Home > Uncategorized > One Shell of a Shell Game

One Shell of a Shell Game

May 18, 2016


Yesterday during lunch, I wrote about a re-emerging threat to Oklahoma teachers: the plan to cap insurance expenses and pretend to give teachers raises. So far, that hasn’t gone anywhere, but it’s one of many last ditch plans to “fix” the Oklahoma budget and its $1.3 billion hole.The problem with a lot of these plans is that they pop up at the last minute, often leaving us with dire, unintended consequences.

Speaking of unintended consequences, apparently, that wasn’t supposed to be public information yet:

Hickman said even he was confused when committee substitutes to House Bills 3213 and 3214 began appearing in representatives’ email inboxes shortly before 10 a.m. Tuesday, with the notation that they had been added to the agenda of a 1 p.m. Appropriations and Budget Committee meeting.

Currently, I count 12 bills in the House alone that aim to “help” with the budget in general, and in theory, with teacher pay too. I may have missed something, though. Let me quickly run through them, providing very little commentary for most.

HB 3205 This measure would shorten the window for recollecting overpayment of sales tax from three to two years. The fiscal impact statement attached to it estimates the state would keep an extra $10 million per year. This bill has passed the House. I have mixed feelings. On one hand, if you’ve overpaid, you should get your money back. On the other hand, I don’t expect the OTC to keep files open indefinitely.

HB 3206 – The Office of Management and Enterprise Services (OMES) will analyze reserve funds available and compare them with cash flow needs of the state. This bill has been sent to the Governor for signature, but there is no fiscal impact statement.

HB 3207 – This bill simply orders the Grand River Dam Authority to transfer $9.5 million to the state’s General Fund. It hasn’t been heard on the floor yet.

oklaed tagHB 3208 – This is a funky one. Every Oklahoman who owns a car would be required to get a new car tag – ostensibly a shinier one – you know, for safety, and for the kids. This increases our costs, and for no good reason. Besides, I already have a tag I really like.

The bill has passed the House, even though none of the $18.5 million generated by this action would hit the General Fund.

HB 3209 – This bill would require OMES to make cuts to apportioned allocations in the case of a state revenue failure – you know, like the ones we’ve experienced this year. The interesting part is that some funds can be cut by less:

When the certification by the State Board of Equalization for the forthcoming fiscal year General Revenue Fund is less than that of the current fiscal year certification, all revenue apportionments made by the Tax Commission shall be reduced by the same percentage, except for the following:

1. Education Reform Revolving Fund;

2. Apportionments of revenue to any of the following: a. Oklahoma Firefighters Pension and Retirement System, b. Oklahoma Police Pension and Retirement System, c. Uniform Retirement System for Justices and Judges, d. Oklahoma Law Enforcement Retirement System, e. Teachers’ Retirement System of Oklahoma, and f. Oklahoma Public Employees Retirement System;

3. The Oklahoma Higher Learning Access Program;

4. Any apportionments provided for by law in order to fulfill commitments made by the State of Oklahoma pursuant to any compact with a federally recognized Indian Tribe;

5. The Rebuilding Oklahoma Access and Driver Safety (ROADS) Fund;

6. Any apportionment of revenue to a county or other political subdivision for the purpose of road, bridge or other transportationrelated funding;

7. The General Revenue Fund;

8. The Building Bonds Sinking Fund;

9. Any apportionment required for payment of incentives pursuant to the Oklahoma Quality Jobs Program Act; and

10. Any apportionment required for an internal fund of the Oklahoma Tax Commission.

You know, the bill doesn’t say that any of these ten funds will be cut less. It just says they won’t necessarily receive the same percentage cuts. In theory, that means they could get cut worse. That’d never happen, right?

HB 3210 – This bill would raise cigarette taxes in hopes of generating about $190 million in new funding per year. Or it will make smokers buy their habit at a duty free shop instead of a convenience store. Or they’ll quit. That’s probably a smart decision too.

HB 3211 –  Once you’ve given up smoking, you’ll want to give up drinking low-point beer too. This bill nearly quadruples the state tax on watered-down suds. The fiscal impact statement estimates an increase of $46 million/year to the state.

HB 3212 – Again, we’re raising taxes through legislative action. Grover Norquist won’t be happy! This time, it’s a three-cent tax on each gallon of gas, and it goes away if the average price of a gallon in Oklahoma hits $3.00. Honestly, this is probably feasible. A lot of gas is bought here by people just passing through. To me, it’s similar to cities with a robust tourism industry taxing hotels. This could be another $41.5 million. That being said, the committee vote was 9-14. It’s dead. Or dead-ish.

Nothing is really ever dead at the Capitol. That’s why some of my friends and I are still watching for a phantom voucher bill.

HB 3213 – This is a really interesting one. When you click on the text of the measure, all you see is static language of a shell bill. Nothing happens. When you look at the bill summary for the committee substitute, it’s funkadelic:

Research Analysis

The committee substitute for HB3213 refers to a vote of the people numerous changes to the Oklahoma sale and use tax code. If approved, the measure would increase the state sales and use tax rate from 4.5 percent to 4.9 percent and expands the list of services and property subject to sales or use tax.

The list includes: water, sewage and refuse from a utility or public service company; computer programming, design and analysis services; repair, installation, delivery and maintenance services when provided in conjunction with the sale of tangible personal property; pet grooming services; landscaping services; storage of furs; marina services; carpet and upholstery cleaning services; laundry, diaper and dry cleaning services; swimming pool cleaning and maintenance services; exterminating and pest control services; tire recapping and retreading services; computer software that is electronically delivered; digital products; auto repair services; video programming services; leases and rental of aircraft; overnight trailer park rental; telephone answering services and welding services.

Revenue from the increased rate would be used to fund a teacher pay raise, which is authorized by a companion measure, HB3214. In the event that HB3214 is enacted into law and voters do not approve the changes proposed in HB3213, then the teacher pay raise would not be authorized.

The measure would also modify the apportionment of sales and use tax to various funds effective January 1, 2017 and each year thereafter.

Changes in Apportionment by Percentage:

-General Revenue Fund would decrease from 83.16 percent to 71.74 percent;

-Education Reform Revolving Fund would increase from 10.46 percent to 23.17 percent;

-Teachers’ Retirement System Dedicated Revenue Revolving Fund would decrease from 5.0 percent to 4.29 percent,

-Oklahoma Tourism Promotion Revolving Fund and Oklahoma Tourism Capitol Improvement Revolving Fund would decrease from .87 percent to .7475 percent.

-Oklahoma Historical Society Capital Improvement and Operations Revolving Fund wou;d decrease from .06 percent to .0525 percent.

Fiscal Analysis The measure is currently under review and impact information will be completed.

So the House is proposing a state question to compete with David Boren’s penny sales tax. How diabolical!

snidely whiplash.gif

We’re going to raise the state sales tax by four-tenths of a percent, and we’re going to tax your lawn guy and pool boy. Need new brakes? That’s a tax. Interesting move. I’m sure we’ll enjoy reading the actual bill when it appears too.

HB 3214 – As I wrote yesterday, this bill has no text online other than the static shell bill language. There are also no amendments, committee substitutes, or fiscal impact statements posted.

Supposedly, this bill will turn into the vehicle by which the House tries to fake giving us a raise by taking our Obamacare away from us. We can’t see that from here, but I trust people who know.

I also trust math. Supposedly, the Affordable Care Act (ACA) has driven up the rates of teacher health insurance. Below are the monthly premium costs for HealthChoice High since 2008. The first year that premiums would’ve been affected by ACA would be 2011.

Calendar Year  Monthly Premium  (FBA)  Dollar Increase Annual Percent Increase
2008 $364.24
2009 $409.12 $44.88 12.32%
2010 $442.80 $33.68 8.23%
2011 $449.48 $6.68 1.51%
2012 $449.48   – 0.00%
2013 $463.99 $14.51 3.23%
2014 $484.87 $20.88 4.50%
2015 $499.42 $14.55 3.00%
2016 $526.88 $27.46 5.50%

The truth is that insurance costs have been rising for decades. Obamacare doesn’t seem to have stopped it, but it doesn’t seem to have accelerated it either. If you love saying it and riling people up, that’s great. It’s also a distraction. It’s completely irrelevant to a discussion about teacher pay.

HB 3215 – This one really confuses me. The posted bill is a shell. No amendments, bill summaries, or committee substitutes have been posted. Yet Monday, the Joint Committee on Appropriations and Budget voted it down by a 16-18 vote. I don’t even know how that works.

HB 3216 – All shell. No amendments, summaries, fiscal impacts, or votes. Anything could happen here.

In summary, it’s not fair to say our Legislature hasn’t been doing anything. They’re sliding shells around the table and courting Constitutional challenge. They’re doing anything but admitting that their policies – their tax cuts – have had anything to do with the budget shortfall our state faces. It’s not all of them, but it seems to be a lot.

Somewhere in these bills, there’s a solution. It’s probably just hiding in plain sight.

  1. May 18, 2016 at 8:09 am

    When I saw the AP story posted on facebook yesterday I called Rep. Sears office to ask. His Legislative Assistant (LA) said flat out, no such bill was being heard yesterday. I asked her if she had any idea where such a story would have come from and she referred me to Public Affairs. I called three times before I spoke to someone who said that the AP reporter probably got it as background. I specifically asked the PA person if such a raise would have language tying it to a cap on insurance and he said he did not think so. Interesting.


  2. Misty Walker
    May 18, 2016 at 10:51 am

    You need to realize that many individuals in every field including myself are getting cuts in salaries and caps on insurance. I am a pharmacist and understand every aspect. Be thankful to have a job and insurance! It’s horrible what is going on, but enjoy and be thankful for what you have!


  1. May 18, 2016 at 7:52 pm
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