FY-2013 Proposed State Budget by OCPA

OCPA BUDGET A STATE BUDGET THAT RESPECTS YOUR FAMILY BUDGET

Submitted by the Oklahoma Council of Public Affairs, Inc. To the Taxpayers of the State of Oklahoma and Their Elected Officials

PROPOSED STATE BUDGET FOR THE FISCAL YEAR ENDING JUNE 30, 2013

About OCPA The Oklahoma Council of Public Affairs (OCPA) is an independent, nonprofit public policy organization— a think tank—which formulates and promotes public policy research and analysis consistent with the principles of free enterprise and limited government.

Guarantee of Quality Scholarship OCPA is committed to delivering the highest quality and most reliable research on policy issues. OCPA guarantees that all original factual data are true and correct and that information attributed to other sources is accurately represented. OCPA encourages rigorous critique of its research. If the accuracy of any material fact or reference to an independent source is questioned and brought to OCPA’s attention with supporting evidence, OCPA will respond in writing. If an error exists, it will be noted in an errata sheet that will accompany all subsequent distribution of the publication, which constitutes the complete and final remedy under this guarantee.

Table of Contents Budget Message ................................................................................................................................................ 1

Government-Wide Reforms .............................................................................................................................. 5

Summary of FY-2013 OCPA Budget ................................................................................................................ 8

FY-2013 OCPA Budget Recommendations Education ............................................................................................................................................ 10 General Government ......................................................................................................................... 19 Public Health ....................................................................................................................................... 25 Human Services ................................................................................................................................. 28 Natural Resources .............................................................................................................................. 31 Public Safety ....................................................................................................................................... 38 Judiciary .............................................................................................................................................. 41

Budget Message

his budget provides what Oklahomans want: lower taxes and a more efficient, effective government. It returns government spending to pre-spendingspree levels while providing much-needed tax relief for Oklahoma families. It allows private businesses and families the opportunity to use more of their hard-earned money according to their priorities, not state government’s priorities. In short, it’s a state budget that respects your family budget. Now you may have noticed that our friends on the Left like to say Oklahoma is a “low-tax state.” To which one must reply: By what standard? University of Oklahoma historian J. Rufus Fears has pointed out that “the American public pays an amount of taxes that no despotic pharaoh in antiquity would have ever dreamt of imposing upon his people.” The average Oklahoman was forced to work more than three months last year before he was able to enjoy the fruits of his own labor. “Tax Freedom Day” arrived on April 2, 2011—that’s the day the average

Oklahoman had finally earned enough money to be able to pay the federal, state and local tax collectors. This tax burden is inappropriate for a free people. Regardless of whether Oklahoma’s tax burden ranks first or 50th in 50-state comparisons (and here’s hoping we can one day get to 50th), the burden is too heavy. Accordingly, the OCPA budget provides for a significant reform of the Oklahoma personal income tax code by eliminating all loopholes, individual-incometax deductions, exemptions, and credits. This reform, coupled with much needed spending reductions in areas that are not core functions of government, allows for a significant reduction in Oklahoma’s individual income-tax rate from 5.25 percent to 2.25 percent—another step toward eliminating the tax altogether and replacing it with nothing. This will put money back into the hands of Oklahoma’s private sector, thus spurring economic activity and even providing some offsetting revenues for the state. But make no mistake, the goal is not to be “revenue neutral.” The OCPA budget provides what Oklahomans

Parties in Control When Spending Approved Spending data are from the Oklahoma Office of State Finance, FY-2010 Comprehensive Annual Financial Report, pp. 152-153, and FY2011 Comprehensive Annual Financial Report, pp. 164-165, http://www.ok.gov/OSF/Comptroller/Financial_Reporting.html.

P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

want: a smaller government that is more efficient and effective. In light of the irresponsible spending spree of FY 1996 to FY 2002 (wherein state appropriations increased more than $1.9 billion—or 49 percent) and the irresponsible spending spree of fiscal year (FY) 2004 to FY 2010 (wherein state appropriations increased more than $2.1 billion—or 41 percent), the OCPA budget returns government spending to a level more appropriate for a state with Oklahoma’s level of capital, job creation, and population. This is necessary. For despite legislative and executive branches filled with professed conservatives, Oklahoma government spending is at an all-time high (as the nearby chart indicates). According to the Office of State Finance, total state expenditures have increased every year from FY 2001 ($9.6 billion) to FY 2011 ($16.64 billion). Policymakers at 23rd and Lincoln do not have a revenue problem. What they have is a spending problem, which is in part a bureaucratic-overhead problem. According to a 2012 publication of The State Chamber’s research affiliate, Oklahoma’s government bureaucracy is among the nation’s largest. Among the 50 states, Oklahoma ranks 14th in the number of state and local government employees as a percent of the population. For all the talk of “maintaining core services,” what policymakers are actually maintaining is bureaucratic bloat. And they’re doing so on the backs of the hardworking taxpayers who elected them to do otherwise. It’s clear that they have more than enough money for their state budget. Now is the time to show some concern for their constituents’ family budgets. The 9 R’s of Fiscal Responsibility What is the core mission of government? This, of course, “is the debate at the heart of government budgeting,” says the John Locke Foundation (JLF), a freemarket think tank in North Carolina. “What should government do? What does the constitution allow it to do? What does it do well? What can it reasonably hand off to other sectors of society?” Government is like Microsoft before broadband,

handing down a proprietary operating system (law) for everyone with little ability to fix bad lines of code. It assumes that a few people running “governmentmodified organizations (GMOs)” can make better decisions than the natural, organic interaction of millions of service users and providers. This setup results in, among other things, a Medicaid program that provides less health care than promised, schools that graduate half of African-American males, colleges and universities that graduate less than a quarter of their students in four years, and targeted tax incentives that fail to create or keep jobs. How did Oklahoma manage to pile up $16.6 billion worth of government? “In good times, I do think that it’s true that government is subject to ‘mission creep,’” former state treasurer Scott Meacham once observed. “When the revenue is flowing maybe there’s a trend to drift into areas that are outside of the core mission or missions of government. What happens when things are going well is that things that are ‘nice to do’ become new programs, but in hard times or tight times, it’s time to look at maybe pruning the tree of government.” Oklahoma, with 3.75 million people and a Gross Domestic Product of $148 billion, is too complex for 149 legislators and several thousand bureaucrats to manage. Oklahoma has a vibrant private sector, and it makes more sense, as JLF points out, to leave more activities in the hands of “individuals and companies who can be contractually bound to produce results, instead of spelling out the methods to state employees and allowing them to choose the results they will achieve.” Government exists to secure our rights to life, liberty, and property. It does not exist to own and operate a third-rate motel chain, to bribe poor women to leave the fathers of their children, to give people food stamps with which to buy cigarettes, or to provide employment for termed-out state legislators. If policymakers focus on providing core services, government can be smaller and taxes can be lower. In crafting a state budget, the analysts at JLF have developed what they call the “9 R’s of Fiscal Responsi-

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

bility” (reprinted below, adapted for Oklahoma).

industries, and other non-core functions of government.

Reform Entitlement Programs. State programs to provide cash assistance, medical care, or other services to the disadvantaged exist to provide a basic “safety net.” Even philosophers of limited government have justified such programs as needed to ensure order and protect public assets and spaces. But these programs must be carefully structured to minimize dependency and encourage personal responsibility. When the state pays nursing home bills for the parents of the middle class, subsidizes the daycare expenses of affluent families, and perpetuates social pathologies such as out-of-wedlock births, it strays far from its constitutional moorings. One of the biggest contributors to Oklahoma’s budgetary problems is rapid growth in the state’s Medicaid program. The countercyclical nature of this program leads to lawmakers expanding Medicaid programs (such as the Advantage Waiver program) to provide new entitlements (and create new dependents) in good economic times that cannot be sustained when downturns in the economy occur. According to the state’s FY 2011 Comprehensive Annual Financial Report, total state spending on social services has grown from $1.59 billion in FY 2005 to $2.25 billion in FY 2011—an increase of 41.7 percent in six years. Total state spending on health services has grown from $3.13 billion in FY 2005 to $4.85 billion in FY 2011—an increase of 54.3 percent in six years.

Redirect Spending to Higher-Priority Uses. According to Article II, Section 2 of the Constitution of Oklahoma, “All persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry.” Thus, it is incumbent upon Oklahoma politicians, when formulating tax and budget policies, to secure the people’s right to enjoy “the gains of their own industry.” The state is obligated to perform its basic functions efficiently while leaving to the people as much of their hard-earned money as possible. During a time in which policymakers find it difficult to fund obligations already in place, it makes little sense to incur new ones. Another way to apply this principle is to sort out which expenditures within a given department or agency are central to the core mission and which are not.

Require More User Responsibility. It is inappropriate to require those who receive core state services, such as law enforcement or public education, to cover a significant share of the cost of those services. But for many other state agencies, their programs or services are not constitutional entitlements or responsibilities. If the state is to continue involvement in these enterprises, it would be appropriate to ask those who benefit to shoulder more of the responsibility of paying for them. Services for which this budget recommends additional user responsibility include state museums, historic sites, parks, costs of regulation for particular

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Reorganize State Government. Even assuming that current fiscal obligations could continue into the next year, there remain different ways of organizing the departments that carry them out. There is unnecessary duplication of core functions throughout Oklahoma state agencies. In short, there are more efficient methods of organizing the various departments. For example, the Oklahoma Scenic Rivers Commission provides mainly tourism and recreation-related activities by its offering of trails or canoe rides in the Illinois River, yet is a stand-alone agency from the Oklahoma Tourism Department. Following on the heels of the 2011 consolidation of administrative agencies in the Office of State Finance, policymakers should continue to reorganize state government. Revive Free Enterprise. Responding to Oklahoma’s economic challenges, some policymakers have concluded that state government should take a more active role in attracting investment and guiding development through additional tax credits, cash subsidies, and other incentive programs. This is a mistake. The available public policy research on state economic development does suggest that overall tax rates,

especially the marginal rates on individual and corporate income, do have a measurable impact on state economic growth rates. By eliminating individual-income-tax programs, marketing subsidies, and other encroachments on free enterprise, we can reduce marginal income tax rates. These tax changes will improve economic competitiveness across the board. By eliminating all individual-income-tax exemptions, deductions, credits, and loopholes—and lowering the individual-income-tax rate to 2.25 percent—this budget puts more than $275 million (for FY 2013) back in the hands of taxpaying Oklahomans to invest and spend as they choose. Restore Civil Society. Nonprofits and charities form a “third” or “independent” sector that delivers important services and benefits that neither governments nor profit-seeking businesses can deliver as effectively. The state should be careful not to supplant these institutions of civil society. Remove Advocacy, Waste, and Race-Based Programs. Laws and programs that invoke racial or ethnic discrimination violate a basic principle of moral government. All such programs should be ended immediately. Similarly, state funds should not be used to

subsidize groups that advocate policies or ideas before government bodies. Taxpayers should not be forced to pay for the propagation of ideas with which they may disagree. For example, state law requires the state to administer and process payroll deductions for purposes unrelated to employment benefits. This must end. Government is instituted solely for the good of the whole, not for special interest groups that use taxpayer money to advance their agendas. Reshape the State-Local Government Relationship. Local control of local revenues should be a central theme whenever possible in the relationship between state and local government. The diverse demographic nature of our state leads to problems in applications of some state programs. Reduce Biases in the Tax Code. Like most states, Oklahoma has developed its state personal income tax code in a piecemeal fashion rather than using tax reform principles to build a coherent and efficient system. This budget provides the spending discipline that will allow for reductions in individual taxes for everyone, thus reducing the need for these individually tailored tax breaks.

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Government-Wide Reforms State Employee Health Insurance Reform. Policymakers should implement the reforms of SB 2052, which was passed by the legislature in 2010 but vetoed by former Governor Brad Henry. The reforms include consolidation of duplicative administrative functions of the state Employee Benefits Council (EBC) and the Oklahoma State and Education Employees Group Insurance Board (OSEEGIB), which is estimated to result in an administrative savings of $2 million to $3 million annually. Non-appropriated revenue of OSEEGIB and EBC is derived from state appropriations for health-benefit payments for employees, so any spending reductions at EBC and OSEEGIB equals savings for state-appropriated agencies. Other features of the reform include implementation of a â&#x20AC;&#x153;winner take allâ&#x20AC;? competitive bidding process for HMO benefits that are offered by the state to employees (this is how most private-sector firms choose health insurance products). This reform, coupled with the stabilization of the benefit allowance for state employees, would result in savings of more than $70 million annually. In addition, the state should reform the OSEEGIB HealthChoice plan so that the insurance offering for state employees is a Health Savings Account plan. With the current generous benefit allowance (which pays well over the costs of health benefits) and implementation of health insurance incentive reforms, all state employees can be converted to Health Savings Accounts without a reduction in the quality of health benefits available to state employees. As a final part of this reform, the state needs to evaluate the cost of continuing to operate its own self-insured plan (HealthChoice), compared to available private health insurance options. If significant long-term savings can be achieved without impacting core health care options for employees, the state should consider this option. Savings FY 2013: $37.8 million (half a fiscal year) Savings FY 2014 and thereafter: $75.6 million (annually)

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Telecommunications Efficiency Audits. Policymakers should require audits of state telecommunications and data communications utilization. Independent IT efficiency firms, for a flat fee or on a contingency basis, can be employed as a negotiator and reviewer of charges from telecommunications and data communications companies used by state agencies. Highly successful Oklahoma companies have used these firms and seen significant savings. Some private-sector companies have reduced from 25 to 50 percent the amount spent annually on telecommunications and data communications. Savings FY 2013 and thereafter: $3 million (annually) Mandatory Performance Evaluations and Hiring Reform. Policymakers should require all state agencies to implement and use rigorous semi-annual performance evaluations for employees. These evaluations would include private-sector-like evaluations of employee computer and Internet time management, benchmarks and requirements for employee output to hours worked, performance and incentive pay for work that leads to the reduction of full-time equivalent employees (FTEs), and so on. Agencies would then be able to make retention decisions based on the results of these initiatives. Some agencies have started these evaluations and discovered startling information about the low workload and low output of some of their employees. In some agencies, more than 6 percent of the FTEs were grossly underperforming their required duties, and contributed little to the completion of tasks at the agency. These evaluations have allowed agencies to reward and reassign duties to performing employees, and separate non-performing employees, thus saving hundreds of thousands of dollars in employee expenses. As noted in the preceding budget message, the state has too many employees; therefore, it is time to reduce FTE authorizations. Many decisions were made during the 2011 legislative session to adjust to reduced appropriations. As with most organizations,

when cuts are necessary, this will result in reduced FTEs. Every agency that has experienced FTE reductions to accommodate available revenue should have its agency FTE authorization reduced to its current FTE level, the new lower level as a result of this past session’s spending reduction, or reductions in the upcoming 2012 session, whichever is lower. Further, to add much-needed accountability to the hiring process, all state-appropriated agencies should be required to notify the Office of State Finance, Division of Personnel Management, and the Governor’s office before any new hires are made. Once the agency has provided a detailed notification and justification for filling the position, the Governor’s office or the Division of Personnel Management will have 30 days to approve or disapprove the new hire. This will prevent future growth in personnel expenses without careful consideration and approval of the Legislature and the Governor. Savings FY 2013: $5.4 million (half a fiscal year) Savings FY 2014: $23.4 million Savings FY 2015: $41.4 million Continued Pension Reform. Policymakers enacted significant pension reforms in 2011, but the work is not done. During the 2012 session, the legislature should implement a defined-contribution (DC) plan (effective July 1, 2012) for all new state (OPERS-eligible) employees. Adhering to the first rule of holes (“when you’re in one, stop digging”), this plan stops the practice of adding new liabilities for new employees. The plan would pay 4 percent of annual salary immediately, increasing to 7 percent of annual salary after 4 years of service. (The state would contribute 4 percent of salary to the employee’s 401(k) beginning when the employee is hired.) The plan would take the difference between the new DC plan contribution and the old DB (definedbenefit) plan contribution and inject it into the system, using it to pay down the debt over time. Savings: Long-term elimination of state pension liabilities and future obligations

Major Asset Sales. The state owns many assets that are not related to core functions of government or are not being utilized. These assets can be sold. The state should privatize or sell assets such as the Grand River Dam Authority, the state’s interest in goodwill and surplus value in CompSource, and multiple other assets. These one-time funds should be used to phase out the state’s income tax. Savings FY 2014: $50 million to $200 million (mutualize or privatize CompSource) Savings FY 2014: $25 million (asset sales) Savings FY 2015: $25 million (asset sales) Savings FY 2014: $300 million (privatize GRDA) Agency, Board, and Commission Reform. Whether it is the Oklahoma Health Care Authority board’s indifference to a high director’s salary and ballooning Medicaid costs, or past Department of Human Services (DHS) commissioners’ indifference and destructive performance, it is time to hold board members accountable. This can be done by making all gubernatorial appointments at the will of the governor. Despite Oklahoma voters’ mandate for right-sizing government, “old guard” board appointments in some cases will outlast a governor, even a governor elected to two terms. This explains in part why higher-education regents allow tuition increases of more than 100 percent in just nine fiscal years, why other boards approve the hiring of lobbyists with taxpayer funds, and why still other boards grant completely undeserved salary increases. Making gubernatorial appointments coincide with the term of the governor provides for accountability, because the governor will be watching (knowing that the citizens generally hold the governor accountable). In the longer term (as OCPA first recommended early in the Brad Henry administration), we must empower the governor even further by eliminating many of these boards and commissions altogether. Oversight of Federal Funding. As mentioned above, Oklahoma government spending is at an alltime high. The most significant driver of state spending

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growth is federal funds, or what tax consumers like to think of as “free” money. It is the federally induced welfare programs, such as Medicaid, that require ever-increasing state funding matches for the programs’ exploding costs. Again, according to Oklahoma’s latest Comprehensive Annual Financial Report (CAFR), total state spending on social services has grown from $1.59 billion in FY 2005 to $2.25 billion in FY 2011—an increase of 41.7 percent in six years. Total state spending on health services has grown from $3.13 billion in FY 2005 to $4.85 billion in FY 2011—an increase of 54.3 percent in six years. Based on this enormous growth, lawmakers must take a serious look at state programs operated with federal funds. In particular, oversight of state agencies’ application for federal funds, and operation of programs using federal funds, must begin immediately. The current budget review process is inadequate. There are simply too many programs being operated by state agencies, and too much money being spent. Just as lawmakers have established committees specifically for certain policy issues needing intense review (e.g., DHS), it is time to form an oversight committee designed specifically to review and make recommendations for all state programs utilizing federal funds. The current unchecked growth in state government

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spending is irresponsible. It is time for policymakers to take fiscal federalism seriously, and chart a new course towards economic freedom. Privatization of State Services. Many of the services currently provided by state agencies—the Tourism Department, the Department of Corrections, the Office of Juvenile Affairs, and the Department of Human Services come quickly to mind—can be performed at the same or better quality and at lower cost by the private sector. It is unjust to require taxpayers to support overpriced services—especially when many of these taxpayers are small-business owners being forced to subsidize their own competitors. In the 2012 session, lawmakers should establish a joint committee, comprising both public and nonpublic sector appointees, specifically tasked with evaluating current services provided by government that are also provided by the private sector. This committee should create a comprehensive list of services that can be privatized, and then lawmakers should be required to take formal action accepting or denying the list of services to be privatized prior to the end of the 2012 session. Savings FY 2013: $47 million Savings FY 2014: $52 million Savings FY 2015: $57.9 million

OCPA FY-2013 Budget Recommendation FY-12 Appropriation EDUCATION COMMITTEE Arts Council Career and Technology Education Board of Education Educational Television Authority Regents for Higher Education Land Commission Department of Libraries Physician Manpower Training Commission Board of Private Vocational Schools School of Science and Mathematics Center for Science and Technology Teacher Preparation Commission

$ Change

% Change

4,010,087 133,742,618 2,278,158,382 3,822,328 945,260,277 7,109,000 5,898,633 4,379,254 167,194 6,332,274 17,811,449 1,526,179

$ $ $ $ $ $ $ $ $ $ $ $

0 130,320,973 2,277,776,621 0 729,260,277 7,046,799 5,880,208 0 165,548 5,141,343 14,791,483 0

$ $ $ $ $ $ $ $ $ $ $ $

-4,010,087 -3,421,645 -381,761 -3,822,328 -216,000,000 -62,201 -18,425 -4,379,254 -1,646 -1,190,931 -3,019,966 -1,526,179

-100.00% -2.56% -0.02% -100.00% -22.85% -0.87% -0.31% -100.00% -0.98% -18.81% -16.96% -100.00%

GENERAL GOVERNMENT AND TRANSPORTATION COMMITTEE Auditor and Inspector $ 4,706,986 Bond Advisor $ 143,112 Department of Central Services $ 17,313,301 Election Board $ 7,805,808 Emergency Management $ 651,179 Ethics Commission $ 523,129 Office of State Finance $ 19,179,440 Governor $ 1,980,594 House of Representatives $ 14,574,682 Legislative Service Bureau $ 4,892,835 Lieutenant Governor $ 506,591 Merit Protection Commission $ 490,967 Military Department $ 10,247,997 Office of Personnel Management $ 3,639,606 Secretary of State $ 0 Senate $ 11,171,789 Space Industry Development Authority $ 394,589 Tax Commission $ 46,915,944 Department of Transportation $ 106,737,039 Treasurer $ 3,629,873

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

4,579,403 140,918 17,022,559 7,781,893 623,863 517,315 18,985,488 1,952,401 14,308,875 4,883,401 497,705 484,166 9,870,843 3,595,503 0 11,010,528 0 46,089,562 205,795,533 3,567,343

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

-127,583 -2,194 -290,742 -23,915 -27,316 -5,814 -193,952 -28,193 -265,807 -9,434 -8,886 -6,801 -377,154 -44,103 0 -161,261 -394,589 -826,382 99,058,494 -62,530

-2.71% -1.53% -1.68% -0.31% -4.19% -1.11% -1.01% -1.42% -1.82% -0.19% -1.75% -1.39% -3.68% -1.21% N/A -1.44% -100.00% -1.76% 92.81% -1.72%

PUBLIC HEALTH COMMITTEE Health Care Authority Health Department J.D. McCarty Center Mental Health and Substance Abuse University Hospitals Department of Veterans Affairs

$ $ $ $ $ $

983,085,563 60,083,682 3,740,338 187,151,517 38,446,391 34,698,752

$ $ $ $ $ $

895,601,670 57,795,857 3,480,565 185,187,311 38,437,615 32,276,652

$ $ $ $ $ $

-87,483,893 -2,287,825 -259,773 -1,964,206 -8,776 -2,422,100

-8.90% -3.81% -6.95% -1.05% -0.02% -6.98%

HUMAN SERVICES COMMITTEE Commission on Children and Youth Office of Disability Concerns Human Rights Commission Department of Human Services Indian Affairs Commission Office of Juvenile Affairs Department of Rehabilitation Services

$ $ $ $ $ $ $

2,027,167 317,607 531,270 537,136,664 192,306 96,187,205 30,149,232

$ $ $ $ $ $ $

2,018,017 310,806 517,886 503,419,142 190,112 90,339,372 29,050,681

$ $ $ $ $ $ $

-9,150 -6,801 -13,384 -33,717,522 -2,194 -5,847,833 -1,098,551

-0.45% -2.14% -2.52% -6.28% -1.14% -6.08% -3.64%

NATURAL RESOURCES COMMITTEE Department of Agriculture, Food and Forestry Department of Commerce Conservation Commission Consumer Credit Commission Corporation Commission

$ $ $ $ $

25,610,247 29,073,210 9,561,684 331,730 11,324,427

$ $ $ $ $

25,019,362 25,064,675 8,615,247 0 10,854,904

$ $ $ $ $

-590,885 -4,008,535 -946,437 -331,730 -469,523

-2.31% -13.79% -9.90% -100.00% -4.15%

$ $ $ $ $ $ $ $ $ $ $ $

FY-13 Appropriation

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FY-12 Appropriation

FY-13 Appropriation

$ Change

% Change

NATURAL RESOURCES COMMITTEE (CONT.) Department of Environmental Quality Historical Society Horse Racing Commission Insurance Department J.M. Davis Memorial Commission Department of Labor Department of Mines Scenic Rivers Commission Department of Tourism and Recreation Water Resources Board Will Rogers Memorial Commission

$ $ $ $ $ $ $ $ $ $ $

7,557,973 12,502,546 2,072,167 1,871,937 306,009 3,081,160 779,139 271,315 21,803,003 5,499,671 740,486

$ $ $ $ $ $ $ $ $ $ $

6,858,845 12,336,238 0 0 0 2,985,391 743,815 255,518 19,572,246 5,407,851 0

$ $ $ $ $ $ $ $ $ $ $

-699,128 -166,308 -2,072,167 -1,871,937 -306,009 -95,769 -35,324 -15,797 -2,230,757 -91,820 -740,486

-9.25% -1.33% -100.00% -100.00% -100.00% -3.11% -4.53% -5.82% -10.23% -1.67% -100.00%

PUBLIC SAFETY COMMITTEE ABLE Commission Department of Corrections Fire Marshal State Bureau of Investigation Law Enforcement Education and Training Board of Medicolegal Investigations Narcotics and Dangerous Drugs Department of Public Safety

$ $ $ $ $ $ $ $

3,140,334 459,831,068 1,796,764 13,848,059 3,682,560 4,698,281 3,616,418 84,894,790

$ $ $ $ $ $ $ $

3,095,137 421,249,454 1,768,680 13,488,019 3,635,717 4,618,418 3,489,055 70,326,271

$ $ $ $ $ $ $ $

-45,197 -38,581,614 -28,084 -360,040 -46,843 -79,863 -127,363 -14,568,519

-1.44% -8.39% -1.56% -2.60% -1.27% -1.70% -3.52% -17.16%

JUDICIARY COMMITTEE Attorney General Court of Criminal Appeals District Attorneys Council District Courts Indigent Defense System Council on Judicial Complaints Pardon and Parole Board Supreme Court Workerâ&#x20AC;&#x2122;s Compensation Court

$ $ $ $ $ $ $ $ $

13,228,141 3,334,631 32,887,258 56,100,000 14,699,353 75,000 2,217,454 17,300,000 4,197,166

$ $ $ $ $ $ $ $ $

13,064,028 3,304,024 31,655,968 55,413,817 14,575,390 72,806 2,177,084 17,106,157 4,118,620

$ $ $ $ $ $ $ $ $

-164,113 -30,607 -1,231,290 -686,183 -123,963 -2,194 -40,370 -193,843 -78,546

-1.24% -0.92% -3.74% -1.22% -0.84% -2.93% -1.82% -1.12% -1.87%

MISCELLANEOUS AGENCIES/APPROPRIATIONS Rural Economic Action Plan (REAP) OSU Medical Center

$ $

11,532,469 5,000,000

$ $

0 5,000,000

$ $

-11,532,469 0

-100.00% 0.00%

$ $

-3,000,000 -5,400,000

$ $

-3,000,000 -5,400,000

6,138,188,975

-367,748,305

Appropriation savings (FY-2012 appropriations less OCPA recommendations) FY-13 growth in appropriation authority over FY-12 appropriations Cash Flow Reserve Fund transer to Special Cash

$ $ $

367,748,305 73,814,873 116,000,000

Total surplus funds

557,563,178

Estimated FY-2013 revenue decline from income tax cut (excluding ROADS fund)

-243,000,000

Offsets for estimated FY-2013 revenue decline from income tax cut to ROADS fund (transfer to ROADS fund)

-32,000,000

Total income tax cut impact

-275,000,000

Surplus funds to carry forward for FY-2014

282,563,178

Government-wide reforms (not included in individual agency adjustments) Telecommunications efficiency audits Hiring reform Total Appropriations Including Misc. Approp

6,505,937,280*

N/A N/A -5.65%

*Agency appropriations were derived from OSF, House, and Senate fiscal documents. This total excludes non-recurring supplemental funding.

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Education Arts Council This budget recommends that the Arts Council operate solely from donations and self-generated funds, without receiving state appropriations. Promotion of the arts is a nonprofit interest, which should not be advantaged over other nonprofit efforts that do not receive state appropriations. State government has core functions which are neglected when limited resources are diverted to philanthropic interests such

as promotion of the arts. Removing state funding for the Arts Council would not be a unique reform attempted only by Oklahoma. Kansas eliminated such funding in 2011, providing a great example for all states of wisely using taxpayer funds. Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Arts Council FY-2012

4,010,087

Not a core function of government; eliminate appropriation

(4,010,087)

Total Savings

4,010,087

FY-2013

Career and Technology Education A major source of revenue for school districts and technology centers is the ad valorem tax, or property tax, which is allowed by Article 10 of the Oklahoma Constitution. The level of support technology centers receive from property-tax sources varies based upon what was approved for the technology centers through a vote of the people in the district. Support from property tax is capped at five mills for the general fund (a mill = 1/10th cent), five mills for the incentive fund for operations, and five mills for the building fund, although not all technology center districts have voted the full millage levy. The use of building funds is generally limited to “erecting, remodeling or repairing buildings and for purchasing furniture.” Partially because of this provision, and because of economic growth in several areas of the state, total CareerTech building fund carryforward balances have increased from $36.8 million in FY 2001 to $106.1 million in FY 2011. This enormous fund growth—161 percent adjusted for inflation—has

resulted in technology centers across the state being forced to make building purchases or improvements that they do not need, while other potentially worthwhile expenses are neglected. This is like a family being forced to use a savings account to buy a new home, when dad just lost his job and the family needs to buy groceries. CareerTech does not need increased state appropriations. What is needed is a constitutional amendment and statutory changes allowing technology centers to use the existing local-district voting process to reallocate the total millage for technology centers as their local citizens and their elected officials see fit. This allows for local control and removes the need for more state funding. Then CareerTech can adjust its state allocations to local technology centers, saving millions of dollars in state appropriations and allowing for wiser use of local property taxes. This budget recommends that CareerTech receive the same appropriation provided for FY 2012, less sav-

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ings from the implementation of the state employee health insurance reform, less appropriations to CareerTechs in large MSA’s that have sufficient local

revenue to support their operations, and less targeted funding.

Career and Technology Education FY-2012

133,742,618

Savings from state employee health insurance reform

(321,645)

to support operations without state funding (Metro, Francis Tuttle, Tulsa)

(3,000,000)

Eliminate targeted funding for Kiamichi Technology Center

(100,000)

Reduce state subsidy for technology centers with sufficent local revenues

Total Savings

3,421,645

FY-2013

130,320,973

Board of Education Over the long term, lawmakers in Oklahoma must address the ever-growing cost of common education, which has been accompanied by results that remain flat at unacceptably low levels. According to the state’s FY 2011 Comprehensive Annual Financial Report, total state spending on education has grown from $3.53 billion in FY 2005 to $4.57 billion in FY 2011—an increase of 29.4 percent in six years. According to Dr. Greg Foster, federal data indicate that “only half of Oklahoma’s public education employees are teachers. The bureaucracy is now so big, it takes up half the system.”

According to a new report from the research affiliate of The State Chamber, Oklahoma public schools spend $9,121 per pupil. This per-pupil expenditure significantly exceeds the cost associated for alternatives to public education. Cost-saving alternatives (such as vouchers and Education Savings Accounts, for example) need serious attention from lawmakers. This budget recommends that the Board of Education receive the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Board of Education FY-2012

Savings from state employee health insurance reform

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2,278,158,382 (381,761)

Total Savings

381,761

FY-2013

2,277,776,621

Oklahoma Educational Television Authority “Public broadcasting is a wonderful resource, providing quality programming that is cherished by many,” Virginia Gov. Bob McDonnell has correctly noted. Nevertheless, he recommended eliminating state funding for public broadcasting. “In our modern media world,” he said, “there are thousands upon thousands of content providers operating in the free market. They compete with each other, and viewers and listeners have their choice as to what to tune into or turn on. Simply put, it doesn’t make sense to have some stations with the competitive advantage of being funded by taxpayer dollars. The decision to eliminate state funding of public broadcasting is driven by the fundamental need to reestablish the proper role of government, and budget accordingly.” Similarly, in Florida last year Gov. Rick Scott vetoed the state’s $4.8 million appropriation for public

broadcasting. Broadcasting is not a core function of government. According to the Oklahoma Educational Television Authority (OETA), as of FY 2012, 17 states are not providing state funding for public broadcasting. Consistent with the principles of free enterprise and limited government, this budget removes all state appropriations from OETA and recommends that all OETA assets, including any bandwidth rights, be assigned to the nonprofit OETA Foundation, giving OETA a firm footing to continue operations without any taxpayer funding. Oklahomans who wish to support OETA may send a donation to the OETA Foundation, P.O. Box 14190, Oklahoma City, Oklahoma 73113. Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Educational Television Authority FY-2012

3,822,328

(3,822,328)

Not a core function of government; eliminate appropriation

Total Savings

3,822,328

FY-2013

Regents for Higher Education Jeff Sandefer, a successful entrepreneur and former University of Oklahoma professor, recently wrote: The truth is that over the next decade, many universities may bankrupt themselves by clinging to an educational approach that confuses lecturing with learning and protects highly paid, tenured faculties and administrators from a tsunami of technological change that soon will deliver transformational learning at a fraction of today’s costs. There’s a word for business models that have high and increasing fixed costs, and are faced by disruptive strategies that offer better results at a lower price. That word is “doomed.” ...

The real problems in higher education are more fundamental than tuition increases alone: 1. A public that increasingly questions the value of a college degree. … 2. High and rising fixed costs from tenured faculty, bloated administrative staffs, and expensive new buildings at a time when tenured-faculty teaching productivity is falling ... 3. A tsunami of technologically enabled educational change promises to deliver transformational learning at a fraction of today’s costs. These problems exist in Oklahoma. Since the Legislature granted the State Regents authority to ap-

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prove tuition and fee increases in 2003, undergraduate resident tuition and fees have increased by 100.59 percent during the last nine fiscal years, according to the State Regents. During the same time period, inflation has only increased by approximately 25 percent, while private earnings rose only about 45 percent. During that time, when comparing each year of Higher Ed appropriations to FY 2004, even after adjusting for inflation and including budget cuts, the Legislature has maintained total appropriations to higher education and in several years substantially exceeded that level. Tuition at the University of Oklahoma and Oklahoma State University during that time period is even more alarming: Oklahoma State University (including the Tulsa campus) – Undergraduate Resident Tuition and Mandatory Fee Increases: • FY 2003 – $100.83 main campus tuition and fees per credit hour • FY 2012 – $236.90 main campus tuition and fees per credit hour • 134.95% – main campus tuition and fee increases over last 9 years • 25% – inflation over last 9 years • $2,069.40 – increase per 15-hour semester University of Oklahoma – Undergraduate Resident Tuition and Mandatory Fee Increases: • FY 2003 – $97.62 main campus tuition and fees per credit hour • FY 2012 – $237.48 main campus tuition and fees per credit hour • 144.17% – main campus tuition and fee increases over last 9 years • 25% – inflation over last 9 years • $2,103.30 – increase per 15-hour semester Analyzing the State Regents data, tuition increases are not just based on enrollment growth. In the fall of 2003 the full-time equivalent enrollment was 96,856 and by 2009 had grown by 2,05,9 or 2.13 percent. Meanwhile, over the same period, average undergraduate resident tuition and mandatory fee increases grew 69.51 percent for research universities

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and 52.19 percent for regional universities. Inflation over this period of time was 17 percent and the private earnings of Oklahomans grew 35.03 percent over this same period. In 2010, Oklahoma ranked 13th in per capita higher education appropriations but ranked 37th in bachelor’s degree attainment. For Oklahoma public four-year institutions, only 19.97 percent of students graduate within 4 years, and 55 percent of Oklahoma’s students fail to graduate within even six years. In an investigative review last year of Oklahoma college and university budgets, Peter J. Rudy of Oklahoma Watchdog reported: Spending at state colleges and universities this year is 66% higher than it was just 10 years ago according to data obtained by Oklahoma Watchdog through Open Records requests. The Education and General (E&G) budgets of the 25 state colleges and universities grew from $1.29 billion in FY2003 to $2.13 billion in the current fiscal year. … [W]hile Oklahoma suffered two economic downturns during that period, spending never decreased at state colleges and universities. The last three years, Oklahoma has experienced a revenue failure and two budget shortfalls, yet Higher Ed spending increased by 2.5%, 2.8% and 3.9% in those years. The 3.9% increase this year comes despite state lawmakers decreasing state appropriations to Higher Ed by 5% in the budget. Colleges and universities have other sources of revenue, primarily tuition and fees, which allowed spending to rise. Every state college and university raised tuition and fees this year. According to the State Regents, total student (headcount) enrollment at public colleges and universities was 228,249 for 2002-03 (FY 2003). Allocating the FY 2003 budget to enrollment for 2002-03 equals an E&G budget of $6,028.83. The headcount for 2011-12 (assuming the average of growth the last 3 years) is 262,413. Allocating the FY 2012 budget to enrollment for 2011-12 equals an E&G budget of $8,116.97. Analyzing these data, public colleges and universities in Oklahoma have increased the E&G budget per

student by $2,088.14 or approximately $547.9 million in nine years. Low productivity among professors is also a problem in Oklahoma. For example, in a 2002 study conducted of a non-medical and non-engineering division of an Oklahoma research institution (see nearby table), it was found that multiple professors were paid salaries exceeding $100,000 a year, taught in some cases as little as one class per year, and taught few students compared to non-tenured professors and graduate assistants. Concerning the number of colleges and universities in Oklahoma (25) and the total number of “higher education” centers (52), it is time for the administrative and “back office” functions of the colleges and universities to be consolidated into the two research universities. These larger institutions have achieved economies of scale, and their far superior graduation rates are just one example of why it is time to end the political patronage approach to the number of colleges and universities in Oklahoma and their control. It is also time for the State Board of Regents and lawmakers, in coordination with the two research institutions, to consolidate many of the regional and community colleges to vertically achieve efficiency, cost savings, better degree quality, and better graduation rates. One need only to look at the salaries of the college and university presidents, and the corresponding graduation rates, to see these reforms are needed. It is time for Oklahoma to decrease its taxpayer investment in higher education. This budget recommends that the State Regents for Higher Education receive the same appropriation for FY 2012 less savings from the implementation of the reforms described below.

Teachers Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted Name redacted

Total Classes 2 2 3 3 3 1 2 2 3 1 4 3 3 2 1 3 1

Total # of Students 70 89 122 62 133 34 63 76 113 11 21 67 115 70 35 59 10

Salary 2002 $188,423.16 158,522.80 135,477.99 136,426.04 192,520.48 126,757.00 170,401.29 150,000.00 115,086.00 223,850.60 184,893.09 146,482.74 156,929.11 129,883.74 104,435.83 110,634.79 243,160.23

College Daze Four-Year Public University

Four-Year Salary of Graduation University Rate President

Rogers State University Cameron University Langston University Southeastern Oklahoma State University University of Science and Arts of Oklahoma Northeastern State University Southwestern Oklahoma State University Northwestern Oklahoma State University East Central University University of Central Oklahoma Oklahoma Panhandle State University Oklahoma State University University of Oklahoma

4% 6% 13% 11% 19% 11% 12% 15% 11% 12% 23% 31% 29%

$215,000 $261,100 $247,000 $172,000 $165,465 $215,360 $157,667 $160,000 $172,500 $266,492 $192,250 $371,786 $384,816

Sources: Graduation rates are the latest available from IPEDS, U.S. Department of Education. This is a percentage of entering students who began their studies fulltime in the fall of 2003 seeking a bachelor’s degree who earned a bachelor’s degree within four years. Salary date for FY-2010 (the latest year available) are from the Oklahoma Office of State Finance.

Regents for Higher Education FY-2012

945,260,277

(216,000,000)

Eliminate inflated appropriation levels due to SQ744 styled Peer Factor Multiplier; eliminate waste, duplication, and inefficiencies by combining all other college and university administrative and “back office” functions into research institutions; and implement college and university consolidation

Total Savings

216,000,000

FY-2013

729,260,277

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Land Commission This budget recommends that the Land Commission receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Land Commission FY-2012 Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $

7,109,000 (62,201) 62,201 7,046,799

Department of Libraries This budget recommends that the Department of Libraries receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Libraries FY-2012 Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $

5,898,633 (18,425) 18,425 5,880,208

Physician Manpower Training Commission This budget recommends that the Physician Manpower Training Commission (PMTC) operate completely from self-generated funds, local government funds, and donations, without receiving state appropriations. The Physician Manpower Training Commission, according to its website, exists â&#x20AC;&#x153;to enhance medical care in rural and underserved areas of the state by administering residency, internship and scholarship incentive programs that encourage medical and nursing personnel to practice in rural and underserved areas. Further, PMTC is to upgrade the availability of health care services by increasing the number of practicing physicians, nurses and physician

assistants in rural and underserved areas of Oklahoma.â&#x20AC;? These efforts are intensely local functions focused on local workforce training and recruitment. These efforts should be directly funded and supported by the local governments and users that benefit, not through the statewide subsidization of one specific industry. Further, significant tax relief for Oklahomans, with the associated economic growth and the increase in local revenues, provides a better opportunity for local communities to become self-sufficient and operate local workforce recruitment programs. Require more user responsibility

Physician Manpower Training Commission FY-2012 Function of local government and local workforce recruitment; eliminate appropriation Total Savings FY-2013

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4,379,254

$ $ $ $

(4,379,254) 4,379,254 -

Board of Private Vocational Schools The Board of Private Vocational Schools licenses, regulates, and sets standards for the operation of private schools that conduct occupational training. Schools licensed by the Oklahoma Board of Private Vocational Schools are the â&#x20AC;&#x153;silent serviceâ&#x20AC;? of education. They are generally privately owned, and are mostly small institutions with a student body counted in the tens or hundreds rather than in the thousands. Their physical plants are modest in size and appearance, and they have no lobbyists roaming the halls of the capitol seeking appropriations. Unlike privately owned entities licensed by other state boards (banks and funeral homes, for example),

licensed private career schools perform a service normally performed by the state. In providing educational services, private career schools save the state millions of dollars in educational costs, reduce welfare expenses, offer choice in education, and produce jobready graduates. The benefits inuring to Oklahoma through the private career schools regulated by the Oklahoma Board of Private Vocational Schools are enormous. This budget recommends the Board of Private Vocational Schools receive that the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Board of Private Vocational Schools FY-2012 Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $

167,194 (1,646) 1,646 165,548

School of Science and Mathematics This budget recommends that the Oklahoma School of Science and Mathematics (OSSM) promote individual responsibility by requiring that students who attend OSSM help defray some of the costs of their education. Through local property taxes, state sales taxes, state income taxes, motor vehicle taxes, and other taxes and fees, Oklahoma taxpayers heavily subsidize common education by way of the 1017 fund, the general revenue fund, and more than $2 billion annually in appropriations to the state Board of Education. OSSM is a predominantly taxpayer-subsidized advanced

college preparatory school, with a restricted number of students. This budget recommends that OSSM institute a tuition-sharing program for each student of $250 a month, for 9 months. Even with this arrangement, students will only pay approximately 20 percent of the cost of their attendance at OSSM. This budget recommends that OSSM receive the same appropriation provided for FY 2012, less the new revenue generated by the tuition sharing arrangement and savings from the implementation of the state employee health insurance reform. Require more user responsibility

School of Science and Mathematics FY-2012 Implement tuition sharing program Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $ $

6,332,274 (1,125,000) (65,931) 1,190,931 5,141,343

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Center for Science and Technology This budget recommends that the Oklahoma Center for Science and Technology (OCAST) no longer receive state funding for the Oklahoma Technology Commercialization Center (OTCC). This program directly competes with the private sector and existing market participants engaged in business formation and development. This program is another example of the state picking winners and losers. If the private

sector is interested in subsidizing a competitor through the continued existence of this program, then it will support this program through donations to OCAST specifically for this program. This budget recommends that OCAST receive the same appropriation provided for FY 2012, less funding for the OTCC and less savings from the implementation of the state employee health insurance reform.

Center for Science and Technology FY-2012

17,811,449

Savings from state employee health insurance reform

(19,966)

(3,000,000)

Eliminate state funding of the technology commercialization program, this business development program competes directly with the private sector

Total Savings

3,019,966

FY-2013

14,791,483

Teacher Preparation Commission This budget recommends that the Oklahoma Commission for Teacher Preparation (OCTP) no longer receive a state appropriation. According to its website, the OCTP’s mission is “to develop, implement, and facilitate competency-based teacher preparation, candidate assessment, and professional development systems.” Since its creation, taxpayers have provided appropriations of more than $29 million to the OCTP, including the $1,526,179 appropriated to the agency for FY 2012. Despite poor results, total state spending on education has grown from $3.53 billion in FY 2005 to $4.57 billion in FY 2011—an increase of 29.4 percent in six years. Excluding funds for OCTP, taxpayers already spend billions of dollars on other state agencies, such as the state Department of Education, CareerTech, state aid for common education, OETA, and more than a billion of taxpayer dollars for subsidized colleges and universities. These government entities should already “implement and facilitate competency-based teacher

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preparation, candidate assessment, and professional development systems”—particularly the institutions granting bachelor’s degrees and higher. Oklahoma taxpayers should not be required to pay for this twice. Teachers are professionals. Once they enter the workforce, they, like many other professionals, are now providing a service to their particular employer and their local community. Locally benefiting employers, communities, and teachers should bear the costs for any licensing, credentialing, and additional training or development—just as is the case with many other professions that do not receive taxpayer funds. The Teacher Preparation Commission is a duplicative function of government, as teachers are graduates of heavily taxpayer-subsidized public colleges and universities and private universities which receive taxpayer subsidized grants and federally subsidized student loans. Since most teachers are required to have bachelor or higher level degrees, their degree program has or should have already prepared them.

Any additional preparation needed is a specific benefit to local government and districts and should be

funded locally if a priority. Reshape the state-local government relationship

Teacher Preparation Commission

FY-2012

1,526,179

Duplicative function of government and function of local government

(1,526,179)

Total Savings

1,526,179

FY-2013

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General Government Auditor and Inspector This budget recommends that the Auditor and Inspector receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Auditor and Inspector FY-2012

Savings from state employee health insurance reform

4,706,986 (127,583)

Total Savings

127,583

FY-2013

4,579,403

Bond Advisor This budget recommends that the Bond Advisor receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Bond Advisor FY-2012

Savings from state employee health insurance reform

143,112 (2,194)

Total Savings

2,194

FY-2013

140,918

Department of Central Services - OSF This budget recommends that the Department of Central Services of the Office of State Finance (OSF) cease subsidizing the use of alternative fuels with state appropriations. If market forces have not resulted in alternative fuels equaling the cost of traditional fuels, then government should not be subsidizing those fuels.

This budget recommends that the Department of Central Services (DCS) receive the same appropriation provided for FY 2012, less the alternative fuels subsidization and savings from the implementation of the state employee health insurance reform. Redirect spending to higher-priority uses

Department of Central Services FY-2012

Savings from state employee health insurance reform

(241,234)

Eliminate alternative fuels funding through DCS

(49,508)

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17,313,301

Total Savings

290,742

FY-2013

17,022,559

Election Board This budget recommends that the Election Board receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Election Board FY-2012

Savings from state employee health insurance reform

7,805,808 (23,915)

Total Savings

23,915

FY-2013

7,781,893

Emergency Management This budget recommends that Emergency Management receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Emergency Management FY-2012

651,179

Savings from state employee health insurance reform

(27,316)

Total Savings

27,316

FY-2013

623,863

Ethics Commission This budget recommends that the Ethics Commission receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Ethics Commission FY-2012

Savings from state employee health insurance reform

523,129 (5,814)

Total Savings

5,814

FY-2013

517,315

Office of State Finance This budget recommends that the Office of State Finance receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Office of State Finance

FY-2012

Savings from state employee health insurance reform

19,179,440 (193,952)

Total Savings

193,952

FY-2013

18,985,488

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Governor This budget recommends that the Governor receive the same appropriation provided for FY 2012, less

savings from the implementation of the state employee health insurance reform.

Governor FY-2012

Savings from state employee health insurance reform

1,980,594 (28,193)

Total Savings

28,193

FY-2013

1,952,401

House of Representatives This budget recommends that the House of Representatives receive the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform. To better facilitate lawmakersâ&#x20AC;&#x2122; continuing education on policy development and their need to participate in lawmakerled organizations, this budget also recommends that the

House of Representatives, the Senate, and the Legislative Service Bureau allocate all funds given to membership organizations on a scholarship basis to each lawmaker. This will allow lawmakers to seek innovative policy solutions from organizations they deem most beneficial.

House of Representatives FY-2012

Savings from state employee health insurance reform

14,574,682 (265,807)

Total Savings

265,807

FY-2013

14,308,875

Legislative Service Bureau This budget recommends that the Legislative Service Bureau receive the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform. To better facilitate lawmakersâ&#x20AC;&#x2122; continuing education on policy development and their need to participate in lawmakerled organizations, this budget also recommends that the

Legislative Service Bureau FY-2012

Savings from state employee health insurance reform

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4,892,835 (9,434)

Total Savings

9,434

FY-2013

4,883,401

Lieutenant Governor This budget recommends that the Lieutenant Governor receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Lieutenant Governor FY-2012

Savings from state employee health insurance reform

506,591 (8,886)

Total Savings

8,886

FY-2013

497,705

Merit Protection Commission This budget recommends that the Merit Protection Commission receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Merit Protection Commission FY-2012

Savings from state employee health insurance reform

490,967 (6,801)

Total Savings

6,801

FY-2013

484,166

Military Department This budget recommends that the Military Department receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Military Department FY-2012

Savings from state employee health insurance reform

10,247,997 (377,154)

Total Savings

377,154

FY-2013

9,870,843

Office of Personnel Management - OSF This budget recommends that the Office of Personnel Management receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Office of Personnel Management

FY-2012

Savings from state employee health insurance reform

3,639,606 (44,103)

Total Savings

44,103

FY-2013

3,595,503

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Secretary of State This budget recommends that the Secretary of State continue to operate solely from fees associated

with its various regulatory duties and receive no appropriation, as provided for FY 2012.

Secretary of State FY-2012

Total Savings

FY-2013

Senate This budget recommends that the Senate receive the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform. To better facilitate lawmakersâ&#x20AC;&#x2122; continuing education on policy development and their need to participate in lawmaker-led organiza-

tions, this budget also recommends that the House of Representatives, the Senate, and the Legislative Service Bureau allocate all funds given to membership organizations on a scholarship basis to each lawmaker. This will allow lawmakers to seek innovative policy solutions from organizations they deem most beneficial.

Senate FY-2012

Savings from state employee health insurance reform

11,171,789 (161,261)

Total Savings

161,261

FY-2013

11,010,528

Space Industry Development Authority This budget recommends that the Space Industry Development Authority (SIDA) no longer receive a state appropriation. When created in 1999, SIDA was intended to operate entirely on self-generated revenues, according to the SIDA website. Despite this intent, lawmakers have given $7.8 million in taxpayer appropriations to the SIDA since its inception, including the $394,589 given to the agency for FY 2012. State-

subsidized space travel is not a core function of state government. Also, the infrastructure of the SIDA is now used for more than just attempts at space travel, and some reports indicate that if SIDA were freed from state control it could generate enough income to operate on its own. Require more user responsibility Redirect spending to higher-priority uses

Space Industry Development Authority FY-2012

394,589

Reduce appropriation, function of private industry and local government

(394,589)

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

Total Savings

394,589

FY-2013

Tax Commission This budget recommends that the Tax Commission receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Tax Commission FY-2012

Savings from state employee health insurance reform

46,915,944 (826,382)

Total Savings

826,382

FY-2013

46,089,562

Department of Transportation This budget recommends that the Department of Transportation receive the same appropriation provided for FY 2012, plus replacement of funds diverted

for bond issues, less savings from the implementation of the state employee health insurance reform.

Department of Transportation FY-2012

106,737,039

Restoration of diverted funds for bonds

101,695,609

Savings from state employee health insurance reform

(2,637,115)

Total Increase

99,058,494

FY-2013

205,795,533

Treasurer This budget recommends that the Treasurer receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Treasurer

FY-2012

Savings from state employee health insurance reform

3,629,873 (62,530)

Total Savings

62,530

FY-2013

3,567,343

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Public Health Health Care Authority According to the state’s FY 2011 Comprehensive Annual Financial Report, total state spending on health services has grown from $3.13 billion in FY 2005 to $4.85 billion in FY 2011—an increase of 54.3 percent in six years. According to the Oklahoma Health Care Authority’s FY 2010 annual report: • In FY 2005 there were nearly 630,000 Medicaid enrollees and total (state and federal) Medicaid expenditures of $2.81 billion. By FY 2010, the number of Medicaid enrollees had ballooned to 881,220 (about 24 percent of the state’s population) and expenditures had skyrocketed to $4.33 billion—an increase of 54 percent in just five years. • In Federal Fiscal Year 2000, total (state and federal) Medicaid spending in Oklahoma was $1.64 billion. But by Federal Fiscal Year 2010, total Medicaid spending in Oklahoma was $4.35 billion—a 165 percent increase in just 10 years. • For Federal Fiscal Year 2000, total state share/appropriations for Medicaid were $435.9 million. In Federal Fiscal Year 2010, total state share/appropriations for Medicaid were $1.1 billion—a 169 percent increase in just 10 years. • In 2010, approximately 562,000 children under the age of 21 were covered by Medicaid. • Approximately 67 percent of all Oklahoma children under the age of five have been covered by Medicaid at some point in their lives. • Of Oklahoma’s 77 counties, 38 counties have 25 percent or more of the population enrolled in Medicaid. Eighteen counties have 30 percent or more of the population enrolled in Medicaid. One county has 43 percent of its population on Medicaid. The problem is not that there is too little money for Medicaid; the problem is there are too many people on Medicaid—and those enrollees are driving program expenditures beyond sustainable limits. Oklahoma voters decided to install a center-right government last year because they are looking for

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real leadership and real solutions. The governor, executive branch leaders, state legislators, and Oklahoma’s congressional delegation should lead an unrelenting effort to obtain waivers from the federal government that would allow Oklahoma to implement significant reforms to the Medicaid program. Preferably, the state should seek federal approval to convert Medicaid into a block grant program, which would give the state more control over how program dollars are spent. Block grants hold the potential of restraining Medicaid growth because the state would know how much federal aid it will be receiving from year to year, as opposed to the current “as needed” funding scheme that incentivizes expansion by the promise of unlimited federal funds. A block grant program could be paired with a premium-support program, whereby the state provides low-income and disabled individuals a risk-adjusted credit or voucher to purchase coverage from among competing private plans. Under this model, an individual would own the plan and could opt to continue paying for the coverage out of pocket if he were to lose eligibility. Until a block grant and premium assistance program can be implemented, state leaders should take advantage of all currently available options to find efficiencies in the existing program, including: • Member Cost-Sharing: It is altogether reasonable to ask welfare recipients to contribute in a small way to the free medical care they receive at taxpayer expense. With more than 800,000 Oklahomans receiving Medicaid benefits each year, a low monthly premium of $10 each month would return more than $80 million to the program annually. Another option is to charge low premiums on a sliding scale, where members with higher incomes would be charged a slightly higher premium than low-income members. This concept is not novel; indeed, it is the basis for the current Insure Oklahoma program. Both of those options would require a federal

• • •

•

waiver; however, the Deficit Reduction Act of 2005 (DRA) does give states flexibility to make reforms to their Medicaid programs, including allowing states to charge premiums and require cost-sharing (copays and deductibles) to certain enrollees. This can include weighting cost-sharing based on those engaged in unhealthy behaviors such as smoking or obesity, to incentivize better health for Medicaid participants. Legislators should ensure the state is requiring member cost-sharing to maximum allowable limits. Long-Term-Care Reform Examining and Reducing “Optional” Benefits Insure Oklahoma: Legislators should allow the approximately 13,000 current individual Insure Oklahoma members to obtain coverage through the private market rather than being forced onto Medicaid. Employer-Sponsored Insurance for Part-Time Workers: Legislators should incentivize employersponsored insurance for employees (and their dependents) who work at least 24 hours each week, which current state law defines as “full time”

employment, instead of inducements to enter the state Medicaid program. • Medicaid Reform Task Force: Legislators should create a task force to begin studying Medicaid and options for reducing costs. While it would be prudent for members to explore the possibility of opting out of Medicaid completely and allow the state to focus revenues on providing health coverage exclusively to the truly needy, most policymakers admittedly would view this option as impractical because it involves the loss of significant federal matching funds. Nevertheless, the above proposals should be part of any task force that convenes to explore real reform efforts. This budget recommends that the Health Care Authority receive the same appropriation provided for FY 2012, less savings from implementation of a membercost sharing plan, less savings from the implementation of the state employee health insurance reform. Reform entitlement programs Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Health Care Authority FY-2012

983,085,563

Member cost-sharing

(87,000,000)

Savings from state employee health insurance reform

(483,893)

Total Savings

87,483,893

FY-2013

895,601,670

Health Department This budget recommends that the Health Department receive the same appropriation provided for FY

2012, less savings from the implementation of the state employee health insurance reform.

Health Department

FY-2012

60,083,682

Savings from state employee health insurance reform

(2,287,825)

Total Savings

2,287,825

FY-2013

57,795,857

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J.D. McCarty Center This budget recommends that the J.D. McCarty Center receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

J.D. McCarty Center FY-2012

Savings from state employee health insurance reform

3,740,338 (259,773)

Total Savings

259,773

FY-2013

3,480,565

Mental Health and Substance Abuse This budget recommends that the Department of Mental Health and Substance Abuse receive the same appropriation provided for FY 2012, less savings

from the implementation of the state employee health insurance reform.

Mental Health and Substance Abuse FY-2012

Savings from state employee health insurance reform

187,151,517 (1,964,206)

Total Savings

1,964,206

FY-2013

185,187,311

University Hospitals This budget recommends that the University Hospitals receive the same appropriation provided for FY

2012, less savings from the implementation of the state employee health insurance reform.

University Hospitals FY-2012

Savings from state employee health insurance reform

38,446,391 (8,776)

Total Savings

8,776

FY-2013

38,437,615

Department of Veterans Affairs This budget recommends that the Department of Veterans Affairs receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Veterans Affairs FY-2012

34,698,752

Savings from state employee health insurance reform

(2,422,100)

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Total Savings

2,422,100

FY-2013

32,276,652

Human Services Commission on Children and Youth This budget recommends that the Commission on Children and Youth receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Commission on Children and Youth FY-2012

Savings from state employee health insurance reform

2,027,167 (9,150)

Total Savings

9,150

FY-2013

2,018,017

Office of Disability Concerns This budget recommends that the Office of Disability Concerns receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Office of Disability Concerns FY-2012

Savings from state employee health insurance reform

317,607 (6,801)

Total Savings

6,801

FY-2013

310,806

Human Rights Commission This budget recommends that the Human Rights Commission receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Human Rights Commission FY-2012

531,270

Savings from state employee health insurance reform

(13,384)

Total Savings

13,384

FY-2013

517,886

Department of Human Services According to the state’s FY 2011 Comprehensive Annual Financial Report, total state spending on social services has grown from $1.59 billion in FY 2005 to $2.25 billion in FY 2011—an increase of 41.7 percent in six years. The growth in welfare spending at both the state and federal level is no surprise: you get more of what you incentivize, and less of what you don’t. When

the state pays nursing home or in-home service bills for the parents of the middle class, subsidizes the daycare expenses of affluent families, and perpetuates social pathologies such as out-of-wedlock births, social-services costs will inevitably rise. Rather than perpetuating policies which amount to a “handout” rather than a “hand up,” several fiscal re-

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forms in the Department of Human Services must be implemented (apart from the broader DHS reforms that have been making headlines of late). For example, if Oklahomans are going to apply for government services for themselves or on behalf of others, it is only reasonable that applicants meet basic requirements that are appropriate for applying for a job, such as passing a drug test for certain services. Also, as a way of encouraging more user participation in state services, DHS should implement the increased copayments for child care subsidies which were proposed in 2011. In addition, DHSâ&#x20AC;&#x201D;like the Department of Corrections, the Tourism Department, the Office of Juvenile Affairs, and many other state-operated servicesâ&#x20AC;&#x201D;can utilize the private sector to reduce the cost of

providing state services. If DHS would fully utilize private-sector options for community-based care, the state could save approximately $8 million a year (based on FY 2010 data). This budget recommends that the Department of Human Services receive the same appropriation provided for FY-2012, less the preceding policy reforms, less state funds for the construction division, less unaccounted savings found by the DHS in 2011, less savings from the implementation of the state employee health insurance reform. Reform entitlement programs Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Department of Human Services FY-2012

537,136,664

Privatize community service facilities

(8,000,000)

Require drug testing for benefit qualification

(2,000,000)

Savings from state employee health insurance reform

(8,217,522)

Closure of Construction Division

(5,000,000)

(7,000,000)

(3,500,000)

Encourage personal responsibility by increasing co-payments for child care subsidy as recommended by DHS staff in mid 2011 Efficiencies resulting in surplus of accounted funds found by DHS in October 2011

Total Savings

33,717,522

FY-2013

503,419,142

Indian Affairs Commission This budget recommends that the Indian Affairs Commission receive the same appropriation provided for FY 2012, less savings from the implementation of

the state employee health insurance reform and continue being funded and operated through the Office of the Governor.

Indian Affairs Commission FY-2012

Savings from state employee health insurance reform

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192,306 (2,194)

Total Savings

2,194

FY-2013

190,112

Office of Juvenile Affairs The Office of Juvenile Affairs (OJA) provides housing and incarceration services for youthful offenders, which the private sector has demonstrated it can provide at a lower cost to the state. Historically, political and bureaucratic hurdles have prevented the increased use of the private sector in this area. During the 2012 session, lawmakers should increase the number of offenders

placed under the jurisdiction of the OJA who are placed in private facilities, in order to achieve annual savings of at least $5 million. This budget recommends that the OJA receive the same appropriation provided for FY 2012, less savings for increasing the use of private beds, less savings from the implementation of the state employee health insurance reform.

Office of Juvenile Affairs FY-2012

96,187,205

Savings from state employee health insurance reform

(847,833)

Increase usage of private beds

(5,000,000)

Total Savings

5,847,833

FY-2013

90,339,372

Department of Rehabilitation Services This budget recommends that the Department of Rehabilitation Services receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Rehabilitation Services

FY-2012

30,149,232

Savings from state employee health insurance reform

(1,098,551)

Total Savings

1,098,551

FY-2013

29,050,681

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Natural Resources Department of Agriculture, Food and Forestry This budget recommends that the Department of Agriculture, Food and Forestry receive the same appropriation provided for FY 2012, less local earmarks

and less savings from the implementation of the state employee health insurance reform.

Department of Agriculture, Food and Forestry FY-2012

25,610,247

Savings from state employee health insurance reform

(475,885)

Tulsa State Fair - remove funds for intensely local function

(65,000)

intensely local function

(25,000)

IPRA National Finals Rodeo - remove funds for intensely local function

(25,000)

Total Savings

590,885

FY-2013

25,019,362

National Finals Steer Roping Champioship â&#x20AC;&#x201C; remove funds for

Department of Commerce This budget recommends that the Department of Commerce receive the same appropriation provided for FY 2012, less a duplicative welfare program, less local earmarks, less funding for the Naive American

Cultural and Educational Authority (NACEA) (which was intended to operate on private funds), and less savings from the implementation of the state employee health insurance reform.

Department of Commerce FY-2012

29,073,210

Savings from state employee health insurance reform

(158,299)

provided through the Department of Human Services

(2,500,000)

IPRA National Finals Rodeo - remove funds for intensely local function

(25,000)

(1,325,236)

Duplicative nutrition program, food stamp welfare services already

Make NACEA non-appropriated, require private operational support as originally intended

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Total Savings

4,008,535

FY-2013

25,064,675

Conservation Commission This budget recommends that the Conservation Commission receive the same appropriation provided for FY 2012, less the amount spent on the 10 duplicative conservation district offices that exceed the more than

adequate 77 counties and the 77 associated conservation districts, and less savings from the implementation of the state employee health insurance reform.

Conservation Commission FY-2012 Reduce funding for duplicative conservation district offices â&#x20AC;&#x201C; 10 districts w/out NRCS Office Savings from state employee health insurance reform Total Savings FY-2013

9,561,684

$ $ $ $ $

(868,000) (78,437) 946,437 8,615,247

Consumer Credit Commission This budget recommends that the Consumer Credit Commission (CCC) no longer receive a state appropriation. According to its website, â&#x20AC;&#x153;the Consumer Credit Commission is responsible for the regulation of consumer credit sales and consumer loans in the State of Oklahoma. The Department is also responsible for the licensing and regulation of mortgage brokers, mortgage loan originators, pawnshops, deferred deposit lenders, rental purchase lessors,

health spa contracts, credit service organizations and precious metal and gem dealers.â&#x20AC;? These products are used by some and not used by others, but are not a core function of government, which should be supported by general taxes on all Oklahomans. The CCC can be operated entirely from fee revenue of those producing, selling, or utilizing these products. Require more user responsibility

Consumer Credit Commission FY-2012

331,730

Function of government to be funded by users

(331,730)

Total Savings

331,730

FY-2013

Corporation Commission This budget recommends that the Corporation Commission receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Corporation Commission

FY-2012

Savings from state employee health insurance reform

11,324,427 (469,523)

Total Savings

469,523

FY-2013

10,854,904

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Department of Environmental Quality This budget recommends that the Department of Environmental Quality receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Environmental Quality FY-2012 Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $

7,557,973 (699,128) 699,128 6,858,845

Historical Society This budget recommends that the Historical Society receive the same appropriation provided for FY 2012, less savings from the implementation of the state employee health insurance reform. In keeping with the “9 R’s of fiscal responsibility” mentioned in the budget

message, this budget recommends that the Historical Society implement a plan to generate more funding from users and private donations, so that beginning in FY 2014 state appropriations to the Historical Society can be reduced by 10 percent.

Historical Society FY-2012 Savings from state employee health insurance reform Total Savings FY-2013

$ $ $ $ $

12,502,546 (166,308) 166,308 12,336,238

Horse Racing Commission This budget recommends that the Horse Racing Commission no longer receive a state appropriation. According to its website, “the Horse Racing Commission encourages agriculture, the breeding of horses, the growth, sustenance and development of live racing, and generates public revenue through the forceful control, regulation, implementation and enforcement of Commission-licensed horse racing and gaming.” Horse racing is an entertainment-related or specific industry endeavor (as are the Lottery Commission,

Wheat Commission, Peanut Commission, Liquefied Petroleum Gas Research, Marketing and Safety Board, Construction Industries Board, and many others that are non-appropriated and entirely user-supported). Horse racing is not a core function of government, and should not be supported by general taxes on all Oklahomans. The Horse Racing Commission should be operated entirely from fee revenue from participants. Require more user responsibility

Horse Racing Commission FY-2012 Non-core function, fund by users Total Savings FY-2013

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$ $ $ $ $

2,072,167 (2,072,167) 2,072,167 -

Insurance Department This budget recommends that the Insurance Department no longer receive a state appropriation. According to its website, “the Insurance Department is responsible for enforcing the insurance-related laws of the state. We protect consumers by providing accurate, timely and informative insurance information. We promote a competitive marketplace and ensure solvency of the entities we regulate. We also license and educate insurance producers and adjusters, funeral home directors, bail bondsmen and real estate appraisers.” These products are used by many and

not used by others, but are not a core function of government and should not be supported by general taxes on all Oklahomans. The Insurance Department can be operated completely from fee revenue of those producing, selling, or utilizing these products. The proof of this is the Legislature’s constant raiding of the Insurance Department’s revolving funds (for $8 million in the last two fiscal years alone). Clearly there are adequate fees available to operate the Insurance Department without legislative appropriations. Require more user responsibility

Insurance Department FY-2012

1,871,937

Function of government to be funded by users

(1,871,937)

Total Savings

1,871,937

FY-2013

J.M. Davis Memorial Commission This budget recommends that the J.M. Davis Memorial Commission no longer receive a state appropriation. According to its website, the J.M. Davis Memorial Commission/Museum has, among other things, the largest private gun collection in the world. Clearly it is

an important local entity, visited by some and not visited by others. But it is not a core function of government, and should not be supported by general taxes on all Oklahomans. Require more user responsibility

J.M. Davis Memorial Commission

FY-2012

306,009

Local attraction, non-core function, should be completely user supported

(306,009)

Total Savings

306,009

FY-2013

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

Department of Labor This budget recommends that the Department of Labor receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Labor FY-2012

Savings from state employee health insurance reform

3,081,160 (95,769)

Total Savings

95,769

FY-2013

2,985,391

Department of Mines This budget recommends that the Department of Mines receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Department of Mines FY-2012

779,139

Savings from state employee health insurance reform

(35,324)

Total Savings

35,324

FY-2013

743,815

Scenic Rivers Commission This budget recommends that the Scenic Rivers Commission receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Scenic Rivers Commission FY-2012

271,315

Savings from state employee health insurance reform

(15,797)

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Total Savings

15,797

FY-2013

255,518

Department of Tourism and Recreation The Oklahoma Tourism and Recreation Department (OTRD) is an example of an agency working hard to use taxpayer dollars wisely. Whether it has been the wise release of state parks with intensely local functions, or leveraging OTRD products such as Oklahoma Today magazine to minimize use of taxpayer funds, the OTRD has been a recent leader for other state agencies. Further reform is needed. Policymakers should eliminate any state subsidies or appropriations for golf courses. According to the Governorsâ&#x20AC;&#x2122; budget books and reports from the OTRD, from FY 2001 to FY 2011 lawmakers have appropriated $7.95 million for losses on state golf courses. For FY 2011, appropriations for losses were more than $300,000. Operating golf courses is not a core function of government. If it is a worthwhile park amenity, user fees will support the costs to operate these courses. Earmarks for intensely local festivals or exhibits, and promotion of the arts, are not a core function of government and should be removed. Also, intensely

local funding for advertising and other operational efforts for multi-county organizations and some local chambers is not a core function of government. In future years, the OTRD needs to work to duplicate the success of the US Forestry Service and use the private sector (leasing operation of state parks) to operate parks or resorts at no loss to the state, or fit state parks so that users can adequately support parks and resorts through fees. Those utilizing parks should pay sufficient user fees to support their usage. Park and resort self-sufficiency should begin to allow for further reductions in taxpayer support beginning in FY 2014. This budget recommends that the Department of Tourism and Recreation receive the same appropriation provided for FY 2012, less funds for losses on golf courses, less earmarks for intensely local activities, and less savings from the implementation of the state employee health insurance reform. Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Department of Tourism and Recreation

FY-2012

21,803,003

Eliminate state subsidies for losses on state golf courses

(400,000)

Eliminate non-core intensely local funding for multi-county organizations

(921,506)

Eliminate non-core intensely local funding for Red Earth Festival

(25,000)

Eliminate non-core intensely local funding for Summer Arts Institute

(25,000)

Eliminate non-core intensely local funding for Jenks Aquarium Exhibits

(40,000)

Savings from state employee health insurance reform

(819,251)

Total Savings

2,230,757

FY-2013

19,572,246

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Water Resources Board This budget recommends that the Water Resources Board receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Water Resources Board FY-2012

Savings from state employee health insurance reform

5,499,671 (91,820)

Total Savings

91,820

FY-2013

5,407,851

Will Rogers Memorial Commission This budget recommends that the Will Rogers Memorial Commission no longer receive a state appropriation. According to its website, the Will Rogers Memorial Museums exists â&#x20AC;&#x153;to collect, preserve, and share the life, wisdom, and humor of Will Rogers for all generations. â&#x20AC;Ś The Will Rogers Memorial Museums are the premier destinations to introduce, showcase, and celebrate the life, legacy, and spirit of Will

Rogers.â&#x20AC;? Clearly the Will Rogers Memorial Commission is an important local entity, visited by some and not visited by others. But it is not a core function of government, and should not be supported by general taxes on all Oklahomans. Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Will Rogers Memorial Commission FY-2012

740,486

Local attraction, non-core function, should be completely user supported

(740,486)

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Total Savings

740,486

FY-2013

Public Safety ABLE Commission This budget recommends that the Alcoholic Beverage Laws Enforcement (ABLE) Commission receive the same appropriation provided for FY 2012, less sav-

ings from the implementation of the state employee health insurance reform.

ABLE Commission FY-2012

Savings from state employee health insurance reform

3,140,334 (45,197)

Total Savings

45,197

FY-2013

3,095,137

Department of Corrections Lawmakers trying to be “right on crime” are making the right moves regarding corrections reform. Efforts should continue to reduce incarceration rates and strengthen families. These and other efforts to significantly reduce the incarceration of non-violent offenders are what’s best for society and also save millions in taxpayer dollars. The Department of Corrections (DOC)—like the Tourism Department, Office of Juvenile Affairs, and many other state-operated services—can utilize the private sector to reduce the cost of providing state

services. If the DOC would fully utilize the available private prison beds (“halfway” houses) as authorized by law, the state could save approximately $34 million a year (based on state costs per bed in 2009). This budget recommends that the Department of Corrections receive the same appropriation provided for FY 2012, less savings from full utilization of “halfway” houses and private prison beds, less savings from the implementation of the state employee health insurance reform.

Department of Corrections FY-2012

459,831,068

Savings from state employee health insurance reform

(4,581,614)

(34,000,000)

Implement full usage of half-way houses and private prison beds as allowed by law

Total Savings

38,581,614

FY-2013

421,249,454

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

Fire Marshal This budget recommends that the Fire Marshal receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Fire Marshal FY-2012

Savings from state employee health insurance reform

1,796,764 (28,084)

Total Savings

28,084

FY-2013

1,768,680

State Bureau of Investigation This budget recommends that the State Bureau of Investigation receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

State Bureau of Investigation FY-2012

Savings from state employee health insurance reform

13,848,059 (360,040)

Total Savings

360,040

FY-2013

13,488,019

Law Enforcement Education and Training This budget recommends that Law Enforcement Education and Training receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Law Enforcement Education and Training FY-2012

Savings from state employee health insurance reform

3,682,560 (46,843)

Total Savings

46,843

FY-2013

3,635,717

Board of Medicolegal Investigations This budget recommends that the Board of Medicolegal Investigations receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Board of Medicolegal Investigations FY-2012

Savings from state employee health insurance reform

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

4,698,281 (79,863)

Total Savings

79,863

FY-2013

4,618,418

Narcotics and Dangerous Drugs This budget recommends that the Bureau of Narcotics and Dangerous Drugs receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Narcotics and Dangerous Drugs FY-2012

Savings from state employee health insurance reform

3,616,418 (127,363)

Total Savings

127,363

FY-2013

3,489,055

Department of Public Safety The Oklahoma Department of Public Safety (DPS) issues thousands of driversâ&#x20AC;&#x2122; licenses per year, but users (those receiving the licenses) are not adequately sharing the burden associated with issuing these licenses. According to information available publicly, taxpayers subsidize DPSâ&#x20AC;&#x2122;s operation of driversâ&#x20AC;&#x2122; licensing by more than $12 million annually. Driver licensing is a direct regulatory service which should be paid for by those being licensed. Reforms that lead to

more efficient and effective licensing, along with requiring users to bear the full cost of the licensing, will allow for the reduction in state subsidies. This budget recommends that the DPS receive the same appropriation provided for FY 2012, less subsidies for driver licensing, less savings from the implementation of the state employee health insurance reform. Require more user responsibility Redirect spending to higher-priority uses

Department of Public Safety

FY-2012

84,894,790

Require Licensed Driver, Users to fully support driver regulation

(12,968,193)

Savings from state employee health insurance reform

(1,600,326)

Total Savings

14,568,519

FY-2013

70,326,271

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Judiciary Attorney General This budget recommends that the Attorney General receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Attorney General FY-2012

Savings from state employee health insurance reform

13,228,141 (164,113)

Total Savings

164,113

FY-2013

13,064,028

Court of Criminal Appeals This budget recommends that the Court of Criminal Appeals receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Court of Criminal Appeals FY-2012

Savings from state employee health insurance reform

3,334,631 (30,607)

Total Savings

30,607

FY-2013

3,304,024

District Attorneys Council This budget recommends that the District Attorneys Council receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

District Attorneys Council FY-2012

32,887,258

Savings from state employee health insurance reform

(1,231,290)

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

Total Savings

1,231,290

FY-2013

31,655,968

District Courts This budget recommends that the District Courts receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

District Courts FY-2012

Savings from state employee health insurance reform

56,100,000 (686,183)

Total Savings

686,183

FY-2013

55,413,817

Indigent Defense System This budget recommends that the Indigent Defense System receive the same appropriation provided for

FY 2012, less savings from the implementation of the state employee health insurance reform.

Indigent Defense System FY-2012

Savings from state employee health insurance reform

14,699,353 (123,963)

Total Savings

123,963

FY-2013

14,575,390

Council on Judicial Complaints This budget recommends that the Council on Judicial Complaints receive the same appropriation

provided for FY 2012, less savings from the implementation of the state employee health insurance reform.

Council on Judicial Complaints FY-2012

75,000

Savings from state employee health insurance reform

(2,194)

Total Savings

2,194

FY-2013

72,806

Pardon and Parole Board This budget recommends that the Pardon and Parole Board receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Pardon and Parole Board

FY-2012

Savings from state employee health insurance reform

2,217,454 (40,370)

Total Savings

40,370

FY-2013

2,177,084

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Supreme Court This budget recommends that the Supreme Court receive the same appropriation provided for FY 2012,

less savings from the implementation of the state employee health insurance reform.

Supreme Court FY-2012

Savings from state employee health insurance reform

17,300,000 (193,843)

Total Savings

193,843

FY-2013

17,106,157

Workersâ&#x20AC;&#x2122; Compensation Court This budget recommends that the Workersâ&#x20AC;&#x2122; Compensation Court receive the same appropriation provided

for FY 2012, less savings from the implementation of the state employee health insurance reform.

Workerâ&#x20AC;&#x2122;s Compensation Court FY-2012

Savings from state employee health insurance reform

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

4,197,166 (78,546)

Total Savings

78,546

FY-2013

4,118,620

Rural Economic Action Plan (REAP) According to the website of the Kiamichi Economic Development District of Oklahoma (KEDDO), “In 1996, the Oklahoma Legislature created the Rural Economic Action Plan (REAP). This Plan has made funds available for each of the rural Economic Development Districts to fund projects in communities with population of less than 7,000 and giving priority to fewer than 1,500 residents. Oversight of the application process is given to each of the Economic Development Districts ...” While most projects are small, some projects utilizing REAP funds are beneficial (road repairs) while others more resemble political patronage, earmarks, and “pork” (cars, renovations for community centers and storage buildings, etc.). Legislation in 2010 has helped steer REAP funds to more worthwhile projects, but the program still falls short in providing communities what they really need to thrive: job creators. The failure of government programs to generate sustained “economic development” is nothing new. Oklahoma needs a bold, transformational plan that allows citizens and job creators to retain more of their own money to invest and spend, so local communities can attract job creators and not be reduced to reli-

ance on unsuccessful state programs that breed more dependency. This is one of the main reasons Oklahoma must empower local communities by phasing out its personal income tax. As noted in the OCPA/ Laffer study “Eliminating the State Income Tax in Oklahoma: An Economic Assessment,” stronger economic growth would mean increased revenues for local governments across Oklahoma. And because there is no static tax reduction, every dollar of increased revenue created by Oklahoma’s stronger economy would increase the expenditure power of the economic growth estimated in the study. “Assuming local government revenues’ share of personal income remains constant, in aggregate, revenues for local governments would increase by $100 million in 2013, rising to an increase of $3.5 billion by 2022 local governments.” Therefore, based on the economic gain to local communities by lower state tax burdens, and the less-than-desired results of most state “economic development” programs, this budget recommends that the legislature no longer fund the REAP program. Revive free enterprise Reshape the state-local government relationship Redirect spending to higher-priority uses

Rural Economic Action Plan (REAP) FY-2012

11,532,469

Discontinue REAP program

(11,532,469)

Total Savings

11,532,469

FY-2013

FY-2012

5,000,000

Total Savings

FY-2013

5,000,000

OSU Medical Center This budget recommends that the OSU Medical Center receive the same appropriation provided for FY 2012. OSU Medical Center

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Oklahoma Council of Public Affairs 1401 N. Lincoln Blvd. Oklahoma City, OK 73104 Tel: 405.602.1667 Fax: 405.602.1238 ocpathink.org