Home > Uncategorized > Two Things: Not a Flat Budget; Please Vote

Two Things: Not a Flat Budget; Please Vote

May 31, 2016

1. I’ve been stumbling around, writing and scratching my thoughts on the state budget agreement for several days now. I have a draft that I’ll probably scrap centered around the show Whose Line Is It Anyway? It’s full of fun parallels between the show’s central premise and the sources of revenue around which the budget is framed.

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In this case, though, we should say that the sources of revenue are made up and the numbers don’t matter. Maybe, if the marginal well tax generates $120 million, as we have budgeted for it to do, we won’t have a revenue failure next year. Sure, it’s never generated more than $20 million, but that doesn’t mean we can’t believe. Maybe if we wish hard enough…

I just don’t want to do that right now. At the expense of my civility, I was working together quite the hilarious post. Instead, just let me be direct.

Speaking as a superintendent, here’s what I know:

  • Due to three state revenue failures (wait for it – there will be one in June), we spent considerably more money in the fiscal year that ends June 30 than we generated. Thus, we have eaten through much of our fund balance (carryover).
  • The systems that typically equalize funding differences among school districts also failed this year. In our case, this amounted to an additional loss of $1.5 million.
  • Next year’s “flat” budget starts at this year’s end point. In other words, the losses endured by districts this school year will be felt again next year. If districts don’t cut spending, they will again spend more than they receive. That can’t go on forever.
  • The budget was made flat, in part, as I referenced above, by counting on revenue sources that will never generate the funds that are in the official state budget. It was also aided by emptying the State Department of Education’s Activities Budget. This includes money for textbooks, alternative education, and the Reading Sufficiency Act, among other things. For Mid-Del, this is an additional loss of more than a million dollars.
  • I know I’m not the only superintendent who believes that the budget will hold until after elections. Then, and only then, will we face another revenue failure and more mid-year cuts.
  • Nothing about the forecast for our state’s economy tells me we’ll be dealing with anything better next year.

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2. The points may not matter, but your vote does. So does that of your representatives and senators. SB 1616 passed the Senate by a vote of 30-16. It passed the House by a vote of 52-45. All the Democrats voted no. Many Republicans joined them. For some, it was because the budget contained elements that resembled tax increases. For others, it failed to address the reasons our budget has collapsed in the first place.

Sen. Mike Mazzei was blunt about his disappointment:

I argued against the budget on the Senate floor and voted against it for the following reasons:

1. The budget is once again propped up by one time money sources and borrowed dollars totaling $620 million.
2. Borrowing $200 million to prop up state’s expenditures could lead to a credit rating downgrade.
3. We did not restore funding from the FY16 automatic cuts to k-12 education and education funding as a percentage of overall revenues since I have been a State Senator has now fallen from 36% to 27%.
4. In spite of numerous promises after last year’s budget, we did not give teachers a pay raise. Legislator pay ranks in the top 20 nationally while Oklahoma teacher pay has sunk to 49th.
5. Although we did pass several tax reform bills which I wrote to save $262.8 million, our finance reform efforts did not address the super expensive wind power tax credit which will cost the state nearly $100 million this next fiscal year.
6. Without a teacher pay raise, insufficient funding for k-12 schools and a whopping $90 million cut to higher education we provided no alternative to the tax payers for the November ballot question to increase the Oklahoma sales tax by 20%.
7. In spite of a lot of talk at the beginning of session, no $1 million plus state agencies were consolidated or eliminated.
8. Also discussed significantly at the beginning of session were necessary changes to the so called “off the top” money that is diverted to special projects. Much of this is state tax payer money that funnels back to the counties. We did a big $0 of this much needed reform.
9. When the budget agreement was announced on Tuesday, Senators were assured that the mega expensive wind tax credit cost would be reduced, but the Oklahoma House failed to fulfill that end of the negotiated bargain.
10. The very successful ROADS program which has grown over 200% since 2008 will still receive its automatic $60 million increase even though revenues are down approximately 12%.
11. To avoid another financial crisis next year, General Revenues will have to increase over 10% next year. There is simply not enough growth in our national or state economy at this point for even 3% revenue growth.
12. The Oklahoma House increased their expenditure amount by $1.8 million. Shocking!

An extraordinary financial mess requires extraordinary financial fixes. Half measures and borrowing money just doesn’t cut it. The Senate did not push hard enough for major financial reforms and fiscal prudence. Sadly, that which matters most, producing an ever increasing number of college and career ready graduates was short shrifted once again.

To his credit, Mazzei tried all session to get his fellow Republicans to roll back the most recent round of tax cuts. The benefit to the working class Oklahoman is negligible. The cost to state agencies is tremendous. As I keep saying, there’s nothing conservative about letting core state services crumble around you.

Senator David Holt, in comments to the Oklahoman was more succinct: 

“The thing that is disappointing to me the most this session is Oklahomans were paying attention to the priorities of this legislature more than in the six years I have been here,” Sen. David Holt, R-Oklahoma City, said. “But as that attention increased our focus on the budget seemed to actually get worse. We didn’t respond to that attention in the way that I think we should have.”

I can’t argue with that. We are definitely paying attention more than ever. And as a body, the Legislature failed to meet that challenge. The government as a whole did, in fact. The governor presented ideas. So did individuals in the House and the Senate. Whether it was a three-cent increase to the gas tax or a buck-fifty per pack of cigarettes, or – God forbid – accepting $900 million in federal funds to expand Medicare and stabilize one of the safety nets in place for Oklahoma’s most vulnerable citizens, we couldn’t come to any agreement. We didn’t make progress.

We rolled back tax credits for the poor, but we didn’t touch the hundreds of millions that we give to corporations that pay back nothing:

Some state lawmakers justified their decision to curtail a tax credit for the working poor by declaring that the state shouldn’t be subsidizing people who owe no income taxes in the first place.

But the state has several tax breaks on the books that do essentially the same thing for businesses. Through a combination of direct refunds, rebates and tax credit “transfers,” companies with no income tax liability are receiving cash subsidies.

In some cases, the state pays the money to them directly. In some cases, they get the cash by selling credits they can’t use to taxpayers who can use them.

You should read the entire Oklahoma Watch article. It’s infuriating.

Meanwhile, our schools, our prisons, our roads, our nursing homes, and our hospitals are in serious trouble. Our governor may be the co-chair of the Republican National Party’s platform committee, but our government is broken. Argue that point with me. I’m waiting.

All of this is a direct result of the people we elect. Register to vote (by June 3rd). Know your representatives and senators. Many of them face viable primary opponents, as well as November challengers.

Call them. Email them. They still want to hear from you. Let them know that no matter their intentions, the results are unacceptable.

Cut after cut, year after year, our children pay the price. Our whole state does.

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Everything is made up, and the numbers do matter. The budget numbers matter. The voter registration numbers matter. The votes in four weeks matter…but only if you do something about it.

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  1. June 1, 2016 at 7:31 am

    This line doesn’t seem correct at all… “or – God forbid – accepting $900 in federal funds to expand Medicare” Should it be $900mil?

    Like

    • June 1, 2016 at 7:50 am

      Thanks for catching that. I shouldn’t edit late at night 😁

      It’s been fixed now.

      Like

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