Total GRF collections for the first 10 months of the fiscal year are $4.6 billion, which is $40 million or about 1 percent above total collections for the same period a year ago, and $50.7 million or 1.1 percent higher than the official estimate upon which the Fiscal Year 2013 state budget is based.

“The economy is kicking and revenues are right on pace,” Doerflinger said. “Oklahoma’s economy has shown real resilience in its ability to withstand challenges like federal defense and aerospace sector cutbacks and continued natural gas revenue losses. It instills confidence to have a steadfast economy like ours in times like these.”

Compared to the same month last year, net income tax collections to the GRF were up by nearly 20 percent, with individual income tax collections up 14 percent and corporate income tax collections up 50 percent following a 40 percent increase in March. Year-to-date income tax collections are $2.1 billion, or 13.5 percent above projections.

“When Oklahoma citizens and companies do well, so do state revenues,” Doerflinger said. “Last month’s income tax aberration was just that, as we said, and shows why we always emphasize that income taxes can fluctuate greatly from month-to-month. The big picture shows this year’s income tax revenues are trending higher than anticipated.”

In addition to general growth, April’s income tax collection increase was also spurred by the Oklahoma Tax Commission reporting that it received several large payments from individuals who filed for extensions in 2012, driving collections up for the month.

With a 5 percent unemployment rate that is 2.6 percent lower than the national rate and lowest of any of its six bordering states, Gov. Mary Fallin said Oklahoma is poised for more growth.

“Pro-growth public policy pays dividends to the public and private sectors alike,” Fallin said. “Oklahoma is already doing well economically, and we’re on the cusp of doing better. Our ability to retain and attract new businesses was strengthened even more this legislative session through income tax reductions, investments in education and long-needed reform of our workers’ compensation system. We’re in a fantastic position to expand on the economic success we’ve seen these past few years.”

The balance in the state’s constitutional Rainy Day Fund is $577.5 million, a near record, after totaling just $2 when Fallin took office in January 2011.

“Another good indicator of the state’s solid financial position is that it’s looking more likely each day that the Rainy Day Fund will soon surpass $600 million for the first time ever,” Doerflinger said.

Sales tax and motor vehicle tax collections decreased in April by 3.4 percent and 12.9 percent, respectively, compared to prior year collections. The Tax Commission reported that the sales tax revenue reduction is partly tied to companies receiving higher than usual refunds that are linked to various sales tax exemptions.

“Declines in these areas are likely also influenced by our thousands of federal employees who are understandably holding back on spending in light of the federal budget uncertainty caused by sequestration. The sequester is a slow drip that we’re continuing to monitor closely,” Doerflinger said.

Doerflinger is director of the Office of Management and Enterprise Services, which issues the monthly GRF reports. The GRF is the state’s main operating fund and is made up of about 70 revenue sources. It is where all state taxes and fees flow, except those dedicated or earmarked to specific programs.

Major tax categories in April contributed the following amounts to the General Revenue Fund:

• Income taxes – The total collected from individual and corporate income taxes in the month of April was $427.6 million, which was $70.6 million or 19.8 percent more than prior year collections and $56.2 million or 15.1 percent above the estimate.
  
  Individual income tax receipts of $346.5 million were $43.5 million or 14.4 percent more than the prior year and $26.6 million or 8.3 percent above the estimate.
  
  Corporate tax collections in April contributed $81.1 million to the GRF, which was $27 million or 50 percent above collections for the same month of 2012 and $29.6 million or 57.5 percent above the estimate.
• Sales tax – The Tax Commission apportioned $153.3 million in sales tax collections to the GRF from April collections, which was $5.3 million or 3.4 percent less than the prior year and $15 million or 8.9 percent below the estimate.
• Gross production tax – Gross production tax collections from April contributed $34.5 million to the GRF after rebates. This amount is $19.6 and 131 percent above April collections from 2012 and $8.7 million or 20.2 percent below the estimate.
  
  Collections from natural gas accounted for $8.3 million, which was $6.6 million or 44.5 percent below prior year collections and $0.2 million or 2 percent below the estimate.
  
  Collections from gross production oil taxes contributed $26.2 million to the General Revenue Fund. No oil collections were deposited into the GRF in April of 2012. The oil tax contributions were $8.6 million or 24.6 percent below the estimate.
• Motor vehicle taxes – Motor vehicle taxes produced $16.9 million from April collections, which was $2.5 million or 12.9 percent less than the prior year and $2.8 million or 14.2 percent below the estimate.
• Other revenue – Other revenue produced $68.7 million for the GRF in April. This amount was $7.7 million or 12.6 percent more than the prior year and $5 million or 7.8 percent above the estimate.

Insure Oklahoma, a successful, state-based insurance program serving the uninsured, has been scheduled to end December 31 if federal funding is pulled in an attempt to meet requirements of the Affordable Care Act (ACA).

“This is yet another example of Obamacare infringing on state rights,” Oklahoma Insurance Commissioner John D. Doak said. “The federal government is preventing Oklahoma from doing what is best for our state, plain and simple.”

Insure Oklahoma provides subsidies for eligible Oklahomans to purchase health care coverage and currently serves nearly 30,000 working Oklahomans across the state. The program operates from federal Medicaid money, state tobacco tax revenue, employer contributions and employee contributions to fund private insurance plans for Oklahomans who earn up to 200 percent of poverty level.

“The President cannot continue to make positive claims regarding health care due to ACA when the law will completely shut down a very successful health care program such as this,” stated Doak. “This will effectively force thousands of people off of their health insurance plan and into ACA plans, which proves we have been lied to. The ACA has never been about getting health care coverage, but about getting people under a federally-controlled health plan.”

Federal officials have made it clear that without changes to the program, Insure Oklahoma will not be able to continue past the end of the year. Oklahoma is required to let officials know by July 1 if the program will conform to ACA requirements.

Secretary of Energy Michael Ming announced today that he will step down from his cabinet-level position by the end of the month to assume leadership of GE’s new Global Research Center in the Oklahoma City area.

In an April press event, Ming joined Oklahoma Governor Fallin and GE CEO Jeff Immelt to announce the creation of the new facility, which will focus on research in the Oil and Gas sector and is expected to create at least 125 new engineering jobs.  The new center will be a showcase for GE customers from around the world.

“As secretary of energy, I’ve worked with Governor Fallin to ensure that Oklahoma remains a leader, not just in energy production, but in energy research and the development of cutting-edge technologies,” said Ming. “The decision to locate this new, state of the art facility in Oklahoma is a huge victory for the state.  GE’s Global Research Center will spur economic growth and continue to enhance Oklahoma’s reputation as a global hub for energy companies. I am extremely excited for the opportunity to lead the work being done there, and to build on the tremendous partnership between one of the world’s finest companies and the state of Oklahoma.”

The GE Global Research Center will be dedicated to driving oil and gas innovation and technological advancements and accelerate the product development process.  The Oklahoma location will become GE’s eighth global research center and the first to be sector specific. GE’s global research network includes more than 50,000 scientists and engineers.

“This bill creates a more sustainable and competitive contribution plan for future employees,” said Speaker T.W. Shannon, R-Lawton. “The modern workforce is continually evolving and changing, and the state must keep up if we are to successfully recruit from that workforce.”

With a defined contribution plan, the amount of the retirement value provided to an employee depends on the amount of total contribution as well as the gains or losses of the account. Most companies and some states are moving to 401(k) type plans like the one created in HB 2077 because of the improved predictability and other benefits.

“The core principles contained in HB 2077 are enhanced mobility, economic opportunity and financial freedom,” said McDaniel, chairman of the House Economic Development and Financial Services Committee.

There is a cost certainty for the state once the employee decides their own personal contribution level. HB 2077 calls for a dollar-for-dollar match, up to 7 percent of salary. This is very competitive with the matching rules found in America’s largest and most successful companies.

“The modern workforce wants more mobility,” said Senator Rick Brinkley, state Senate author and chair of the Senate Pension Committee. “Working for one employer an entire career is becoming uncommon. This legislation also provides superior predictability for the state.”

HB 2077 offers new public employees choices. They can select this new defined contribution plan or they can choose the traditional defined benefit plan.

“The legislation builds on existing infrastructure,” said McDaniel. “This is important to achieving economies of scale immediately for employees to minimize investment expenses, provide a premier selection of investment options and reduce overall risks.”

Following unanimous support in the Senate, HB 2077 passed the House 72-20 and has been sent to the Governor for her approval.

As a way to recognize state employees for the role they play in providing core services to Oklahomans, the Oklahoma Public Employees Association (OPEA) has requested state agency directors provide a one-time performance payment for their staff using existing agency funds. These payments were authorized in legislation approved by both the House and Senate and was scheduled for conference committee but funding for them was not included in the recent legislative budget agreement.

“Recent reports have called into question state agencies’ practice of holding on to funds for future projects or expenses. While we can certainly understand the need for agencies to keep some money in reserve, there is no greater need right now among state agencies than the need to retain good employees,” said OPEA Executive Director Sterling Zearley. “We are asking agency directors to see if they can find the money within their current agency budget to fund a performance payment for their staff.”

State agencies have difficulty keeping some critical positions filled. Employees who keep Oklahoma’s roads safe, who watch over violent offenders or take care of children and veterans have difficult jobs and agencies struggle to keep employees because of low pay. The 2014 budget agreement does not fund any salary increases or a performance payment for these and other positions. In the past, smaller agencies have had the ability to give raises while larger agencies have not due to the number of employees.

“The performance payment would not fix the staffing problem at any of our agencies. It would, however, serve as recognition that workers have done a great job providing core services despite low compensation. The payment would help offset the rising cost of their insurance and other household expenses,” Zearley said.  We look forward to the upcoming pay study to finally create a plan where employees’ compensation is brought closer in line with other employers.”

A remuneration study is scheduled for this summer and may result in recommendations for how Oklahoma’s state agencies can compete with other employers for staff. Some employees have gone for six years without a pay increase. The study would address long-term compensation needs and a performance payment now would provide some immediate relief.

“Until Oklahoma develops a competitive pay philosophy, we will have to continue to find ways to retain workers and limit costly employee turnover,” he said. “Looking at state agencies’ accounts to see if there is some way to pay for the performance payment now would be a step we could take in the meantime.”

House Speaker T.W. Shannon, R-Lawton, today announced the following appointees to the DHS Citizen Advisory Panels:

Beverly Coon – DHS Citizen Advisory Panel for Children and Family Issues

Beverly Coon is currently an adjunct professor at UCO and a licensed clinical social worker. Coon leads a life of service. She is an active volunteer at the Crossings Community Center Mental Health Clinic. She is a former board member for the Red Cross and has served on the Child Death Review Board.

Dr. Robert Eskew – DHS Citizen Advisory Panel for Disability Issues

Dr. Eskew is president and co-owner of Physical Rehabilitation Associates where he specializes in physical therapy for those with disabilities. Dr. Eskew has cerebral palsy and has made it his life’s work  to advocate for and work with children and adults with disabilities.

Haley Blood – DHS Citizen Advisory Panel for Administration

Haley Blood currently serves as the membership director for the Oklahoma Public Employees Association.   Blood also brings inside experience to the table. She is the acting OPEA DHS Agency Relations Coordinator and works with DHS employees at all levels.

Forrest Claunch – DHS Citizen Advisory Panel for Aging Services

Forrest Claunch is a former Oklahoma state representative. He served in the Legislature from 1994 to 2004. He has also served as the executive director of the Oklahoma Council of Public Affairs.

“These men and women have the skills and passion for helping those who are most vulnerable,” said Speaker Shannon, R-Lawton. “Their experience and input will help shape policies and procedures that will positively impact the lives of many Oklahomans who are truly in need of services and attention.”

Panelists can serve in their appointed positions until July 1, 2016.

State Treasurer Ken Miller has announced the receipt of one of two annual tobacco settlement payments. The $64.8 million payment brings the total paid to the state under the Master Settlement Agreement since 1999, the year payments began, to $1.04 billion. An additional payment is expected later this week.

Miller said 75 percent of the annual payment, or $48.6 million, went directly into the Tobacco Settlement Endowment Trust Fund as mandated by the Oklahoma Constitution.

“The money received is being invested to generate additional funding for the important work supported by the tobacco trust – including cancer research and fighting tobacco addiction,” said Miller, who chairs the trust fund’s board of investors. “The people of Oklahoma showed true wisdom in making sure this money is protected to generate investment income to help them live longer and healthier lives.”

This payment brings the trust fund balance to more than $797 million. The remainder of the annual payment is divided between a fund used for health care-related appropriation by the Legislature and the attorney general’s evidence fund.

The Tobacco Settlement Endowment Trust Fund was created by a voter-approved constitutional amendment in 2000, which specifies that only the earnings from the trust fund may be spent on programs to improve the health and well being of Oklahomans, particularly children and senior adults. Since June 2001, more than $151 million in earnings have been certified. More than $33.3 million in earnings were certified last year.

In August 1996, Oklahoma became the 14th state to file a lawsuit against the tobacco companies, asking for restraints against the industry and monetary damages for state funds spent treating smoking-related illnesses.

The national Master Settlement Agreement, announced in November 1998, imposed sweeping changes in tobacco advertising, banned tobacco companies from targeting children, allocated funding for tobacco education efforts and provided annual payments based on the number of cigarettes sold in the country. Payments will continue as long as cigarettes are sold.

“My thanks go out to our State Auditor and Inspector Gary Jones, whose hard work will help to guide lawmakers as they seek to improve the services at the Oklahoma Department of Veterans Affairs (ODVA). Clearly, as this report illustrates, improvements are necessary.

“The audit reveals an unacceptable lack of oversight and accountability at the ODVA, particularly at the state’s seven veterans centers. These shortcomings are particularly disturbing in light of multiple accusations of abuse and neglect aimed at agency staff, some of which may have resulted in the death of Oklahoma veterans.

“In light of the deep-rooted problems at the ODVA, I am asking lawmakers to work with me to restore accountability and oversight to this agency. Good legislation has already been filed this session by Senator Frank Simpson, who has been a tireless advocate for improving services to veterans. Senate Bill 629 would require veterans’ centers to be inspected by the Department of Health, ensuring that veterans living in long term care facilities are safe and receiving high quality care and services. A second bill, SB 235, would centralize the management of veterans’ centers, addressing the inconsistencies in quality highlighted in the ODVA audit. I am strongly encouraging lawmakers to send those bills to my desk to be signed into law.

“Moving forward, there are other steps that I believe should be taken to improve services at the ODVA. Currently, the agency’s executive director is appointed by the War Veterans Commission, an unelected body. Responding to the concerns of Oklahomans and changing the culture of the agency is difficult when no lawmaker or elected official has direct control over the appointment of the executive director. Similarly, the public has no one to hold accountable when services suffer. This lack of accountability is particularly disturbing when one considers that veterans may have actually died in these facilities due to poor treatment. Accountability should be restored by allowing the governor to directly appoint the executive director of the ODVA.

“Additionally, the makeup of the War Veterans Commission is inherently lopsided and leaves many veterans and veterans groups without a voice. Currently, all members of the Commission must be chosen from a list supplied by the American Legion, Veterans of Foreign Wars, and Disabled American Veterans. While I support the mission of each one of these organizations and applaud their good work, their combined membership represents only 15 percent of the states veterans and largely excludes younger veterans who served in recent conflicts, such as Iraq and Afghanistan. I believe that excluding the 85 percent of men and women associated with other veterans groups from serving on the Commission is unfair and counterproductive to engaging veterans.

“It is my hope these issues can be addressed in the future as part of a rethinking of how the ODVA does business and delivers its services to veterans. The men and women who have served in the military deserve the highest standard of care and services, and I will continue to work on their behalf.”