FY-2014 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, 2014

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-2014 OCPA Budget ................................................................................................................ 8

FY-2014 OCPA Budget Recommendations Education ............................................................................................................................................ 10 General Government ......................................................................................................................... 21 Public Health ....................................................................................................................................... 27 Human Services ................................................................................................................................. 32 Natural Resources .............................................................................................................................. 34 Public Safety ....................................................................................................................................... 44 Judiciary .............................................................................................................................................. 47

Budget Message

he Oklahoma Council of Public Affairs (OCPA)’s proposed state budget this year focuses on funding core functions of government. This budget provides what many Oklahomans want and need: lower taxes and a more efficient, effective government which dedicates citizens’ hard-earned dollars to the core functions of government. In short, it’s a state budget that respects your family budget. Our friends on the left like to say Oklahoma is a “low-tax state.” To which one must reply: By what standard? The late University of Oklahoma historian J. Rufus Fears 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. In 2012, “Tax Freedom Day” arrived on April 8—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, this OCPA budget provides for an across-the-board cut of the top personal income tax, lowering the top personal income tax rate from 5.25 percent to 4.75 percent. This will provide muchneeded tax relief to the vast majority of Oklahoma taxpayers without any arbitrary increases in taxes or taxable income for any Oklahoman. According to Oklahoma’s Office of Management and Enterprise Services, even in a year when personal income taxes were cut, state tax revenues grew by $883 million and fees grew by $194 million over the prior year for fiscal year (FY)-2012. The 0.25 percent reduction in the personal income tax effective in 2012 was estimated to reduce state personal income tax revenues by approximately $61 million for FY-2012. So after much doom and gloom were predicted, the forecast terror never materialized. According to annual net collection data from the Oklahoma Tax

Total State Expenditures (expressed in billions of $) $18.00 $16.00

14.13

$14.00

16.07

16.61

16.64

16.70

FY-2011

FY-2012

D R R

R R R

12.92

$12.00 $10.00

15.02

9.65

10.19

10.67

11.08

11.73

$8.00 $6.00 $4.00 $2.00 FY-2001 FY-2002 Party in Governor Control when Senate Spending House Approved

R D D

FY-2003 FY-2004 FY-2005 R D D

D D D

FY-2006 FY-2007 D D R

D D R

FY-2008 FY-2009 FY-2010 D Tie R

D Tie R

D R R

Source: Spending data are from the Oklahoma Office of Management and Enterprise Services, FY-2010, FY-2011, and FY-2012 Comprehensive Annual Financial Reports, 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 4

Commission, state personal income tax collections were $2,396,668,662 for FY-2011 and $2,692,968,300 for FY-2012. This represents an increase of more than $296 million. State sales tax collections were $1,997,659,460 for FY-2011 and $2,190,600,218 for FY2012. This represents an increase of more than $192 million. In a year with the lowest top state personal income tax rate (5.25 percent) since cuts began in FY2005, the state set the record for net state sales tax collections and even managed to make a record deposit to the “Rainy Day Fund” in a year where state personal income taxes had been cut. With this growth in state revenue and with the increase in federal payroll taxes, it is imperative that personal income taxes are reduced in order to 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.” Most cuts recently experienced by state agencies, particularly any cuts to core services, are a direct result 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 FY-2004 to FY-2010 (wherein state appropriations increased more than $2.1 billion—or 41 percent). Oklahoma’s professional left, along with various tax users in Oklahoma, repeatedly dream of FY-2008 and FY-2009, when state tax revenues were at all-time highs, in part driven by a false economy based on a government-inflated housing market and ballooning federal spending. Those that dream of “pre-downturn” years fail to acknowledge that in the boom years appropriations to higher education and other entities were driven by Senate political leaders’ demands that for every dollar in tax cuts they wanted a dollar increase in spending. Budgets determined by this sort of hostage-holding of taxpayers are hardly a standard for future budget and revenue determinations. This OCPA budget removes non-core government spending, focusing it on core services and setting it at a level more appropriate for a state with Oklahoma’s

level of capital, job creation, and population. This budget demonstrates that personal income taxes can be cut without arbitrary increases in taxable income (born of a desire to be “revenue neutral”) and also demonstrates that considered core functions can be funded by government. It’s clear that there is more than enough money for the state budget. Now is the time to show some concern for Oklahomans’ 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 $16.7 billion worth of annual government and $11.5 billion in government retirement liabilities? “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 3.81 million people and a Gross

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Domestic Product of $154 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 Responsibility” (reprinted below, adapted for Oklahoma). 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 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 and bad economic times. According to the state’s FY 2012 Comprehensive Annual Financial Report, total state spending on social ser-

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vices has grown from $1.59 billion in FY- 2005 to $2.09 billion in FY-2012—an increase of 31.4 percent in seven years. Over the next few years the state is going to make significant appropriation increases to the Department of Human Services. And yet total state spending on health services has already grown from $3.14 billion in FY-2005 to $5.44 billion in FY-2012—an increase of 72.9 percent in seven years. Require More User Responsibility. It is inappropriate to require those who provide core state services, such as law enforcement or 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 its 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 industries, and other non-core functions of government. 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. 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 government. 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 recent consolidations, 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 focusing on eliminating non-core spending, this budget puts more than $134 million (for FY-2014) 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—especially given that Oklahomans went to the polls in November 2012 and approved State Question 759, which banned affirmative action programs in the state. 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 local 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 fully 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) (both are now consolidated into the Office of Management and Enterprise Services), 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 health maintenance organization (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 $75 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. According to the Oklahoma Tax Commission for 2013 there will be 61,755 tax returns (federal adjusted gross income of $45,000-$49,999), with an average Oklahoma personal income tax liability of $981. Based on this, the amount of money given (annually) by lawmakers to

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 4

over-pay for benefits can be compared to all (and then some) 61,755 taxpayers and their families (at this income level) that are deprived of their hard-earned income. Savings FY-2014: $37.8 million (half a fiscal year) Savings FY-2015 and thereafter: $75.6 million (annually) 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-2014 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.

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 previous spending reduction, or reductions in the 2013 session, whichever is lower. Further, to add muchneeded accountability to the hiring process, all stateappropriated 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-2014: $5.4 million (half a fiscal year) Savings FY-2015: $23.4 million Savings FY-2016: $41.4 million Continued Retirement Reform. Policymakers enacted significant retirement reforms in 2011, but the work is not done. During the 2013 session, the legislature should implement a defined-contribution (DC) plan (effective July 1, 2012) for all new state [Oklahoma Public Employees Retirement System (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. Based on independent actuarial evaluations, this plan would allow for complete elimination of the over

$1.6 billion in unfunded liability for OPERS over a period of time (worst case scenario 38 years, best case 12 years), cap immediately the liability exposure to new hires, and allow for a more modern compensation package. As a part of retirement reform, it is time to consolidate the five separate boards that govern the six active defined-benefit retirement plans operated by the state. Given the similar nature of the governance and fiduciary responsibilities of public retirement systems, economies of scale can be achieved by consolidating governance. For example, a major function of a board of a retirement system is to employ fund managers to responsibly and successfully invest the funds of the system that pays benefits to beneficiaries. By consolidating, fees charged by fund managers can be reduced because of the larger pooling of decision making — all while keeping the individual funds intact and separate. Also, with combined governance, duplications that exist in agencies can be reduced to yield savings for the system so that operational improvements can be more actively pursued. As with a number of issues facing government, the status quo is tempting and has a solidified constituency. The problem is that the status quo has produced an unfunded liability that exceeds current state appropriations by 69 percent and threatens the state’s ability to meet its promises to current employees. Consolidation of Oklahoma’s retirement system boards can make sure government keeps its promises, recruits a qualified workforce, and doesn’t unnecessarily burden taxpayers. Savings: Long-term elimination of state pension liabilities and future obligations and savings in reductions of unnecessary administrative costs 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 repair core assets, establish a fund with planned asset repair and placement, and provide savings to continue to cut personal income taxes.

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Savings FY-2015: $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-2015: $300 million (privatize GRDA) Agency, Board, and Commission Reform. Whether it is the Oklahoma Health Care Authority board’s past indifference to a director’s high 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 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 $2.09 billion in FY-2012—an increase of 31.4 percent in seven years. Total state spending on health services has grown from $3.14 billion in FY-2005 to $5.44 billion in

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FY-2012—an increase of 72.9 percent in seven 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 designate an oversight committee designed specifically to review and make recommendations for all state programs utilizing federal funds. The legislature’s newly created “non-appropriated” committees, whose purpose is to review spending not directly appropriated by lawmakers, are a suitable place for this task of federal funds oversight. The current unchecked growth in state government spending is irresponsible. It is time for policymakers to take fiscal federalism seriously, and chart a new course toward 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 2013 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 2013 session. Savings: Long-term reduction in the costs of providing state services to allow for the re-direction of savings to core services and continued personal income tax cuts

OCPA FY-2014 Budget Recommendation FY-13 Appropriation EDUCATION COMMITTEE Arts Council Career and Technology Education Board of Education Oklahoma 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

4,010,087 135,142,618 2,333,604,082 3,822,328 955,260,277 16,000,000 5,898,633 4,379,254 167,194 6,332,274 17,811,449 1,526,179

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

0 131,736,863 2,333,269,319 0 954,939,901 15,934,498 5,846,114 0 165,323 5,139,082 14,790,278 0

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

-4,010,087 -3,405,755 -334,763 -3,822,328 -320,376 -65,502 -52,519 -4,379,254 -1,871 -1,193,192 -3,021,171 -1,526,179

-100.00% -2.52% -0.01% -100.00% -0.03% -0.41% -0.89% -100.00% -1.12% -18.84% -16.96% -100.00%

GENERAL GOVERNMENT AND TRANSPORTATION COMMITTEE Auditor and Inspector $ 4,706,986 Bond Advisor $ 143,112 Election Board $ 7,805,808 Emergency Management $ 651,179 Ethics Commission $ 588,129 Office of Management and Enterprise Services $ 40,132,347 Governor $ 2,172,900 House of Representatives $ 15,574,682 Legislative Service Bureau $ 4,892,835 Lieutenant Governor $ 506,591 Merit Protection Commission $ 490,967 Military Department $ 10,747,997 Senate $ 12,171,789 Space Industry Development Authority $ 394,589 Tax Commission $ 46,915,944 Department of Transportation $ 206,405,702 Treasurer $ 3,743,873

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

4,565,338 139,603 7,783,116 620,299 582,865 38,738,321 2,139,330 14,339,225 4,885,583 501,444 486,288 10,335,100 10,996,688 0 46,090,383 205,837,870 3,499,366

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

-141,648 -3,509 -22,692 -30,880 -5,264 -1,394,026 -33,570 -1,235,457 -7,252 -5,147 -4,679 -412,897 -1,175,101 -394,589 -825,561 -567,832 -244,507

-3.01% -2.45% -0.29% -4.74% -0.89% -3.47% -1.54% -7.93% -0.15% -1.02% -0.95% -3.84% -9.65% -100.00% -1.76% -0.28% -6.53%

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

$ $ $ $ $ $

921,983,007 61,783,682 3,740,338 311,421,073 41,624,391 35,698,752

$ $ $ $ $ $

821,430,450 59,477,656 3,472,481 309,511,335 38,611,525 33,496,125

$ $ $ $ $ $

-100,552,557 -2,306,026 -267,857 -1,909,738 -3,012,866 -2,202,627

-10.91% -3.73% -7.16% -0.61% -7.24% -6.17%

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

$ $ $ $ $

2,027,167 317,607 586,958,664 96,187,205 30,449,232

$ $ $ $ $

1,997,691 310,823 629,145,148 95,359,890 29,351,018

$ $ $ $ $

-29,476 -6,784 42,186,484 -827,315 -1,098,214

-1.45% -2.14% 7.19% -0.86% -3.61%

NATURAL RESOURCES COMMITTEE Department of Agriculture, Food and Forestry Department of Commerce Conservation Commission Consumer Credit Commission Corporation Commission Department of Environmental Quality Historical Society Horse Racing Commission Insurance Department J.M. Davis Memorial Commission

$ $ $ $ $ $ $ $ $ $

27,610,247 29,573,212 10,061,684 31,730 11,324,427 7,557,973 12,502,546 2,072,167 1,871,937 306,009

$ $ $ $ $ $ $ $ $ $

24,444,042 21,658,578 9,119,877 0 10,831,640 6,964,594 12,225,850 0 0 0

$ $ $ $ $ $ $ $ $ $

-3,166,205 -7,914,634 -941,807 -31,730 -492,787 -593,379 -276,696 -2,072,167 -1,871,937 -306,009

-11.47% -26.76% -9.36% -100.00% -4.35% -7.85% -2.21% -100.00% -100.00% -100.00%

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

FY-14 Appropriation

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FY-13 Appropriation

FY-14 Appropriation

$ Change

% Change

NATURAL RESOURCES COMMITTEE (CONT.) Department of Labor Department of Mines Scenic Rivers Commission Department of Tourism and Recreation Water Resources Board Will Rogers Memorial Commission Workers’ Compensation Commission

$ $ $ $ $ $ $

3,311,160 779,139 271,315 21,803,003 6,999,671 740,486 0

$ $ $ $ $ $ $

3,224,136 743,113 258,565 19,822,314 6,891,943 0 10,000,000

$ $ $ $ $ $ $

-87,024 -36,026 -12,750 -1,980,689 -107,728 -740,486 10,000,000

-2.63% -4.62% -4.70% -9.08% -1.54% -100.00% N/A

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

$ $ $ $ $ $ $ $

3,140,334 463,731,068 1,796,764 13,848,059 3,682,560 7,198,281 3,616,418 89,894,790

$ $ $ $ $ $ $ $

3,098,342 458,723,195 1,772,552 13,503,588 3,634,837 7,113,128 3,454,534 88,261,330

$ $ $ $ $ $ $ $

-41,992 -5,007,873 -24,212 -344,471 -47,723 -85,153 -161,884 -1,633,460

-1.34% -1.08% -1.35% -2.49% -1.30% -1.18% -4.48% -1.82%

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 Workers’ Compensation Court

$ $ $ $ $ $ $ $ $

15,228,141 3,484,631 34,187,258 59,600,000 14,699,353 0 2,217,454 17,337,000 4,247,166

$ $ $ $ $ $ $ $ $

15,030,348 3,450,827 32,883,181 58,877,605 14,582,385 0 2,178,270 17,084,779 4,162,247

$ $ $ $ $ $ $ $ $

-197,793 -33,804 -1,304,077 -722,395 -116,968 0 -39,184 -252,221 -84,919

-1.30% -0.97% -3.81% -1.21% -0.80% N/A -1.77% -1.45% -2.00%

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

$ $

11,532,469 8,080,000

$ $

11,532,469 3,080,000

$ $

0 -5,000,000

0.00% -61.88%

$ $

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

$ $

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

6,828,529,375

6,695,734,608

-132,794,767

Appropriation Savings (FY-2013 Appropriations less OCPA Recommendations)

132,794,767

FY-14 Growth in Appropriation Authority over FY-13 Certified Revenue Estimate (February 2013 Estimate)

216,381,208

Estimated FY-2014 revenue decline from income tax cut (All funds Excluding ROADS Fund)

-117,963,198

Government Wide Reforms (Not included in individual agency adjustments) Telecommunications efficiency audits Hiring Reform Total Appropriations Including Misc Approp

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

-17,004,762

Cash Flow Reserve Transer to Special Cash

116,000,000

Total Surplus Funds

330,208,015

Construction of Medical Examiner’s Office Capitol Building Repairs/Facility Study

$ $

-43,000,000 -10,000,000

Infrastructure projects

-53,000,000

Surplus funds to carryforward for FY-2015

277,208,015

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N/A N/A -1.94%

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. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission, for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount

of money given by lawmakers for state sponsorship of the arts can be compared to approximately 2,916 taxpaying families deprived of their hard-earned income. 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-2013

4,010,087

Not a core function of government; eliminate appropriation

(4,010,087)

Total Savings

4,010,087

FY-2014

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 carry-forward balances increased from $36.8 million in FY-2001 to $106.1 million in FY-2011, and local property tax funds continue to grow. 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

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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-2013, less savings from the implementation of the state employee health insurance reform, less appropriations to CareerTechs in large MSAs that have sufficient local revenue to support their operations, and less a targeted earmark.

Career and Technology Education FY-2013

135,142,618

Savings from state employee health insurance reform

(305,755)

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

3,405,755

FY-2014

131,736,863

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-2012 Comprehensive Annual Financial Report, total state spending on education has grown from $3.53 billion in FY-2005 to $4.39 billion in FY2012—an increase of 24.4 percent in seven 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 report from the research affiliate of The State Chamber, Oklahoma public schools spend $9,121 per pupil. This per-pupil expenditure significantly exceeds the average cost associated for alternatives to public education. Cost-saving alternatives (such as vouchers, tax credits, and Education Savings Accounts, for example) need serious attention from lawmakers. Imagine a state where a mom using Medicaid could only take her daughter to a government hospital, or

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where child care subsidies from the state could only be used at a government-operated daycare center. Imagine a state where Oklahoma Higher Learning Access Program scholarships were granted only to students who enrolled at the college or university nearest their home, and that it had to be a public institution. Better yet, imagine a state in which high school students could only attend the nearest public college or university. Needless to say, these programs would face significant operational challenges and would fail to provide many Oklahomans the programs are intended to serve. Sadly, this is the mode of operation for providing funding for K-12 public education. Currently in Oklahoma, a child’s residential address largely determines the educational fate of that child. The current state funding formula essentially says to parents: You will only get state assistance for your child’s education if you go to a school designated by bureaucrats—regardless of that school’s performance or quality. This is unfair and discriminatory.

Now imagine an Oklahoma where families, students, and educators were connected by state resources to achieve the maximum in education effectiveness, flexibility, and efficiency. Imagine a state where students and parents can make a choice about where students will receive an education best tailored for the learning needs of each student. Imagine a state K-12 funding mechanism that can be used to allow students and families to take supplemental courses as needed at institutions of higher learning when traditional methods are not adequate or satisfactory. This can be accomplished in Oklahoma by implementing a state-funded Education Savings Account (ESA). Arizona is the only state so far to establish any form of ESAs, but as Dr. Matthew Ladner points out, “Education Savings Accounts are the way of the future.” Under such accounts—managed by parents with state supervision to ensure accountability— parents can use their children’s education funding to choose among public and private schools, online education programs, certified private tutors, community colleges and even universities. Education Savings Accounts allow parents to withdraw their children from public district or charter schools and receive a deposit of public funds into government authorized savings accounts with restricted, but multiple, uses. Those funds can cover private school tuition and fees, online learning programs, private tutoring, community college costs and other higher education expenses. To empower parents and students, it’s time for

Oklahoma to change its outdated funding program. Oklahoma should convert its funding mechanism for state support of K-12 education to funding ESAs. It’s time to fund students, not schools. For starters, Oklahoma should begin to offer ESAs for newly enrolled pre-K students starting with the 2013-2014 school year. If parents or guardians choose not to enroll their preschooler in a public pre-K program, the state will deposit the state’s portion of pre-K funds into the parents’ savings account. According to the National Institute for Early Education Research (NIEER), state funding (excluding local and federal aid) for 4-year-olds averages $3,461 per student in Oklahoma. Parents choosing the ESA could use this money for any of the multiple alternatives mentioned above. Ideally, the program would be expanded every year, so that parents of K-12 students could also benefit from ESAs. This will instill in students, parents, and families the paradigm shift to saving, planning, and engaging in education throughout life. Oklahoma’s funding formula which determines the amount of state aid given to public schools is outdated. The formula uses the highest enrollment number in a three-year period to determine aid, which results in state aid not matching the actual annual enrollment for students and in inequitable school funding. Funding should be adjusted based on the annual enrollment. When this change is made, many schools will justly see an increase in their state aid. This budget recommends that the Board of Education receive the same appropriation provided for FY2013, less savings from the implementation of the state employee health insurance reform.

Board of Education

FY-2013

Savings from state employee health insurance reform

2,333,604,082 (334,763)

Total Savings

334,763

FY-2014

2,333,269,319

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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 2011, Florida Gov. Rick Scott vetoed the state’s $4.8 million appropriation for public broadcasting. State-run television is not a core function of government, worthy of taking the hard- earned income of Oklahomans. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According

to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns (federal adjusted gross income of $50,000-$54,999), with an average Oklahoma personal income tax liability of $1,375. Based on this, the amount of money given by lawmakers for state-run television can be compared to approximately 2,780 taxpayers and their families that are deprived of their hard-earned income. 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-2013

3,822,328

(3,822,328)

Not a core function of government; eliminate appropriation

Total Savings

3,822,328

FY-2014

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 trans-

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formational 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 approve 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 percent – main campus tuition and fee increases over last 9 years • 25 percent – 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 percent – main campus tuition and fee increases over last 9 years

• 25 percent – 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 2,059 or 2.13 percent. Meanwhile, over the same period, average undergraduate resident tuition and mandatory fee increases grew 69.51 percent for research universities 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 (review of FY-2012 and prior years) 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

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

(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

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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. In summary, the State Regents should address the following challenges: • Lack of “teaching only” tenure track, low professor teaching loads • Distractions taking away from core teaching and sound research • Non-applicable course requirements • Lack of public access to information such as student evaluations • Lack of collaboration between common education and higher education • Perceived infinite third-party funding sources distorting prices and demand, thus exponentially growing costs of higher education

The State Regents should implement the following reforms immediately: • Enact a moratorium on tuition and fee increases (moratorium would be enacted by the state Legislature) for the next three years, and then regents would be allowed the authority to increase tuition for inflation only. • Create a higher education transparency website with information such as a total cost of degree calculator, matched with expected student debt, employment rate of degree, and salary/income return of degree selected • Create a “Degree Requirements Council,” consisting of employers only, who over a period of two years will evaluate general education requirements, recommending elimination of non-applicable courses • Create a “Research Review Council,” consisting of employers only, to review research activities and make recommendations concerning usefulness and resource allocation • Separate teaching and research functions, require accountability and transparency for funding and results for each function

• Create a professor “teaching only” tenure track • Give performance bonuses for teaching more than three classes a semester • Make student professor evaluations available to the public • Make faculty workloads and costs available to the public • Make higher education and college and university lobbying costs available to the public, regardless of source (include names of those handling those positions) • Make higher education and college and university “government affairs” or “legislative liaison” costs available to the public, regardless of source • Restructure oversight and create a “central office” for education • Join the national effort and create a $10,000 bachelor’s degree at Oklahoma’s public institutions of higher education This budget recommends that the State Regents for Higher Education receive the same appropriation for FY2013 less savings from the implementation of the state employee health insurance reform and that the State Regents implement the reforms described above.

Regents for Higher Education FY-2013

Savings from state employee health insurance reform

955,260,277 (320,376)

Total Savings

320,376

FY-2014

954,939,901

Land Commission This budget recommends that the Land Commission receive the same appropriation provided for FY2013, less savings from the implementation of the state

employee health insurance reform, and recommends the Commission allocate any additional savings to schools as required by law.

Land Commission FY-2013

16,000,000

Savings from state employee health insurance reform

$ $ $ $

(65,502) 65,502 15,934,498

Total Savings FY-2014

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Department of Libraries FY-2013 Savings from state employee health insurance reform Total Savings FY-2014

$ $ $ $ $

5,898,633 (52,519) 52,519 5,846,114

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. Based on historical median income growth, adjusting from 2011, Oklahomaâ&#x20AC;&#x2122;s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for state sponsorship of physician training can be compared to approximately 3,185 taxpayers and their families that are deprived of their hard-earned income. Further, focusing on 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-2013 Function of local government and local workforce recruitment; eliminate appropriation Total Savings FY-2014

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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 job-ready 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 that the Board of Private Vocational Schools receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Board of Private Vocational Schools FY-2013 Savings from state employee health insurance reform Total Savings FY-2014

$ $ $ $ $

167,194 (1,871) 1,871 165,323

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 other sources totaling 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 FY2013, 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-2013 Implement tuition sharing program Savings from state employee health insurance reform Total Savings FY-2014

$ $ $ $ $ $

6,332,274 (1,125,000) (68,192) 1,193,192 5,139,082

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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. It 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. Based on historical median income growth, adjusting from 2011, Oklahoma’s me-

dian household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for state sponsorship of physician training can be compared to approximately 2,182 taxpayers and their families that are deprived of their hard-earned income. This budget recommends that OCAST receive the same appropriation provided for FY-2013, less funding for the OTCC and less savings from the implementation of the state employee health insurance reform.

Center for Science and Technology FY-2013

17,811,449

Savings from state employee health insurance reform

(21,171)

(3,000,000)

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

Total Savings

3,021,171

FY-2014

14,790,278

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 $30.5 million to the OCTP, including the $1.5 million appropriated to the agency for FY 2013. Despite poor results, total state spending on education continues to increase. 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

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subsidized colleges and universities. These government entities should already “implement and facilitate competency-based teacher 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 pro-

gram 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-2013

1,526,179

Duplicative function of government and function of local government

(1,526,179)

Total Savings

1,526,179

FY-2014

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Auditor and Inspector FY-2013

Savings from state employee health insurance reform

4,706,986 (141,648)

Total Savings

141,648

FY-2014

4,565,338

Bond Advisor This budget recommends that the Bond Advisor receive the same appropriation provided for FY-2013,

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

Bond Advisor FY-2013

Savings from state employee health insurance reform

143,112 (3,509)

Total Savings

3,509

FY-2014

139,603

Election Board This budget recommends that the Election Board receive the same appropriation provided for FY-2013,

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

Election Board FY-2013

Savings from state employee health insurance reform

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7,805,808 (22,692)

Total Savings

22,692

FY-2014

7,783,116

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

2013, less savings from the implementation of the state employee health insurance reform.

Emergency Management FY-2013

651,179

Savings from state employee health insurance reform

(30,880)

Total Savings

30,880

FY-2014

620,299

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

2013, less savings from the implementation of the state employee health insurance reform.

Ethics Commission FY-2013

Savings from state employee health insurance reform

588,129 (5,264)

Total Savings

5,264

FY-2014

582,865

Office of Management and Enterprise Services (formerly the Office of State Finance) This budget recommends that the OMES receive the same appropriation provided for FY-2013, less sav-

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

Office of Management and Enterprise Services FY-2013

40,132,347

Savings from state employee health insurance reform

(1,394,026)

Total Savings

1,394,026

FY-2014

38,738,321

Governor This budget recommends that the Governor receive the same appropriation provided for FY-2013, less sav-

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

Governor

FY-2013

Savings from state employee health insurance reform

2,172,900 (33,570)

Total Savings

33,570

FY-2014

2,139,330

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 4

House of Representatives This budget recommends that the House of Representatives receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform and less one-time funds for FY-2013. To better facilitate lawmakersâ&#x20AC;&#x2122; continuing education on policy development and their need to participate in lawmaker-led organi-

zations, 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-2013

15,574,682

Savings from state employee health insurance reform

(235,457)

Reduce FY-2013 one-times

(1,000,000)

Total Savings

1,235,457

FY-2014

14,339,225

Legislative Service Bureau This budget recommends that the Legislative Service Bureau receive the same appropriation provided for FY-2013, 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 organizations, this budget also recom-

mends 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.

Legislative Service Bureau FY-2013

Savings from state employee health insurance reform

4,892,835 (7,252)

Total Savings

7,252

FY-2014

4,885,583

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

2013, less savings from the implementation of the state employee health insurance reform.

Lieutenant Governor FY-2013

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 4

506,591 (5,147)

Total Savings

5,147

FY-2014

501,444

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

for FY-2013, less savings from the implementation of the state employee health insurance reform.

Merit Protection Commission FY-2013

Savings from state employee health insurance reform

490,967 (4,679)

Total Savings

4,679

FY-2014

486,288

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

2013, less savings from the implementation of the state employee health insurance reform.

Military Department FY-2013

Savings from state employee health insurance reform

10,747,997 (412,897)

Total Savings

412,897

FY-2014

10,335,100

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-2013. This budget also recommends lawmakers cease the practice of raid-

ing the operating fund of the Secretary of State and diverting those funds to other sources. These funds are derived from Oklahomans. Any surplus funds should be used for the Secretary of State to save for future needs or to reduce fees.

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 4

Senate This budget recommends that the Senate receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform and less one-time funds for FY-2013. To better facilitate lawmakersâ&#x20AC;&#x2122; continuing education on policy development and their need to participate in lawmaker-led organizations, this bud-

get 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-2013

12,171,789

Savings from state employee health insurance reform

(175,101)

Reduce FY-2013 one-times

(1,000,000)

Total Savings

1,175,101

FY-2014

10,996,688

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 $8.2 million in taxpayer appropriations to SIDA since its inception, including the $394,589 given to the agency for FY-2013. Based on historical median income growth, adjusting from 2011, Oklahomaâ&#x20AC;&#x2122;s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax li-

ability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for state sponsorship of space travel can be compared to approximately 287 taxpayers and their families that are deprived of their hard-earned income. State-subsidized space travel is not a core function of state government. Also, the infrastructure of 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-2013

394,589

Savings from state employee health insurance reform

(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 4

Total Savings

394,589

FY-2014

Tax Commission This budget recommends that the Tax Commission receive the same appropriation provided for FY-2013,

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

Tax Commission FY-2013

Reduce appropriation, function of private industry and local government

46,915,944 (825,561)

Total Savings

825,561

FY-2014

46,090,383

Department of Transportation This budget recommends that the Department of Transportation receive the same appropriation provided for FY-2013, plus funds to maintain the ROADS

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

Department of Transporation FY-2013

206,405,702

Savings from state employee health insurance reform

(2,692,723)

Scheduled transporation increases to meet maintenance schedule

2,124,891

Total Savings

567,832

FY-2014

205,837,870

Treasurer This budget recommends that the Treasurer receive the same appropriation provided for FY-2013, less savings from the implementation of the state em-

ployee health insurance reform and savings and efficiency efforts internally accomplished by the Treasurerâ&#x20AC;&#x2122;s office.

Treasurer

FY-2013

3,743,873

Savings from state employee health insurance reform

(54,507)

Additional savings and efficiencies implemented by agency

(190,000)

Total Savings

244,507

FY-2014

3,499,366

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 4

Public Health Health Care Authority According to the state’s FY-2012 Comprehensive Annual Financial Report, total state spending on health services has grown from $3.14 billion in FY-2005 to $5.44 billion in FY-2012—an increase of 72.9 percent in seven years. According to the Oklahoma Health Care Authority’s FY-2000, FY-2010, and FY-2012 annual reports: • In FY-2000 there were nearly 416,785 Medicaid (12.13 percent of the population) enrollees and total (state and federal) Medicaid expenditures of $1.14 billion. By FY-2012, the number of Medicaid enrollees had ballooned to 1,007,356 (about 26.57 percent of the state’s population) and expenditures had skyrocketed to $4.77 billion—an increase of 190.9 percent in just 12 years. Inflation over this period was just 35 percent. Total population growth in Oklahoma over that same period was just 10.3 percent. The unemployment rate for Oklahoma only moderately increased over this period, 3.1 percent in 2000, ranking 12th out of the 50 states and in Oklahoma in •

• •

•

2012 was 5.2 percent, ranking 5th out of the 50 states. For Federal Fiscal Year 2000, all funds spent by the state for Medicaid excluding federal funds were $492.1 million. In Federal Fiscal Year 2012, all funds spent by the state for Medicaid were $1.8 billion—a 277.4 percent increase in just 12 years. Approximately 64 percent of births are covered by Medicaid. Approximately 72 percent of all Oklahoma children under the age of five have been covered by Medicaid at some point during FY-2012. Medicaid was originally designed for the aged, blind, and disabled, yet now this population only comprises 16.4 percent of enrollees and just 47.1 percent of the cost in Oklahoma. Based on 2010 data, 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.

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 4

• In a March 1, 2013 article, Peter J. Rudy of Oklahoma Capitol Source found that the state Medicaid program in Oklahoma has increased in costs and those served for every year of the last 16 years, citing that “The number of individuals served has never decreased – no matter what the state’s economic condition is – more than doubling in that same period.” The problem is not that there is too little money for Medicaid; the problem is there are too many people on Medicaid, which has already been expanded too far—and those enrollees are driving program expenditures beyond sustainable limits. Oklahoma voters decided to install a center-right government because they are looking for 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, or adopt Medicaid program plan amendments 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. Until a block grant and premium assistance program can be fully implemented, state leaders should take advantage of all currently available options to significantly improve Medicaid by implementing the best Medicaid reforms pursued by Florida, Louisiana, Kansas, and other states looking to make Medicaid serve patients first and empower patients toward selfsufficiency. The Foundation for Government Accountability in Florida has provided extensive information regarding Florida’s success with its Medicaid reform and the cumulative hundreds of millions of dollars it has saved the state of Florida. Louisiana is pursuing similar reforms. In the first year, Louisiana has experienced savings exceeding $135 million from implementing

Medicaid reform. Fundamentally, the reforms refocus Medicaid programs on the patient, incentivized care coordination, health improvement, patient empowerment, and taxpayer savings. The reforms include the following (the vast majority of which can be implemented by way of a plan amendment process which is much shorter than a waiver process) and have been approved by the current HHS administration of President Barack Obama: • Mandatory Medicaid benefits • Optional Medicaid benefits • Case manager to help coordinate patient care • Patients can switch plans • State offers traditional HMO plans (for-profit and not-for-profit) • Patients choose from at least four plans • Patients get choice counseling that helps them make health plan decisions • Patients can buy private coverage, if available • Provider Service Networks (PSNs) that are hospitalrun • PSNs run by physicians or Federally Qualified Health Centers (FQHCs) • Specialty plans that treat specific conditions and populations • Plans can negotiate higher fees to network physicians • Plans can negotiate higher fees to network specialists • Plans can provide richer optional benefits (i.e., more visits, more prescriptions) • Plans can tailor preferred drug lists (PDLs) • Plans can waive copays for patients • Plans can provide additional benefits, such as preventive care and adult vision/dental • Plans can provide disease management and disease-specific benefits and services • Plans can provide new benefits, such as respite care and over-the-counter pharmacy • Patients get cash incentives for healthy behavior • Plans get more money for enrolling sick patients and making them well (risk-adjusted rates) • State has the flexibility for payment reform and innovation • State tracks and publicizes patient access and sat-

• • • • • •

•

isfaction (CAHPS survey) State tracks and publicizes 30+ patient health outcomes (HEDIS measures) State tracks and publicizes patients’ plan choices Medicaid produces fixed, budgeted costs per person State has the ability to control Medicaid cost trends Medicaid produces planned savings for the state Other Medicaid reform options include: Member Cost-Sharing: It is altogether reasonable to ask welfare recipients or their families (either immediate or extended families) to contribute in a small way to the free medical care they receive at taxpayer expense. With more than 1,000,000 Oklahomans enrolled in Medicaid, a low monthly premium of $10 each month would return more than $100 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, or could be implemented via a plan amendment with incentives; 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 costsharing (co-pays and deductibles) to certain enrollees. This can include weighting cost-sharing based on those engaged in unhealthy behaviors such as smoking or obesity and excessive emergency room usage, to incentivize better health for Medicaid participants. Legislators should ensure that the state is requiring member cost-sharing to maximum allowable limits. The state should pursue more robust efforts to ensure Medicaid enrollees are actually eligible for coverage. It has been found that some enrollees are unlawfully covered, particularly after marital status changes. Other Medicaid fraud efforts such as those implemented in Pennsylvania should be implemented to ensure the integrity and sustainability of the program for qualifying enrollees.

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 4

• The state should make efforts to ensure that tax cheats who receive Medicaid reimbursement move to a status of properly complying with both federal and state tax laws. • 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 employer-sponsored 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: If reforms are not implemented in the 2013 legislative session, legislators should create a task force to begin studying Medicaid and options for reducing costs. The above proposals should be part of any task force that convenes to explore real reform efforts.

• Medical pricing transparency: The state should incentivize medical providers who are reimbursed by Medicaid to transparently post their prices for all procedures performed (prior to the procedure being performed), to help facilitate Medicaid patients efforts to choose care providers that also offer the best medical prices. This budget recommends that the Health Care Authority receive the same appropriation provided for FY-2013, less savings from a complete and dedicated implementation of Florida/Louisiana Medicaid reforms, less savings from the implementation of the state employee health insurance reform. If Oklahoma were to fully implement the Medicaid reforms implemented in Florida, the total state savings per year would exceed $700 million. This budget reflects the savings in state funds reduced to allow for implementation of the reforms. Reform entitlement programs Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Health Care Authority FY-2013

921,983,007

Medicaid reform

(100,000,000)

Savings from state employee health insurance reform

(552,557)

Total Savings

100,552,557

FY-2014

821,430,450

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

2013, less savings from the implementation of the state employee health insurance reform.

Health Department FY-2013

61,783,682

Savings from state employee health insurance reform

(2,306,026)

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 4

Total Savings

2,306,026

FY-2014

59,477,656

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

J.D. McCarty Center FY-2013

Savings from state employee health insurance reform

3,740,338 (267,857)

Total Savings

267,857

FY-2014

3,472,481

Mental Health and Substance Abuse This budget recommends that the Department of Mental Health and Substance Abuse receive the same appropriation provided for FY-2013, less savings

from the implementation of the state employee health insurance reform.

Mental Health and Substance Abuse FY-2013

Savings from state employee health insurance reform

311,421,073 (1,909,738)

Total Savings

1,909,738

FY-2014

309,511,335

University Hospitals This budget recommends that the University Hospitals receive the same appropriation provided for FY2013, less savings from the implementation of the state

employee health insurance reform and removal of one-time funds for a completed project.

University Hospitals

FY-2013

41,624,391

Savings from state employee health insurance reform

(12,866)

Remove one-time funds for completion of a project

(3,000,000)

Total Savings

3,012,866

FY-2014

38,611,525

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 4

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

vided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Department of Veterans Affairs FY-2013

35,698,752

Savings from state employee health insurance reform

(2,202,627)

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 4

Total Savings

2,202,627

FY-2014

33,496,125

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

provided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Commission on Children and Youth FY-2013

Savings from state employee health insurance reform

2,027,167 (29,476)

Total Savings

29,476

FY-2014

1,997,691

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

for FY-2013, less savings from the implementation of the state employee health insurance reform.

Office of Disability Concerns FY-2013

Savings from state employee health insurance reform

317,607 (6,784)

Total Savings

6,784

FY-2014

310,823

Department of Human Services This budget recommends that the Department of Human Services receive the same appropriation provided for FY-2013, plus funds to facilitate the progres-

sion toward meeting commitments for the â&#x20AC;&#x153;Pinnacle Plan,â&#x20AC;? less savings from the implementation of the state employee health insurance reform.

Department of Human Services

FY-2013

586,958,664

Pinnacle plan

50,600,000

Savings from state employee health insurance reform

(8,413,516)

Total Savings

42,186,484

FY-2014

629,145,148

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 4

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 2013 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. This budget recommends that the OJA receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Office of Juvenile Affairs FY-2013

Savings from state employee health insurance reform

96,187,205 (827,315)

Total Savings

827,315

FY-2014

95,359,890

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

provided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Department of Rehabilitation Services FY-2013

30,449,232

Savings from state employee health insurance reform

(1,098,214)

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 4

Total Savings

1,098,214

FY-2014

29,351,018

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-2013, less funding for targeted earmarks and less savings from the implementation of the state employee health insurance reform. The total amount of targeted earmarks funneled through the Department of Agriculture’s budget equals $2,705,000. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household in-

come will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for targeted earmarks through the Department of Agriculture can be compared to approximately 1,967 taxpayers and their families that are deprived of their hard-earned income.

Department of Agriculture, Food and Forestry

FY-2013

27,610,247

Savings from state employee health insurance reform

(461,205)

Remove earmark for Oklahoma Youth Expo

(2,200,000)

Remove earmark for Tulsa State Fair — intensely local function

(85,000)

Remove earmark for National Finals Steer Roping Champioship — intensely local function Remove earmark for Made In Oklahoma program

$ $

(25,000) (300,000)

Remove earmark for Clem McSpadden Roping

(25,000)

Remove earmark for Reining Horse

(25,000)

Remove earmark for Scenic Rivers

(20,000)

Remove earmark for Medicine Park

(25,000)

Total Savings

3,166,205

FY-2014

24,444,042

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 4

Department of Commerce This budget recommends that the Department of Commerce receive the same appropriation provided for FY-2013, less a duplicative welfare program, less targeted earmarks, less funding for the Native 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. The total amount of targeted earmarks and “pass-throughs” funneled through the Department of Commerce’s budget equals $7,760,236. Based on historical median in-

come growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for non-core spending through the Department of Commerce’s budget can be compared to approximately 5,644 taxpayers and their families that are deprived of their hard-earned income.

Department of Commerce FY-2013

29,573,212

Savings from state employee health insurance reform

(154,398)

provided through the Department of Human Services

(2,500,000)

IPRA National Finals Rodeo - remove funds for intensely local function

(25,000)

support as originally intended

(1,325,236)

Remove earmark for COGS general operations

(400,000)

Remove earmark for Community Action Agencies

(550,000)

Remove earmark for Community Action Agencies and failed Head Start Program

(2,400,000)

Remove earmark for Rural Enterprises Inc

(460,000)

Remove earmark for Oklahoma Center for Rural Development

(100,000)

Duplicative nutrition program, food stamp welfare services already

Make NACEA non-appropriated, require private operational

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 4

Total Savings

7,914,634

FY-2014

21,658,578

Conservation Commission This budget recommends that the Conservation Commission receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform and less the amount spent on the 10 duplicative conservation district offices. Conservation district offices provide administrative services in each of the state’s 77 counties. Each county has at least one district office that can adequately provide the administrative services necessary for each county. As of FY-2012, there are 87 conservation district offices, with 10 providing duplicative administrative support. These duplicate offices

should be eliminated. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for duplicative administration through the Conservation Commission’s budget can be compared to approximately 631 taxpayers and their families that are deprived of their hard-earned income.

Conservation Commission FY-2013 Reduce funding for duplicative conservation district offices – 10 districts w/out NRCS Office Savings from state employee health insurance reform Total Savings FY-2014

$ $ $ $ $ $

10,061,684 (868,000) (73,807) 941,807 9,119,877

Consumer Credit Commission This budget recommends that the Consumer Credit Commission (CCC) no longer receive a state appropriation. According to its website, “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.” 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. Efforts to reduce the CCC appropriated budget were accomplished by lawmakers for FY-2013 and should be fully implemented for FY-2014. Require more user responsibility

Consumer Credit Commission FY-2013 Function of government to be funded by users

31,730

(31,730)

Total Savings

31,730

FY-2014

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 4

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

for FY-2013, less savings from the implementation of the state employee health insurance reform.

Corporation Commission FY-2013

Savings from state employee health insurance reform

11,324,427 (492,787)

Total Savings

492,787

FY-2014

10,831,640

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

vided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Department of Environmental Quality FY-2013 Savings from state employee health insurance reform Total Savings FY-2014

$ $ $ $ $

7,557,973 (593,379) 593,379 6,964,594

Historical Society This budget recommends that the Historical Society receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform. In keeping with the â&#x20AC;&#x153;9 Râ&#x20AC;&#x2122;s of fiscal responsibilityâ&#x20AC;? 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-2015 state appropriations to the Historical Society can be reduced by 10 percent.

Historical Society FY-2013

Savings from state employee health insurance reform

(179,546)

Remove earmark for Wrestling Hall of Fame

(50,000)

Remove earmark for Ft. Reno

(47,150)

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 4

12,502,546

Total Savings

276,696

FY-2014

12,225,850

Horse Racing Commission This budget recommends that the Horse Racing Commission (HRC) 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. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money given by lawmakers for horse racing through the HRC’s budget can be compared to approximately 1,507 taxpayers and their families that are deprived of their hard-earned income. Require more user responsibility

Horse Racing Commission FY-2013 Non-core function, fund by users Total Savings FY-2014

$ $ $ $ $

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

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 4

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 $12 million in the last three fiscal years alone). Clearly there are adequate fees available to operate the Insurance Department without legislative appropriations. Based on historical median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money needlessly given by lawmakers for insurance regulation that can be self-funded can be compared to approximately 1,361 taxpayers and their families that are deprived of their hard-earned income. Require more user responsibility

Insurance Department FY-2013

1,871,937

Function of government to be funded by users

(1,871,937)

Total Savings

1,871,937

FY-2014

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-2013

306,009

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

(306,009)

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 4

Total Savings

306,009

FY-2014

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

2013, less savings from the implementation of the state employee health insurance reform.

Department of Labor FY-2013

Savings from state employee health insurance reform

3,311,160 (87,024)

Total Savings

87,024

FY-2014

3,224,136

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Department of Mines FY-2013

779,139

Savings from state employee health insurance reform

(36,026)

Total Savings

36,026

FY-2014

743,113

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

for FY-2013, less savings from the implementation of the state employee health insurance reform.

Scenic Rivers Commission

FY-2013

271,315

Savings from state employee health insurance reform

(12,750)

Total Savings

12,750

FY-2014

258,565

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 4

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 Governorâ&#x20AC;&#x2122;s budget books and reports from the OTRD, from FY-2001 to FY2012 lawmakers have appropriated $8.2 million for losses on state golf courses. For FY-2012, appropriations for losses were more than $270,000. 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 U.S. 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-2015. Based on historical median income growth, adjusting from 2011, Oklahomaâ&#x20AC;&#x2122;s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (federal adjusted gross income of $50,000-$54,999). Accordingly, the amount of money needlessly given by lawmakers for targeted earmarks and non-core spending through the OTRDâ&#x20AC;&#x2122;s budget can be compared to approximately 1,529 taxpayers and their families that are deprived of their hardearned income. This budget recommends that the Department of Tourism and Recreation receive the same appropriation provided for FY-2013, 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-2013

Eliminate state subsidies for losses on state golf courses

(271,000)

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

(698,183)

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 4

21,803,003

Total Savings

1,980,689

FY-2014

19,822,314

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Water Resources Board FY-2013

Savings from state employee health insurance reform

6,999,671 (107,728)

Total Savings

107,728

FY-2014

6,891,943

Will Rogers Memorial Commission This budget recommends that the Will Rogers Memorial Commission (WRMC) no longer receive a state appropriation. According to its website, the Will Rogers Memorial Museums exist “to collect, preserve, and share the life, wisdom, and humor of Will Rogers for all generations. … The Will Rogers Memorial Museums are the premier destinations to introduce, showcase, and celebrate the life, legacy, and spirit of Will Rogers.” 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. Legislative earmarks for the WRMC were $740,486 for FY-2013. Based on historical

median income growth, adjusting from 2011, Oklahoma’s median household income will be $51,726 for 2013. According to the Oklahoma Tax Commission for 2013 there will be 54,811 tax returns with an average Oklahoma personal income tax liability of $1,375 (based on a federal adjusted gross income of $50,000$54,999). Accordingly, the amount of money needlessly given by lawmakers for targeted earmarks and noncore spending through the OTRD’s budget can be compared to approximately 539 taxpayers and their families that are deprived of their hard-earned income. Require more user responsibility Redirect spending to higher-priority uses Restore civil society

Will Rogers Memorial Commission

FY-2013

740,486

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

(740,486)

Total Savings

740,486

FY-2014

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 4

Workers’ Compensation Commission This budget provides for an appropriation for the creation and operation of an administrative Workers’ Com-

pensation Commission, to replace Oklahoma’s current broken, adversarial worker’s compensation system.

Workers’ Compensation Commission FY-2013

Appropriation for Worker’s Compensation Commission

10,000,000

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 4

Total Savings

(10,000,000)

FY-2014

10,000,000

Public Safety ABLE Commission This budget recommends that the Alcoholic Beverage Laws Enforcement (ABLE) Commission receive the same appropriation provided for FY-2013, less sav-

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

ABLE Commission FY-2013

Savings from state employee health insurance reform

3,140,334 (41,992)

Total Savings

41,992

FY-2014

3,098,342

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 pri-

vate 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 DOC receive the same appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance reform. Lawmakers should work to significantly increase the oversight ability of the Governor’s office and the legislature as it relates to the DOC. Efforts to increase the wise use of private alternatives have been thwarted repeatedly by current DOC bureaucrats and their insubordination must end.

Department of Corrections

FY-2013

Savings from state employee health insurance reform

463,731,068 (5,007,873)

Total Savings

5,007,873

FY-2014

458,723,195

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-2013,

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

Fire Marshal FY-2013

Savings from state employee health insurance reform

1,796,764 (24,212)

Total Savings

24,212

FY-2014

1,772,552

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

vided for FY-2013, less savings from the implementation of the state employee health insurance reform.

State Bureau of Investigation FY-2013

Savings from state employee health insurance reform

13,848,059 (344,471)

Total Savings

344,471

FY-2014

13,503,588

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

vided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Law Enforcement Education and Training FY-2013

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 4

3,682,560 (47,723)

Total Savings

47,723

FY-2014

3,634,837

Board of Medicolegal Investigations This budget recommends that the Board of Medicolegal Investigations receive the same annual appropriation provided for FY-2013, less savings from the implementation of the state employee health insurance re-

form. This budget also recommends that one-time funds of $43 million be appropriated by the legislature for replacement of the current medical examiner’s building, which is in desperate need of replacement.

Board of Medicolegal Investigations FY-2013

Savings from state employee health insurance reform

7,198,281 (85,153)

Total Savings

85,153

FY-2014

7,113,128

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

provided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Narcotics and Dangerous Drugs FY-2013

Savings from state employee health insurance reform

3,616,418 (161,884)

Total Savings

161,884

FY-2014

3,454,534

Department of Public Safety The Oklahoma Department of Public Safety (DPS) issues thousands of drivers’ 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 DPS’s operation of drivers’ 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 re-

quiring 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-2013, less savings from the implementation of the state employee health insurance reform. Efforts should be taken to require users to better share in the burden associated with drivers’ licensing. Require more user responsibility Redirect spending to higher-priority uses

Department of Public Safety

FY-2013

89,894,790

Savings from state employee health insurance reform

(1,633,460)

Total Savings

1,633,460

FY-2014

88,261,330

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 4

Judiciary Attorney General This budget recommends that the Attorney General receive the same appropriation provided for FY-2013,

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

Attorney General FY-2013

Savings from state employee health insurance reform

15,228,141 (197,793)

Total Savings

197,793

FY-2014

15,030,348

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Court of Criminal Appeals FY-2013

Savings from state employee health insurance reform

3,484,631 (33,804)

Total Savings

33,804

FY-2014

3,450,827

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

District Attorneys Council FY-2013

34,187,258

Savings from state employee health insurance reform

(1,304,077)

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 4

Total Savings

1,304,077

FY-2014

32,883,181

District Courts This budget recommends that the District Courts receive the same appropriation provided for FY-2013,

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

District Courts FY-2013

Savings from state employee health insurance reform

59,600,000 (722,395)

Total Savings

722,395

FY-2014

58,877,605

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

FY-2013, less savings from the implementation of the state employee health insurance reform.

Indigent Defense System FY-2013

Savings from state employee health insurance reform

14,699,353 (116,968)

Total Savings

116,968

FY-2014

14,582,385

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

vided for FY-2013, continuing to receive no appropriations from the Legislature.

Council on Judicial Complaints FY-2013

Non-appropriated

FY-2014

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

for FY-2013, less savings from the implementation of the state employee health insurance reform.

Pardon and Parole Board

FY-2013

Savings from state employee health insurance reform

2,217,454 (39,184)

Total Savings

39,184

FY-2014

2,178,270

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 4

Supreme Court This budget recommends that the Supreme Court receive the same appropriation provided for FY-2013,

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

Supreme Court FY-2013

17,337,000

Savings from state employee health insurance reform

(215,221)

Reduce funds for one-time project

(37,000)

Total Savings

252,221

FY-2014

17,084,779

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

vided for FY-2013, less savings from the implementation of the state employee health insurance reform.

Workersâ&#x20AC;&#x2122; Compensation Court FY-2013

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 4

4,247,166 (84,919)

Total Savings

84,919

FY-2014

4,162,247

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 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 reliance on unsuccessful state programs that breed more dependency. This is one of the main reasons Oklahoma must empower local communities by replacing its broken, adversarial workers’ compensation system, phasing out its personal income tax. OCPA has

written extensively on the “game-changing” results if lawmakers will replace our broken, adversarial workers’ compensation system with an administrative system. Concerning the personal income tax, as noted in the OCPA/Laffer study, “Eliminating the State Income Tax in Oklahoma: An Economic Assessment” (which was deemed “well founded” by Dr. Eric Fruits and former San Francisco federal reserve vice-president for research Dr. Randall Pozdena), 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 for local governments.” Oklahomans and their communities need to be empowered and freed to create a thriving future. Further, lawmakers should ensure all REAP funds are focused toward infrastructure projects and not earmark-styled expenditures. This budget recommends the REAP program receive the same appropriation provided for FY-2013. Revive free enterprise Reshape the state-local government relationship Redirect spending to higher-priority uses

Rural Economic Action Plan (REAP) FY-2013

11,532,469

Total Savings

FY-2014

11,532,469

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 4

Oklahoma State University (OSU) Medical Center This budget recommends that the OSU Medical Center receive the same appropriation provided for

FY-2013, less one-time funds that were used for a completed project.

OSU Medical Center FY-2013

8,080,000

Remove appropriation for final FY-2013 payment

(5,000,000)

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 4

Total Savings

5,000,000

FY-2014

3,080,000

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