Senate Media Division
The Senate has given approval to two measures aimed at increasing transparency in government. The full Senate voted in favor of Senate Bill 1513, by Sen. David Holt, which ensures dash-cam video recorded by the Oklahoma Highway Patrol (OHP) would be subject to the state’s open records law. Senate Bill 1497, also by Holt, would enable citizens to seek injunctions when public bodies are in violation of the state’s open meetings law. Both measures were approved on Tuesday afternoon with wide bipartisan support.
Holt explained under current law, audio and video recordings by other law enforcement agencies, including local police and sheriff’s departments, are subject to Oklahoma’s open records act, but the OHP is exempt.
“Law enforcement has tremendous authority over the rest of us—they can take away our liberty. I believe these recordings will show that overwhelmingly, they are doing their job as they should, but if they are not, the public has a right to know,” said Holt, R-Oklahoma City. “This bill simply ensures parity—in fact when I presented this bill in committee, OHP spoke in favor of its passage.”
A second measure would ensure citizens can bring a civil suit to seek injunctive relief for violation of the state’s open meetings act.
“Right now, if a public body violates the Open Meetings Act by barring someone from a meeting or not properly posting information about what they’re taking up, it’s up to local law enforcement or the prosecutor to do something about it—but that may not be a top priority when they are dealing with violent crime and other problems in the community,” Holt said. “This gives the public the same right they have under the Open Records Act by allowing them to file a civil suit.”
Holt noted the measures were approved just ahead of FOI Oklahoma’s Sunshine Conference this coming weekend and Sunshine week.
“Transparency promotes greater accountability and ultimately ensures the government does a better job on behalf of its citizens,” Holt said.
SB 1513 was approved 40-3, and SB 1497 was approved unanimously on a vote of 43-0. Both measures now move to the House for further consideration.
General Revenue Fund (GRF) collections in February fell 8.1 percent below the official estimate due in large part to another month of abnormally large corporate income tax refunds.
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.
February collections to the GRF totaled $270.7 million, which is $16.1 million, or 6.3 percent, more than collections for February 2013 and $23.7 million, or 8.1 percent, below the official revenue estimate upon which the Fiscal Year 2014 appropriated state budget is based.
“Even though the estimate wasn’t met, getting any growth in February is a good thing since it is almost always the weakest month of the fiscal year,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “Big picture, not much has changed. Revenues are sufficient to maintain the current year while agencies continue planning for flat or slightly reduced appropriations next year.”
For the first eight months of FY 14, GRF collections totaled $3.5 billion, which is $8.3 million, or 0.2 percent, above prior year collections and $174 million, or 4.8 percent, below the official estimate.
“We had some rough waters early in the fiscal year, but we’re sailing smoother now, as expected,” Doerflinger said.
Corporate income tax receipts continued to decline in February, with no corporate income tax receipts being apportioned to the GRF after another month of unusually large refunds, according to the Oklahoma Tax Commission.
“The continued decline in the corporate category is a real quagmire because, by and large, Oklahoma companies are going strong and growing our economy. The catch is that isn’t always directly reflected in corporate income tax revenues,” Doerflinger said. “The big reason for the decline isn’t decreased corporate income, but increased refunds on corporate tax returns. Other likely factors are the recent expiration of a moratorium on several business tax credits and new trends in business organizational decisions.”
Corporate income tax refunds in February totaled $21 million while corporate income collections totaled $8.3 million. More than 75 percent of the corporate income tax refund amount was attributed to one entity for a refund due on a tax year 2012 corporate return, according to the Oklahoma Tax Commission.
Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports.
Major tax categories in February contributed the following amounts to the GRF:
- Total income tax collections of $31 million were all collected from individual income tax due to the large amount of corporate refunds processed during the month. Total income tax collections of $31 million were $11.8 million, or 61.7 percent, more than prior year collections and $1 million, or 3.2 percent, above the estimate.
Individual income tax collections alone were $12.7 million, or 69.5 percent, more than prior year collections and $7.7 million, or 32.9 percent, above the estimate. The large discrepancy between February 2013 and February 2014 individual income tax collections is largely due to the fact that February 2013 saw unusually low income tax collections due to a remittance anomaly caused by repercussions from the federal government’s “fiscal cliff” aversion in January 2013.
- Sales tax collections of $151.7 million were $390,547, or 0.3 percent, more than prior year collections and $9.6 million, or 6 percent, below the estimate.
- Gross production tax collections of $34.9 million were $1.2 million, or 3.5 percent, less than prior year collections and $1.9 million, or 5.1 percent, below the estimate.
Natural gas collections of $4.2 million were $6.2 million, or 59.7 percent, less than prior year collections and $12.9 million, or 75.4 percent, below the estimate.
Oil collections of $30.7 million were $5 million, or 19.3 percent, more than prior year collections and $11 million, or 56 percent, above the estimate. Higher than expected oil prices continue to push revenue from this source above the estimate.
- Motor vehicle tax collections of $17.1 million were $4.5 million, or 35.4 percent, more than prior year collections and $1.8 million, or 11.9 percent, above the estimate.
- Other revenue collections of $36 million were $632,822, or 1.8 percent, more than prior year collections and $15 million, or 29.4 percent, below the estimate.
Monthly revenue tables are available on the OMES website: http://www.ok.gov/OSF/News/February_2014_Financial_Report_Data_Tables.html
Today, the House of Representatives overwhelmingly voted for a measure that would create a defined-contribution pension system for future state employees.
House Bill 2630, by Rep. Randy McDaniel, creates a defined-contribution system for new employees who are part of the Oklahoma Public Employee Retirement System (OPERS) based off of models used in the private sector. If signed into law, the system will phase out the state’s current and broken system over the next several decades, reduce the state’s unfunded pension debt and allow employees the retirement mobility that the modern job market demands.
“Oklahoma faces a pension crisis,” said House Speaker Jeff Hickman, R-Fairview. “The state currently carries more than $11 billion in pension debt, and the system is unsustainable. Service and hard work should be compensated, and our state employees and taxpayers deserve a system that is modern, efficient and sustainable.”
As of the current fiscal year, roughly $820 million is allocated in the state budget to address past unfunded pension debt. This measure would not only create pension stability, but would also free up hundreds of millions of dollars overtime that could be used for higher salaries for state employees, education and transportation.
Current state employees would remain under the old system and the bill would not impact current retirees.
“The 21st-century job market demands mobility and greater employee control of retirement benefits,” said McDaniel, R-Oklahoma City. “To continue to attract skilled employees and provide quality services, the state of Oklahoma has to provide a competitive compensation package. This reform makes great strides to ensure that state service is a desirable career choice.”
“We applaud the House for its efforts to seriously address the issues of compensation and pay for state employees,” said Sterling Zearley, Executive Director of Oklahoma Public Employees Association. “Years of neglecting this issue have led to compensation well below market resulting in high turnover and low staffing. We appreciate the Speaker of the House and House members for recognizing the urgent situation and their willingness to conduct meaningful dialogue with OPEA. We now have the opportunity to develop competitive compensation for those who serve the people of Oklahoma.”
HB 2630 requires new state employees to contribute a minimum of 3 percent to their retirement, and the state would match the employees’ contributions up to 7 percent. The measure would not impact hazardous duty employees including correctional officers, probation and parole officers, or fugitive apprehension agents employed by the Department of Corrections.
If signed into law, the defined-contribution system would take effect November 1, 2015.
HB 2630 will now go to the Senate for consideration.
Oklahoma’s monthly gross receipts to the treasury report shows total state collections continued to rise in February, the fourth anniversary of the low point reached following the Great Recession, State Treasurer Ken Miller said today.
“Collections, as they did this month, have topped the same month of the prior year in 41 of the past 48 months,” Miller said. “The state’s gross receipts have grown by almost 25 percent in the last four years.”
Twelve-month gross receipts have expanded by $2.2 billion or more than 23 percent since exiting their trough in February 2009, eight months following the official end of the last national recession.
Miller said February receipts indicate the key value of the oil and gas industry to the state’s economy.
“Gross production collections are up by more than 10 percent for the month and reflect a 10th consecutive month of year-over-year growth in generated revenue,” he said.
Miller said the gross production revenue increase, which is based on production during December, can be credited primarily to moderate increases in price for the commodities.
Miller observed that corporate income tax and motor vehicle collections also jumped by double digits during February, but cautioned against reading too much into those numbers due to some non-economic factors.
“The 45 percent jump in corporate income tax collections simply exemplifies the wide variances we often see in month-to-month reporting of that revenue stream,” he said. “The nearly 20 percent increase in motor vehicle taxes is skewed due to an accounting anomaly that occurred during 2013 whereby collections were reported as being artificially low. The anomaly will continue through November.”
Positive business conditions
The latest Business Conditions Index for Oklahoma report anticipates continued economic growth, accelerating from January’s report. The February survey shows Oklahoma with a rating of 58.9, compared to January’s 54.7. Numbers above 50 indicate anticipated economic growth in the next three to six months.
The revenue report for February shows gross collections at $818.08 million, up $27.67 million or 3.5 percent from February 2013.
Gross income tax collections, a combination of personal and corporate income taxes, generated $246.64 million, an increase of $11.63 million or 4.9 percent from the previous February.
Personal income tax collections for the month are $238.35 million, up $9.05 million or 3.9 percent from the prior year. Corporate collections are $8.29 million, an increase of $2.58 million or 45.2 percent.
Sales tax collections, including remittances on behalf of cities and counties, total $335.27 million in February. That is $2.03 million or 0.6 percent above February 2013.
Gross production taxes on oil and natural gas generated $69.83 million in February, an increase of $6.66 million or 10.6 percent from last February. Compared to January reports, gross production collections are up by $6.1 million or 9.6 percent.
Chad Warmington, president of the Oklahoma Oil and Gas Association, said, “The February gross receipts report from Treasurer Ken Miller illustrates both the significance and strength of Oklahoma’s oil and gas sector. The nearly $100 million annual increase in gross production revenue to the state from oil and gas activities, spearheaded primarily by Oklahoma companies, is a testament to the significance of this industry to the economic well-being of our state’s economy. The economics of drilling wells is exceptionally sensitive. Oklahoma’s energy companies have options on where they can deploy their capital budgets. Policymakers need to be careful not to negatively impact activity by increasing taxes on the companies who are actively investing capital in drilling wells in Oklahoma. The slightest adjustment could result in companies moving their rigs to other states with better geology and economics. Oklahoma’s economy doesn’t run on empty, it runs on energy – oil and gas.”
Motor vehicle taxes produced $59 million, up by $9.56 million or 19.3 percent from the prior year.
Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $107.33 million during the month. That is $2.22 million or 2 percent less than last February.
Between March 2013 and February 2014, gross revenue totals $11.53 billion. That is $452.24 million or 4.1 percent higher than collections from the previous 12-month period.
Gross income taxes generated $4.13 billion, reflecting an increase of $144.33 million or 3.6 percent from the prior 12 months.
Personal income tax collections total $3.55 billion, up by $148.81 million or 4.4 percent from the March 20121 to February 2013 period. Corporate collections are $582.42 million for the period, a decrease of $4.47 million or 0.8 percent over the previous period.
Sales taxes for the period generated $4.28 billion, an increase of $91 million or 2.2 percent from the prior 12 months.
Oil and gas gross production tax collections brought in $807.84 million during the 12 months, up by $96.52 million or 13.6 percent from the previous period.
Motor vehicle collections total $748.48 million for the period. This is an increase of $51.26 million or 7.4 percent from the trailing 12 months.
Other sources generated $1.56 billion, up $69.13 million or 4.6 percent from the previous 12 months.
Senate Communications Division
Two Senate bills to help better address the needs of Oklahoma’s veterans will soon be considered in the House. Senator Frank Simpson is the principal Senate author of Senate Bills 1610 and 1970, which both received unanimous approval in the Senate last week.
SB 1610 redefines “veteran” in Oklahoma statutes to include all honorably discharged veterans regardless of how long they served. The measure makes all veterans eligible for state benefits including admission into the state’s seven veterans centers. Currently, only those who served during World War II, Korea, Vietnam and the Persian Gulf are eligible for state benefits or are allowed into the veterans centers.
“By simply clarifying the definition of a veteran in Oklahoma, we’ll be allowing an additional 78,000 veterans to be eligible for state benefits and have the opportunity, if they wish, to spend their final days in a state veterans center with their brothers in arms,” said Simpson, R-Ardmore.
SB 1970 changes the name of the War Veterans Commission of Oklahoma to the Oklahoma Veterans Commission to expand the representation of the commission to include a broader demographic of Oklahoma veterans. The bill specifies that at least eight of the nine members of the commission will be honorably discharged veterans, one of the members will be a Persian Gulf War veteran and another will be someone who has a family member residing in one of the state’s veterans centers.
“The current membership of the commission doesn’t properly represent the interests of all of Oklahoma’s veterans,” explained Simpson. “These changes will ensure that all veterans have a voice and representation in this commission, which will hopefully help the state better address their needs.”
The bills will next be heard in the House Committee on Veterans and Military Affairs.
“I hope the House will take up and approve these important measures quickly so that we can get our veterans the services they need and bravely earned fighting for their country and state,” said Simpson.
Rep. Jason Murphey has been designated as one of Government Technology magazine’s top 25 Doers, Dreamers and Drivers for his work to apply innovation and technology in Oklahoma state government. Since 2002, Government Technology has honored those individuals who have transformed the public sector through the smart use of technology.
Murphey and the Oklahoma government modernization project are featured in the March edition of the magazine which should be arriving in mailboxes across the nation in the next few days.
The article highlights the savings to Oklahoma taxpayers and new transparencies resulting from the project.
“I grateful to the dedicated members of the Government Modernization Committee who have worked together on the modernization, efficiency and transparency proposals and who made the government modernization project a success and thus eligible for this type of national recognition,” stated Murphey.
Government Technology and its sister publications are an award-winning family of magazines covering information technology’s role in state and local governments. Through in-depth coverage of IT case studies, emerging technologies and the implications of digital technology on the policies and management of public sector organizations, Government Technology chronicles the dynamics of governing in the information age. Managers, elected officials, CIOs and technology staff at all levels of government gain IT news and event information from Government Technology magazine.
The new Oklahoma Economic Report from the State Treasurer’s Office is out.
In this issue, Governor Fallin makes her most definitive statement yet on bonds being a responsible fiscal tool for a low-debt state like Oklahoma.
Download and read it now.
The new report and all previous issues are available at the Treasurer’s web site: http://www.treasurer.ok.gov/
Stories this month include:
* Commentary by Governor Mary Fallin: The time to fix the Capitol is now
* Red, blue and green: An analysis of federal government spending in the states
* January a healthy month for state economy
* Gross receipts and General Revenue compared
* Economic indicators
The Commissioner of Public Safety, as authorized by the Governor, has announced that due to inclement weather state agencies may temporarily reduce non-essential services beginning at 12:00 AM Monday, March 3rd 2014, and ending at 11:59 PM Monday, March 3rd, 2014, for the following counties: Oklahoma, Pottawatomie, Cleveland, McClain, Lincoln, Logan and Canadian Counties. State employees designated to maintain basic minimum services (staff essential functions) should remain at work or report to work as scheduled.
Authority: Commissioner Michael C. Thompson #1
Oklahoma Council of Public Affairs
Few policy changes being considered by the Legislature have the potential for more positive effects than efforts led by Gov. Mary Fallin, state Rep. Randy McDaniel, R-Oklahoma City, and state Sen. Rick Brinkley, R-Owasso, to enact further state retirement reforms.
Oklahoma’s six active defined benefit retirement plans have amassed a staggering $11 billion in unfunded liabilities. The debt ultimately is guaranteed by taxpayers and threatens the retirement promises owed to current and retired employees. This has happened because of the susceptibility of government-defined benefit plans to political irresponsibility, overreliance on investment returns and overburdening the system with participants compared to the contributions the state can afford. Most of the private sector has moved away from defined benefit plans, recognizing their structural flaws.
Oklahoma’s unfunded retirement liabilities exceed the state-appropriated budget by 50 percent and surpass annual state tax collections by nearly the same amount. State government spends a staggering amount on retirement contributions – more than $1 billion annually. According to the Oklahoma State Pension Commission, only one system has met its targeted investment return over the last 10 years.
The governor, McDaniel and Brinkley have made a reasoned case that it’s time to place new, non-hazard-duty state government employees into a defined contribution plan. Moving to a defined contribution plan will allow the state to stop putting more employees into a broken retirement system and stop the accumulation of new debt. Further, it will make sure government can keep its promise to current employees and retirees, while providing a fair and competitive retirement benefit to a new generation of mobile workers who likely will have five to seven different careers.
Those who want to preserve the broken status quo are lobbying lawmakers hard to oppose these common-sense legislative proposals, denying fact, historical precedent and the needs of future employees in the process. Thankfully, the governor and leading policymakers are resisting such foolishness.
Oklahomans have diverse beliefs about the proper size and role of government. However, one thing we should be able to agree on is the principles of mathematics and reality. Cities like San Diego in a deep blue state have come to the reckoning of the broken structure of defined benefit plans, charting a new course forward. It’s time for Oklahoma to do the same.
Michael C. Carnuccio serves as president of the Oklahoma Council of Public Affairs (www.ocpathink.org).
Senate Communications Division
The full Senate voted 40-0 Thursday in favor of legislation requiring advance notice before state parks can be closed. Sen. Jerry Ellis presented SB 1959 both in committee and on the floor. The measure, authored by Sen. Sean Burrage, D-Claremore, and co-authored by Ellis, D-Valliant, would require the Oklahoma Tourism and Recreation Department to notify local governments before closing any state park, parkland or public recreation facility within the state agency’s jurisdiction.
“In 2013, the Oklahoma Tourism Commission voted to take away the status of Hugo State Park. That would have been devastating to our local economy,” Ellis said. “Hugo State Park survived the axe, but the year before, seven other state parks were not so lucky, and all of them were located in rural Oklahoma. People need to remember—as goes rural Oklahoma, so goes Oklahoma. Simply shutting down these parks with no warning and without giving our rural areas adequate opportunity to make their case will ultimately hurt the whole state.”
The legislation would require Tourism to provide 60 days’ notice to the governing authority of each municipality and county that was home to a state park or similar facility that was slated for closure or to have its operating hours slashed by 50 percent or more. The notice must be made in writing and sent to the chairperson of the county commissioners and the mayor of the municipality.
“The Department of Tourism is about promoting and helping support destinations and activities that can boost our economy—but I am here to tell you that rural Oklahoma is just as important to that mission as our metropolitan areas,” Ellis said. “The dollars spent by tourists in our rural communities are vital to their ability to grow, prosper, and attract and keep jobs and workers.”
SB 1959 now moves to the House of Representatives for further consideration.