The McCarville Report
Category archives for: State Government

House OKs Vet Centers Smoking Agreement

The House gave final approval to legislation Wednesday putting into statute an agreement made in 2013 between the Governor and the War Veterans Commission addressing smoking in Oklahoma’s veterans centers.  Senate Bill 1777, by Sen. Frank Simpson and Rep. Pat Ownbey, will permit smoking by the residents of the centers until January 2018.

“I again want to thank the Governor, the Secretary of Veterans Affairs, the War Veterans Commission and the Oklahoma Department of Veterans Affairs for working together to come up with this plan that accommodates our veterans who smoke while still being considerate of the health of the other residents and employees at the centers,” said Simpson, R-Ardmore.  “We have to remember that these centers are home for these veterans and we wanted to make sure that they were treated fairly and had adequate time to prepare for the change.”

SB 1777 requires state operated veterans centers to be designated nonsmoking effective January 1, 2015. At such time, a center may establish an outdoor designated smoking area for residents only.  All state operated veterans centers must be entirely nonsmoking by January 1, 2018.

Of the more than 1,400 residents at the center, less than 250 smoke.

Ownbey said the legislation is about fairness.

“This legislation was put together based on discussions we had with Governor Fallin and several veterans’ organizations,” said Ownbey, R-Ardmore. “Senator Simpson and I thought it was unfair to force veterans who are residents at the veterans’ centers to immediately give up smoking. The compromise we worked out was to give them until 2018. Only residents will be allowed to smoke until that date at those locations.”

The need for SB 1777 arose after Gov. Fallin banned smoking on all state property, including the state’s veterans centers, on February 6, 2012, with executive order 2012-01.  On April 13, 2012, the governor requested guidelines from the War Veterans Commission for implementation of her executive order but no agreement was reached.  In May 2013, SB 501 was signed into law placing the Governor’s executive order into statute.  However, since no agreement had been reached between the governor and the War Veterans Commission in 2012, no provisions for the veterans centers were provided in SB 501.  SB 1777 reflects the agreement reached in October 2013 between the Governor, the ODVA, the War Veterans Commission and the Secretary of Veterans Affairs.

Once signed by the Governor, the new law will go into effect November 1, 2014.

Chamber’s Morgan Disagrees With Doerflinger’s Revenue Analysis

State Chamber President and CEO Fred Morgan made the following statement after the latest revenue report released by the Office of Management and Enterprise Services:

“We respectfully disagree with some of the analysis in the most recent revenue report which seems to blame the business community for collections falling short of estimates. Gross production tax revenue is certainly not at fault since the collections so far this year are actually $11-million or nearly six percent higher than the estimate. And we don’t believe attacking successful, proven tax credits is the proper message to be sending to job creators trying to move the state’s economy forward. The state has collected more money so far this year than at this point last year. So rather than making job creators the scapegoat, perhaps the solution should be found on the spending choices being made.”

Doerflinger: GRF Collections 9.1% Below Estimate


General Revenue Fund (GRF) collections tumbled 9.1 percent below the official estimate in March after another month of unusually low corporate income tax revenue, this time following a major increase in tax credit claims. That’s the official word today from Secretary of Finance, Administration and Information Technology Preston L. Doerflinger

As state government’s main operating fund, the GRF is the key indicator of state government’s fiscal status and the predominant funding source for the annual state budget. Made up of nearly 70 revenue sources, the GRF is where all taxes flow except those dedicated to specific programs.

March collections to the GRF totaled $412.8 million, which is $1.1 million, or 0.3 percent, less than collections for March 2013 and $41.4 million, or 9.1 percent, below the official revenue estimate upon which the Fiscal Year 2014 appropriated state budget is based.

March’s weak GRF collections rekindled the possibility of mandatory appropriation reductions for all state agencies in FY 14, the current state budget year that began July 1, 2013 and ends June 30, 2014.

“Oklahoma’s economy still shows growth and momentum that has total tax collections continuing to hit historic all-time highs. The catch is a variety of totally noneconomic government policy factors are preventing those collections from being used for state budget purposes,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “These revenue issues are the creation of government, not the economy. Off-the-top apportionments, corporate income tax declines, tax credits and other tax and budgeting choices that in some cases date back decades are the reason this situation exists.”

For the first three quarters of FY 14, GRF collections totaled $3.9 billion, which is $7.2 million, or 0.2 percent, above prior year collections and $215.4 million, or 5.2 percent, below the official estimate.

The official estimate certified annually by the Board of Equalization is important because it is used by the Legislature to determine spending authority and sets the framework for the state’s constitutionally-required balanced budget. If revenues fall too far below the official estimate, the state cannot operate within its balanced budget requirements, which leads to mandatory appropriation reductions.

“I said in January that a string of abnormally weak months could cause issues, and we’ve had two tough months in a row now,” Doerflinger said. “Unless April GRF collections exceed the estimate, minor appropriation reductions to agencies may be necessary for the remainder of the year. Cash flows remain sufficient at this point, but we’ll need a strong finish to the year because we’re about out of options after two weak months and a weak start to the year.”

State law requires mandatory appropriation reductions for all agencies if revenues are not sufficient to fully provide monthly allocations to all agencies for the entire fiscal year. Such a scenario is called a “revenue failure.” Under state law, a five percent cushion is built in to the appropriated state budget to prevent revenue failures from occurring if revenues dip slightly below the official estimate. Sustained periods in which collections dip more than five percent below the official estimate put the state at risk of revenue failure.

FY 14 GRF collections ran more than five percent below the estimate throughout the first half of the fiscal year before the holiday season boosted collections back within the five percent cushion.

At the end of February, YTD collections to the GRF were 4.8 below the official estimate after February collections missed the estimate by 8.1 percent. In March, the Tax Commission reported a major increase in claimed tax credits, which caused further significant decreases in corporate income collections to the GRF that left YTD GRF collections 5.2 percent below the official estimate by month’s end.

“I know I sound like a broken record, but it bears repeating that agencies need to keep their belts tight and watch every penny,” Doerflinger said.

Among the factors driving the GRF’s FY 14 decline are:

  • ongoing increases in off-the-top apportionments away from the GRF to other sources;
  • major decreases in corporate income tax collections;
  • recent increases in tax credits claimed by businesses; and
  • gross production tax revenue losses related to horizontal drilling incentive provisions and deferred rebates.

“Policymakers should continue serious assessments of our fiscal trajectory or the GRF may continue shrinking like this for the foreseeable future,” Doerflinger said.

Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports.

Major tax categories in March contributed the following amounts to the GRF:

  • Total income tax collections of $146.6 million were $18.7 million, or 11.3 percent, less than prior year collections and $28.4 million, or 16.2 percent, below the estimate.Individual income tax collections of $86.4 million were $9.2 million, or 11.9 percent, more than prior year collections and $1.7 million, or 2 percent, below the estimate.

    Corporate income tax collections of $60.2 million were $27.9 million, or 31.7 percent, below prior year collections and $26.6 million, or 30.7 percent, below the estimate.

Sales tax collections of $153.6 million were $7.6 million, or 5.2 percent, more than prior year collections and $6.1 million, or 3.8 percent, below the estimate.

  • Gross production tax collections of $39.2 million were $1.1 million, or 2.8 percent, more than prior year collections and $1.3 million, or 3.5 percent, above the estimate.Natural gas collections of $6.6 million were $1.8 million, or 21.2 percent, less than prior year collections and $8.2 million, or 55.3 percent, below the estimate.

    Oil collections of $32.5 million were $2.9 million, or 9.7 percent, more than prior year collections and $9.6 million, or 41.7 percent, above the estimate.

  • Motor vehicle tax collections of $14.7 million were $2 million, or 16.1 percent, more than prior year collections and $1.3 million, or 7.9 percent, below the estimate.
  • Other revenue collections of $58.8 million were $6.9 million, or 13.3 percent, more than prior year collections and $7 million, or 10.6 percent, below the estimate.

Monthly revenue tables are available on the OMES website: http://www.ok.gov/OSF/News/March_2014_Financial_Report_Data_Tables.html

Auditor Gary Jones Eyes Long-range Goals

Auditor’s Office

Auditor & Inspector Gary Jones said today he’s looking forward to a second term and moving ahead with his long range goals.

“I’m glad to be in this position and for the opportunity to remain focused on building upon our achievements of the past three years,” Jones said. “I’m fortunate to work with a select group of specialized auditing professionals who are also exceptional public servants.

Among his long-range goals for the agency, Jones says improving technological and digital advances in record storage are at the top of the list.

“We kept our 2011 pledge to eliminate the backlog of county audits and continue to do more work in this area to maintain our ambitious auditing schedule,” Jones said. “I’m going to continue to encourage our lawmakers to embrace the tremendous advantages of conducting performance audits. Our office is all about transparency and accountability. We are a tool the legislature should use to right-size government.”

Jones also advanced an overhaul of the state budgeting process during his first term. As the name implies, Needs Based Budgeting would fund an agency based on its actual need and not simply starting with the amount money it was appropriated the previous year.

“Many state agencies have millions of dollars in reserve and revolving funds that should be used more effectively to help fund state government,” Jones said. “We need to look at programs and make a legitimate determination as to whether each is efficiently delivering government services.

“It’s relatively easy to get distracted by things that are controversial instead of tackling less exciting, though no less critical, issues,” Jones said. “We’ll continue to do everything possible to make sure we don’t become the first generation of Americans to leave our children and grandchildren worse off than when we got here.”

Murphey: The Raid On Transportation Funding


Rep. Jason Murphey

This year’s legislative session has passed its midpoint and in just a few weeks Oklahomans will be able to breathe a sigh of relief as the Legislature stops making new laws, adjourns, and goes home. What follows is an update of some of this year’s significant legislative proposals.

Who can forget the controversial national popular vote proposal which would have forced Oklahoma’s presidential electors to vote for the presidential candidate who received the most votes nationwide? If approved, the legislation would have made Oklahoma the first “red” state to sign onto the initiative.

The bill was approved by the Senate early in the year and sent to the House of Representatives for its approval. The group advocating for the bill offered various travel junkets to legislators, including a proposed trip to St. Croix which would have been provided to members of the House just days before they voted on the bill. In order to continue its progress, the bill needed to be heard in a House committee last week. It was not heard and appears to have expired. After the word got out about the St. Croix trip, it was unceremoniously canceled.

I received many responses to the article about the proposed $30 million expenditure for the American Indian Cultural Center and Museum in Oklahoma City. Many of those who responded were extremely passionate in opposition to the proposal. This proposal remains alive for the time being as it has been approved by Senate and House committees. However, there are many in the House who are passionately opposed to the idea. Over 30 House Republicans, including myself, have signed a petition in opposition.

I have written about the proposal to undo our very important reform of Oklahoma’s construction purchasing laws. Our reform was approved last year and attempts to stop the practice of “sole specing” which occurs when government agencies draw up construction contract specifications so tightly that only one provider can be awarded the contract. This results in higher than market costs and punishes taxpayers. Last year, we had to work very hard to preserve this reform, and those who would undo our work are trying again this year. I will say that the authors of the bill who would reverse the reform have been very accommodating to my suggestions and I very much hope the reform will stay in place. For the time being, however, their bill remains alive.

A few days ago, a Senate committee made headlines by approving a bill that would take money away from transportation funding. For several years now, I have written of our ongoing effort to ensure that transportation funding increases will catch up with the need to replace dilapidated bridges and state roads. This effort has been a priority since 2005, and the Senate committees’ vote reflected a frightening and unprecedented departure from our effort. Fortunately, I don’t expect the proposal to advance any farther but must say it was shocking that it received committee approval.

Of course, there are many more initiatives that are ongoing. Please never hesitate to let me know if you want to know the status and additional details about a bill which interests you. Just send me the bill number. I can be reached by email at Jason.Murphey@hd31.org.

Murphey: No More Waiting In Line

Rep. Jason Murphey

Not just too long ago, on a nice weekend day, a member of the local constituency stopped to fuel up at an area gas station. As the motorist waited on the gas pump, an off-duty police officer approached and pointed out that his car’s tag had expired. The officer explained that if he saw this car on the street that he would possibly have it towed.

This created a problem as the motorist couldn’t simply go down to the tag agency. It was closed for the weekend. But, he clearly wanted to use his vehicle before Monday. Should he have been forced to give up commuting on the weekend just because he made a simple mistake and forgot to renew on time?

In the past, he would not have had an option. But, times have changed!

In 2009, I authored House Bill 1032 which was subsequently signed into law by then-Oklahoma Governor Brad Henry. House Bill 1032 kicked off a multi-year effort to place state government processes online. The bill required, subject to certain exception, state government to offer access to licenses online. It specifically required state officials to allow you to renew your car tag online.

The Oklahoma Tax Commission and the OK.gov web development team went to work to comply with the new legislation through the creation of Cars.OK.gov. They did a remarkable job of tying together all of the necessary technologies to confirm the payors’ insurance information, car tag information and payment information in real time. This allows someone to have instant confirmation of their renewal.

This was extremely useful to the motorist who had forgotten to renew his registration but still wanted to use his vehicle over the course of the weekend when the tag agency wasn’t open. Cars.OK.gov allowed him to pay and receive instant confirmation.

Cars.OK.gov represents one of the best exceuted modernizations of a licensing process that I have seen. But, it is one of many as state agency after state agency brings their licensing processes online in order to comply with the modernization laws.

Realizing the vision of HB 1032 has required constant attention and follow-up. It’s been vital for us to clear through any legal hurdles which prohibit agencies from carrying out the intent of HB 1032 or which prevent the agency from offering features through the Internet.

For example, this year a modernization project, House Bill 2594, allows the state’s Bureau of Investigation to accept electronic transfer payments from those who are applying for or renewing a Self-Defense Act conceal-and-carry permit. The Bureau has created an online portal for this purpose which should take away a considerable amount of strain upon its employees and a tremendous amount of frustration from those who must apply or renew.

House Bill 2594 has already won approval of both the House and Senate and now awaits the Governor’s signature. It allows the Bureau to accept the electronic funds transfer as payment through the new online portal.

Finally, just days ago, the House approved a measure which enabled the Department of Public Safety to advance its plan for forever bringing to an end the long lines at the drivers’ examination stations. Working with OK.gov, the Department has already deployed its “Inline Online” web portal which allows patrons to schedule their appointment instead of waiting in line. Now, DPS will start offering components of the drivers’ examinations online.

Thanks to the commitment of Oklahoma’s modernization-minded lawmakers and innovative state officials we are moving into a time when there will be very few reasons for why a person should have to wait in line at their favorite bureaucracy.

Fallin: A Way To Fund School Shelters

Governor Fallin

Spring is here, and we can all be thankful for the opportunity to spend more time outdoors and enjoy the beautiful Oklahoma weather. Unfortunately, the changing weather patterns also mean something else: the beginning of tornado season.

Last year’s horrible May storms were an unwelcome reminder that Oklahoma’s weather can be deadly. They were also a reminder that, as a state, we need to do more to protect ourselves, especially our children, from the danger of tornadoes.

Oklahoma currently has over 1800 schools, about a third of which have safe rooms or tornado shelters. In a state where tornadoes are a common occurrence, that just isn’t enough. We need to do more to give our communities the tools they need to make our schools safer for our students and teachers.

Traditionally, all school construction has been proposed, constructed and funded at the local level. That allows local communities to decide what to prioritize in their schools and to take responsibility for the necessary funding. If a school district wants to build a storm shelter – or, for that matter, a new gymnasium – it is done through a bond issue. Each bond issue must be passed locally, with at least 60 percent of the vote, and be funded through property taxes. In most districts, building new storm shelters or safe rooms would cost the average home owner about $2 a month, and in many cases even less.

Unfortunately, some school districts are unable to pursue storm shelters or other safety upgrades because they have reached their legal limit on bonding capacity. They are “maxed out,” so to speak. To help those districts, I’ve asked the Legislature to pass a Constitutional amendment (HJR 1092) that would raise the cap on maximum bonding authority by ten percent for a limited time. Schools that take advantage of this provision would have to use any new bonds for safety upgrades, ensuring the money is going to its intended purpose.

This is a fiscally responsible way to fund safety upgrades in our schools. It doesn’t redirect funds for other priorities – including educational priorities – to new projects. It’s also fair. Communities that have already paid for safety upgrades wouldn’t be asked to fund projects in the rest of the state, something they would be forced to do if state dollars were used.

This resolution has already passed in the state House of Representatives. My hope is it will soon pass in the Senate and go to a vote of the people in November.

But regardless of what the state does, every Oklahoman needs to make sure they are prepared for tornadoes and storms right now. That starts with having a plan.

If you live in tornado alley, you should own a battery operated NOAA Weather Radio with a warning alarm feature. Owning one and setting the alarm will ensure you receive automatic weather updates, even if your power goes out.

Next, you need to know where to go if a tornado or storm is coming your way. A reinforced underground storm shelter, storm cellar, enclosed basement or safe room are the safest places to be.

If you do not own or have access to an underground shelter, consider building one. The Oklahoma Office of Emergency Management offers a lottery system for storm shelter rebates of up to $2,000. You can register for the program, called SoonerSafe, at www.soonersafe.ok.gov. The SoonerSafe program has helped nearly 1,200 homeowners fund safe rooms since 2011. In fact, since 1999, Oklahoma has funded more than 12,000 safe room rebates totaling over $30 million.

If getting underground or into a safe room is not an option, it’s important to get inside a strong building and go to an interior room, away from doors and windows, on the lowest floor possible. Cover up – use whatever you can to protect yourself from flying debris.

Above all else – do not get caught in a car or a mobile home with a tornado heading your direction. Neither offers any significant protection, and both are likely to get thrown in high winds.

Oklahomans are used to tornadoes. When a tornado hits, we do what we can to stay safe, we recover, and we rebuild. In most cases, familiarity with storms and tornadoes has made us well prepared, resilient, and ready for action. But in some cases, it can make us complacent.

Don’t let that happen to you or your family. Be prepared and have a plan. Let’s make sure we have the safest spring season yet.

Fallins Signs Film And Events Bills

Bills that will help attract moviemakers and events to the state have been signed into law by Governor Fallin: http://newsok.com/gov.-mary-fallin-signs-bills-to-attract-filmmakers-and-national-events-to-oklahoma/article/3949627

Miller: Positive Momentum Continues In State Economy

Treasurer’s Office

Energy production, personal income and consumption pushed revenue collections higher in March, State Treasurer Ken Miller announced today as he released the monthly gross receipts to the treasury report.

Sign up for Treasurer Miller’s newsletter, the Oklahoma Economic Report: http://www.ok.gov/triton/modules/oknotify/index.php?id=222

Miller said collections in March grew by more than four percent over the same month of last year. The growth rate for the past 12 months also topped four percent.

“In March, collections from oil and gas extraction and personal income grew by double digits, while sales and motor vehicle collections expanded by more than five percent,” he said. “Clearly, Oklahoma’s economy continues to do relatively well.”

Total monthly collections have exceeded the prior year 10 times in the past year, with oil and gas production taxes up for 11 consecutive months.

The March report shows only one major revenue stream with collections lower than last March – corporate income tax, which has dipped below the prior year in seven of the past 12 months.

Positive data

Miller said the state’s personal income, as announced late last week by the U.S. Bureau of Economic Analysis (BEA), sheds a positive light on the Oklahoma economy.

“Last year, Oklahoma’s total personal income grew faster than the national average, as it has done in each of the four years since the Great Recession,” he said. “Total personal income was up 3.3 percent in 2013 at $160.1 billion, the seventh-highest growth rate in the nation.”

The BEA report credits the energy industry as having the most significant impact on the growth rate.

Unemployment figures also brought encouraging news to Oklahoma, Miller said.

“The state’s unemployment rate dropped to 5 percent in February, a reduction of 0.2 percentage points from January,” he said.

March collections

The revenue report for March shows gross collections at $985.02 million, up $40.46 million or 4.3 percent from March 2013.

Gross income tax collections, a combination of personal and corporate income taxes, generated $387.32 million, an increase of $20.4 million or 5.6 percent from the previous March.

Personal income tax collections for the month are $287.06 million, up $37.03 million or 14.8 percent from the same month of the prior year. Corporate collections are $100.26 million, down by $16.63 million or 14.2 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $343.84 million in March. That is $16.26 million or 5 percent ahead of March 2013.

Gross production taxes on oil and natural gas generated $75.57 million in March, an increase of $8.69 million or 13 percent from the prior year. Compared to February reports, gross production collections are up by $5.74 million or 8.2 percent.

Motor vehicle taxes produced $58.91 million, up by $3.36 million or 6 percent from a year ago.

Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $119.38 million during the month. That is $8.25 million or 6.5 percent less than last March.

Twelve-month collections

Between April 2013 and March 2014, gross revenue totals $11.57 billion. That is $468.77 million or 4.2 percent higher than collections for the previous 12-month period.

Gross income taxes generated $4.15 billion for the period, reflecting an increase of $140.02 million or 3.5 percent from the prior 12 months.

Personal income tax collections total $3.59 billion, up by $189.25 million or 5.6 percent from the April 2012 to March 2013 period. Corporate collections are $656.78 million for the period, a drop of $49.23 million or 8 percent over the previous period.

Sales taxes for the period generated $4.3 billion, an increase of $112.54 million or 2.7 percent from the prior 12-months.

Oil and gas gross production tax collections brought in $816.53 million during the 12 months, up by $106 million or 14.9 percent from the previous period.

Motor vehicle collections total $751.84 million for the period. This is an increase of $61.61 million or 8.9 percent from the trailing 12 months.

Other sources generated $1.55 billion, up $48.59 million or 3.2 percent from the previous 12 months.

Cathey Presented Consumer Champion Award

Attorney General’s Office

The Attorney General’s Office Tuesday honored David Michael Cathey with the 2014 Brad Edwards Consumer Champion Award for his work to protect Oklahoma consumers from fraud.

Cathey, of Durant, is a fraud investigator for the District 19 District Attorney’s Office, which covers Atoka, Bryan and Coal counties. He also helps foster regional and statewide networking among law enforcement and other professionals to investigate fraud through the Texoma chapter of the MAFIA (Metro Area Fraud Investigators).

“Cathey’s dedication to protect Oklahomans against criminals and educating citizen groups statewide on how to avoid fraud is an example to all of us who serve and vow to protect our citizens,” Attorney General Pruitt said. “He has made a significant contribution to the education and awareness of consumer issues to help protect communities from exploitation. This honor is well-deserved.”

Cathey began his career as part of Capitol Patrol at the State Capitol, later serving as a trooper for the Oklahoma Highway Patrol. While working for OHP, he earned a bachelor’s degree in criminal justice from East Central University. He also graduated from the 10th Oklahoma State Bureau of Investigation Academy and served as a special agent for the OSBI with special training in investigation of financial crimes, computer crimes and general investigations.

Following retirement from the OSBI, Cathey became an investigator for District Attorney Emily Redman, and is assigned to investigate forgeries, embezzlement and bogus checks. He works with an economic crime task force operated by the U.S. Secret Service and is deputized as a special deputy U.S. Marshal.

In her nomination of Cathey, Elaine Dodd, vice president of the fraud division at the Oklahoma Bankers Association, said Cathey goes beyond his required duties to help the community, including being the driving force behind the most active fraud investigators group in Oklahoma.

“In addition to his numerous cases, David has been a one-man consumer education guru. He doggedly pursues great training materials to protect our elderly consumers and ensures banks and officers have the tools at hand. In every corner of our state, David is known, respected and admired for his untiring consumer protection!”

As part of his duties, Cathey works with professional groups, law enforcement and civic groups statewide to tackle various aspects of fraud from lottery scams to high-level cyber fraud.

“Cathey embodies the true spirit of this award with his outstanding work to investigate fraud and protect Oklahomans from scams,” Attorney General Pruitt said. “We are happy to recognize David and his contribution to help educate Oklahomans about consumer fraud.”

The Brad Edwards Consumer Champion Award is given each year to a deserving Oklahoman in honor of the late Brad Edwards, a consumer advocate in Oklahoma City for 25 years and host of KFOR-TV’s “In Your Corner” segment.

The winner is chosen based on exemplary and voluntary consumer service by initiating consumer advocacy programs, actively participating in such activities or taking significant action that protects or benefits Oklahoma consumers. The annual award announcement is held in conjunction with Oklahoma Consumer Protection Day.


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