities with their own taxing power. They may well be the proverbial last straw which breaks the camel’s back.

Unfortunately, this sentiment wasn’t shared by many others in the Legislature. House Bill 2480 will go into law notwithstanding the objection of 25 Representatives and 11 Senators.


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