OKLAHOMA CITY — Revenues available for certification for the next appropriated state budget are trending flat but remain sufficient to trigger a personal income tax reduction in tax year 2016, according to projections approved Thursday.
The seven-member Board of Equalization on Thursday certified revenues Gov. Mary Fallin can use to build her FY 2016 executive budget proposal. Under state law, the governor must use the figure certified Thursday for the executive budget that will presented to the Legislature when it convenes Feb. 2.
The board also took action required under legislation enacted in April that will cause the state’s top personal income tax rate to drop from 5.25 percent to 5 percent beginning Jan. 1, 2016. The legislation authorized the income tax reduction if the FY 16 General Revenue Fund (GRF) estimate made by the board Thursday was equal to or greater than the FY 14 GRF estimate made by the board in February 2013. The FY 16 GRF estimate the board reviewed Thursday is $6,004,349,345, which is $60.7 million more than the FY 14 GRF estimate of $5,943,662,805 made in February 2013.
“Oklahomans are getting relief at the gas pump this year, and next year they’ll be getting more relief through a lower personal income tax,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger.
The board on Thursday approved an estimate of $6,914,776,463 in available revenue for the FY 2016 executive budget proposal. That amount is $43.3 million, or 0.6 percent, less than what was approved last December for the governor’s FY 15 executive budget, and $298.1 million, or 4.1 percent, less than the legislatively-approved FY 15 appropriated state budget of $7,212,855,361.
“There isn’t more money, but there is adequate money. We have a big enough pie and our job now is slicing it right to meet the needs of the day with the funds available,” Doerflinger said.
Despite the $298.1 million differential between FY 15 total appropriations and the preliminary FY 16 revenue estimate, revenues the board can certify as available for appropriations remain mostly flat. The estimate the board approved Thursday of revenue available for the FY 16 executive budget proposal is $25.6 million, or 0.3 percent, less than the $6,940,352,735 the board approved in February 2014 as available for FY 15 appropriations. However, the enacted FY 15 budget appropriated more than was certified by the board due to its use of $291.7 million in additional funds from various government accounts.
“As is the case most every session, revenues certified by the board do not represent all revenues available for appropriation,” Doerflinger said. “We were well-intentioned in using additional resources to meet needs last session, but next session we’ll have to rely more on cuts to most areas if we’re going to put additional resources anywhere else. We’ll have to prioritize and make tough choices.”
The board will meet again in late February to make a second estimate that will be used in negotiations between the governor and legislators to determine FY 16 appropriations levels for state agencies.
“As always, February’s certification matters way more than this December estimate,” Doerflinger said. “If oil prices continue sliding and the energy sector shrinks, there may be less revenue in February than there is today – we’ll see. In any event, the challenge is not insurmountable and we can and will manage it.”
Doerflinger is director of the Office of Management and Enterprise Services, which works with the Governor's Office to build the annual executive budget. OMES, in conjunction with the Oklahoma Tax Commission, prepares the revenue estimates that are presented to the Board of Equalization.
The packet the board reviewed Thursday can be accessed on the OMES website: http://www.ok.gov/OSF/documents/boe12182014.pdf
Thursday, December 18, 2014
Monday, December 8, 2014
In the last century, individuals in our state and every state in the Nation have felt the effects of an ever growing and increasingly powerful judiciary branch. Even during my tenure in the Oklahoma Legislature, I have seen numerous measures struck down in sweeping cases of judicial activism. What many people do not realize because of its convenient failure to be taught in the classroom is that the judicial system was never created to be a co-equal or independent branch having powers to legislate or execute law as it does today. The Federalist Papers were written by our founders to explain the intent of what was meant by the wording of everything we find in our Constitution. Federalist Paper #51 states, "the legislative authority necessarily predominate.” Federalist Paper #78 states, “The judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society; and can take no active resolution whatever. It may truly be said to have neither force nor will. . . . The judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution. . . . The judiciary is, beyond comparison, the weakest of the three departments of power. . . . and the general liberty of the people can never be endangered from that quarter. Not only was the Judiciary not created to be equal, but it was actually much weaker than the Legislative and Executive!
Every election cycle when our Supreme Court Justices are on the ballot for retention, I receive many complaints on the lack of transparency or information available on the Justices due to the state statutes here in Oklahoma. Our state is set up on what is commonly known as the “Missouri Plan” for our selection of Supreme Court Justices. The Missouri Plan provides for the appointment of the Justices by the Governor, then places them on a non-partisan retention ballot to allow the people to decide if they should remain as Justices. I believe the difficulties far outweigh the benefits of this system. Holding non-partisan elections often shroud the ability of the people to understand where the individuals stand on the issues. Pointed questions are not allowed. The amount of information of their records is nearly impossible to find for most people. Being as such, over 95% of retention ballots are retained. This process simply regurgitates the problems we are seeing.
Many things have been on a slow fade away from our Founding Fathers original intent in the 1700’s, but here in Oklahoma I look to help to reverse the course in a small way. This year I will be filing a measure to change our Supreme Court Justice selection process from an appointed one by our Governor to an elected one by the people. By designating districts by population much like our Congressional Districts, the people would elect a Supreme Court Justice for their district to a term in Oklahoma City. The Justices would then elect the Chief Justice from among themselves. Our Founding Fathers very much intended for the judicial process infused by the people and not to be appointed by bureaucrats. Enabling accountability by and from the people begins to make this branch of government realize the consequences, good or bad, of their decisions.
I realize and am not naive to that fact this is a very bold and new solution. The hill is long and the climb will be hard. However, my responsibility is to look into every solution to move our state in a positive direction. Big problems require bold solutions. I believe in this solution. Beginning the dialog this year will perhaps yield to the change this state needs to provide a more transparent and accountable government.
Please do not hesitate to give me your thoughts and ideas. That’s why I am here! You can email me at: Josh.Cockroft@OkHouse.gov, call me at: 405-557-7349, follow me on Facebook: Representative Josh Cockroft, Twitter: @VoteCockroft27, and my Website: www.FriendsofJoshCockroft.com.
Friday, November 21, 2014
Rep. Josh Cockroft
"An Open Letter to the Citizens of the State of Oklahoma,
The Oklahoma Supreme Court recently heard oral arguments in a lawsuit brought against Senate Bill 1246, which was passed by the Oklahoma Legislature and signed into law by Governor Mary Fallin in the 2014 legislative session.
That piece of legislation, now state law, was intended to reduce Oklahoma’s personal income tax rate if certain state tax collection targets are met. The lawsuit against the new statute is being aided by vocal opponents of income tax reductions.
According to those who filed the lawsuit, the new law violates provisions of State Question 640, originally approved by a majority of Oklahoma voters in 1992 with the goal of making it more difficult for state lawmakers to increase taxes paid by Oklahomans.
In 1992, state lawmakers’ ability to increase taxes and revenue needed to be restrained. The subsequent constitutional restraint requires that bills creating or increasing taxes, or making new revenue sources for the purpose of funding government, start in the state House of Representatives. Also, such bills cannot be passed in the final five days of the legislative session. As well, they must either be submitted to a vote of the people or receive three-fourths approval by both the state Senate and House of Representatives.
The lawsuit against the new tax reduction attempts to make the case that any bill related to taxes or revenue, whether it increases or decreases taxes paid by Oklahomans, is subject to the provisions of SQ 640. This interpretation violates the plain wording of the amendment and the intent of the voters.
Taxpaying Oklahomans should be alarmed by arguments made last month before the state Supreme Court justices regarding the intent of SQ 640. It was argued before the Court that, when the citizens voted in 1992 to make it more difficult for the state Legislature to increase their taxes, it was actually the intent of voters to make it more difficult to lower their taxes. Such an interpretation would mean SQ 640 applies to any bill dealing with revenue. This is a direct violation of the plain language of the statute in question and the clear intent of the voters. If a subsequent ruling by the Court reflects such rationale, this will have grave consequences on the ability of the Legislature in the future to provide relief to taxpayers.
If the state Supreme Court rules according to the lawsuit’s interpretation, there could be serious consequences. Minor or technical amendments to revenue-related statutes, bills lowering fees, and prior personal income tax cuts, business tax cuts, estate tax cuts, credits and deductions for seniors, and retiree and veteran tax relief could all be challenged and overturned.
It is even possible that dozens, if not hundreds, of past measures enacting tax relief or the expenditure of revenue could be immediately ruled null and void.
Such a ruling sets a precedent benefiting only those who want to undo such prior tax relief as the gross production tax compromise, also passed during the 2014 legislative session.
As well, any law passed in Oklahoma since 1992 that increased or decreased the amount of funds in the state Treasury could be immediately deemed unconstitutional if it failed to meet the standards of SQ 640. This could include state budget bills, which are routinely passed in the final days of session, jeopardizing funding for schools, public safety, transportation infrastructure and safety net services.
Tax-relief measures enacted in Oklahoma since SQ 640’s passage in 1992 that could potentially be ruled unconstitutional, should SB 1246 be struck down by the Court, would include:
- Reductions of the state’s personal income tax rate from 6.65 percent down to 5.25 percent; passed in 2005 and 2006.
- Manufacturing exemption against the state’s corporate income tax for distributors; passed in 2005.
- Prohibition of taxation on intangible personal property; sent to the voters for approval in 2012.
- Setting of the state’s gross production tax rate at 2 percent for all new oil and natural gas wells drilled in the state, for the first three years of a well’s production; passed in 2014.
- Repeal of Oklahoma’s estate tax; passed in 2005.
- Tax relief for all disabled military veterans filing personal income tax returns in Oklahoma; passed in 2005.
- Tying of the state’s standard deduction for taxpaying families to match the federal standard deduction; passed in 2006.
- Tax relief for all private-sector retirees filing personal income tax returns in Oklahoma; passed in 2006.
- Tax relief for all military veterans filing personal income tax returns in Oklahoma; passed in 2006.
Clearly, this was not the intent of Oklahoma voters when they approved SQ 640 in 1992. Such actions by the state Supreme Court would inflict unnecessary hardship on Oklahoma families, retirees, veterans, entrepreneurs and job-creators.
It is our sincere hope that the Oklahoma Supreme Court will use discretion and sound judgment and not rule in such fashion as to throw out two decades-worth of tax reductions for Oklahoma taxpayers. It is truly bizarre to imagine that Oklahoma voters desired in 1992 to make it more difficult than it had previously been for state lawmakers to take less of their money.
Since 1992, Oklahomans have benefited from numerous state-level tax reductions and suffered few state-level tax increases. SQ 640 has been a good protection against rapid escalation of state-level tax rates and unnecessary growth of state government. Our state and its people have benefited as a result.
Rep. Josh Cockroft"
Tuesday, November 11, 2014
In the news this past week was the headline stating the Regents for Oklahoma High Education have requested an additional $98.7 million in state appropriations for the next fiscal year. While their claim is the additional money is for necessary increases, I wonder if their request shows a lack of recognition of the priorities of our state budget and Oklahoma’s conservative majority.
Chancellor Glen Johnson cited Gov. Mary Fallin’s Complete College America Initiative as a justification of the large request. The goal of that initiative is to increase the number of career credentials and college degrees earned by 1,700 each year for 12 years. In the first year of the initiative, the goal was surpassed with an increase of 2,945 additional career credentials and college degrees. In the second year, there were 3,577 additional credentials and degrees. Of the $98.7 million increase, $88.3 million would be used in support of the initiative. Johnson also notes that the increase would bring funding back to pre-recession levels.
The request makes it very clear that Johnson and the Regents of Higher Education do not understand conservative governing principles. Higher education received cuts or flat budgets in past years, because it was flush with funding. The success of the initiative so far shows that they are neither underfunded nor in crisis. If this request is to be honored it would place overall funding for higher education in Oklahoma over $1.086 Billion. Meanwhile, state prisons and K-12 schools, which both rank higher on my priority list, do not have adequate funding or flexibility in their spending. Higher education has long been the sacred cow of state government. Past state legislatures poured money into it with very few tough questions or analysis of the results of that funding. We can not continue to blindly fund such a large portion of our budget. We must continue looking at our state budget in the same way we as families look at our household budgets. Responsibly.
When we get to work in the coming year on the Fiscal Year 2016 budget, I will be among those encouraging lawmakers to focus on common education, career technology schools and other critical needs in Oklahoma. I am no enemy of higher education and I certainly see the positives that our higher education system produces, but I also believe in living within the means. When so many other areas of our state budget are short and stretched thin I think a massive increase to an agency that is flush with funding would be irresponsible and foolish.
Tuesday, November 4, 2014
Elections are always a good indicator of how tuned in the people around you are to politics. There are always people who know a lot about what’s going on in the world and those who know less. Year after year though, it is very clear that almost no one knows much about their judges and justices. The most common question I am asked during each election season is my thoughts on the retention ballots. Many people become frustrated with the lack of information on the judicial candidates, which stems from an effort to keep the judicial system non-partisan. For these reason, many of my colleagues and I have discussed measures to increase judicial accountability. For me, there is no clear path to take with this topic, but it is worth discussing and looking into. Infusing transparency and openness into state government is always a worthwhile endeavor.
Senate Joint Resolution 21, a piece of legislation that failed to garner the necessary votes last year, would have introduced a reform to the state’s Judicial Nominating Commission. This 15-member commission nominates candidates to fill vacant judgeships across Oklahoma. The Governor then chooses judges from among their nominees. Six members of the commission are always attorneys and the rest are always non-lawyers. Currently, the six attorneys are elected to seats on the commission by members of the Oklahoma Bar Association. SJR 21 would have allowed the Speaker of the Oklahoma House of Representatives to appoint three of the attorneys and the Senate President Pro Tempore to appoint three members.
Opponents of the reform have criticized it as a partisan move similar to gerrymandering, basically that Republicans want to further increase their power by having a stronger hand in the nominating process. The simple truth though is that any change to election law is going to look like the majority party is making a power play no matter if it is by the Democrats or Republicans. Instead of responding to such cynical criticism, I am going to simply state the facts. The courts have made questionable judgements on legislation that would have a positive impact for most Oklahomans, but a negative impact on lawyers. The Oklahoma Bar Association’s strong part in the current process gives them a lot of impact on affecting those court decisions. Placing that power instead in the hands of elected officials, returns some of that power to the people.
Other reforms we have discussed include a constitutional amendment that would allow the governor, with the advice and consent of the Senate, to appoint the Supreme Court of Oklahoma’s chief justice. Another constitutional amendment would place 20-year term limits on state justices and appeals court judges. Yet another constitutional amendment would place an age limit on Oklahoma’s Supreme Court Judges. All of these measures would go to a vote of the people.
Oklahoma has a history of tinkering with its government system, a lot of which has led to improved accountability. Corruption has always been a problem in our state, so the people have time and time again tried to limit it with thoughtful reforms. These reforms are no different and I plan to continue to look into them in the upcoming session.
Tuesday, October 28, 2014
As the November election approaches, I like to do my part to remind everyone of the state questions that will be on the ballot. I have the benefit of already voting once for each of these questions since the legislature recommends each question before being sent to the public to vote on. Oklahoma has one of the largest state constitution's in the nation. In order to change policy, we often have to make constitutional changes. These policy changes require the direct input of Oklahomans.
The first state question on this year's ballot addresses military service while in public office. In the past, many officials have had to step down in order to serve our country. A vote of yes on State Question 789 will allow state legislators, agency commission and board members, statewide officials, judges, district attorneys and county officials to serve in state military services while in office. A vote of no will mean that officials continue to serve either in public office or a military role, but not both. This question began with a legal challenge and was passed as Senate Joint Resolution 33 by the legislature in 2013.
The other two state questions that will appear on the ballot concern homestead exemptions. State Question 770 asks voters to do decide whether or not to allow a homestead exemption for qualifying disabled veterans or their surviving spouse. State Question 771 asks voters to decide whether or not to create a homestead exemption for the surviving spouse of military men and women who die in the line of duty. Both of these questions were contained in House Bill 2621 passed by the legislature this past spring. Our veterans and their families have sacrificed and given so much to our country, these simple measures are the least we can do to say thank you. Oklahoma is currently the most friendly state for veterans and their families to live in. I pray this is a trend we continue in.
Past years' ballots have been stuffed full of state questions on various issues which can be confusing and controversial. This comes as a testimony to the legislature’s ability to work with the Governor’s office and each other and the large amount which has been accomplished through state questions to change our state constitution in the last decade. I think it is a nice change that they will focus exclusively this year on veterans' issues. I believe each of these three questions is worthy of a yes vote.
In other state news, lawmakers continue to conduct policy studies in October. House committees have studied fracking, school funding, agency revolving funds and state care for veterans and seniors. These studies help us to plan for next year's budget discussions and policy questions. Information on the studies can be found at: http://www.okhouse.gov/Committees/ShowInterimStudies.aspx. We also record audio from these meetings, which can be found at http://www.okhouse.gov/Video/Default.aspx. These meetings are also open to the public at the Capitol. We always welcome your participation in your government.
Thursday, October 23, 2014