Cockroft Column: Time To Revisit Fees, Budgeting Process

The Board of Equalization last week announced that the revenue triggers necessary to invoke a tax cut have been met. The Board of Equalization approved a motion Thursday to certify the income tax cut trigger provisions of Senate Bill 1246. SB 1246 requires a comparison between Fiscal Year 2016 estimated general revenue to the Fiscal Year 2014 certified general revenue total. Because projected FY 16 revenue is $60.7 million more than FY-14 revenues, the personal income tax rate will be reduced from 5.25 percent to 5 percent in tax year 2016. This comes as further proof that conservative policies continue to work for Oklahoma despite what the naysayers say.

The estimates approved by the board project revenues that could be enough to also trigger a deposit of almost $37.8 million in the state’s Rainy Day Fund. Despite this, the Legislature could face budgetary challenges as the projections approved today are 0.3 percent or $25.6 million less than what was certified for last year’s budget. The recent drop in oil prices, although beneficial at the pump, could continue to put pressure on state revenues. Lower prices in agricultural commodity markets will also be a challenge for lawmakers to overcome beginning in February.

Every year new challenges face lawmakers as we begin the budgeting process. The challenges of fluctuating federal monies, off the top spending, and aging infrastructures force legislators to find new ways to craft a budget. Three measures I am introducing this year will force us to focus on true state priorities while planning for the future.

When revenues are uncertain, agencies will turn to fees as a steady source of income. The danger in this is agencies justify the spending before the legislature without the general public even knowing about it. Fee increases are seldom a large increase, but can quickly add up and be passed without many people knowing about it. I have a solid resume in voting against fee increases during my tenure in the legislature. I will be introducing legislation which was run unsuccessfully in 2013 by then Speaker of the House TW Shannon to put a three year moratorium on fee increases; allowing the budgeting process to be transparent. If increases are needed, the people of the state should know about it before it’s passed, not when they get the bill.

Over half of our state revenue is generated from the federal government. We see that number shrink and fluctuate every year, yet we have no plan to deal with the uncertainty of the federal government. I will be filing two measures dealing with how our state reacts to the federal money it receives. One measure seeks to require state agencies to make contingency plans for 5 percent to 10 percent reductions in federal revenues for every year’s budget. Doing so would allow us to be prepared and ready should the funds not be available. The second measure would establish the Federal Funds Commission to study and make recommendations on federal funding in a state’s budget, assess risks of a significant loss of federal funding, and contingency plans for continued services from the state in the event of a reduction of federal assistance. The commission would have members appointed by the Speaker of the House, President of the Senate, and the Governor to meet and make the needed recommendations dealing with federal funds.

The state’s budget is the largest issue we as lawmakers deal with every year. Our state cannot afford to not look at every option to make the process easier, more efficient, smarter, and stream lined. I look forward to working through these measures with my colleagues over the next several months.

It is an honor to serve you. It matters not if you are Republican, Democrat, or Independent; I am here to serve you. Communication is important to me. I want to know how to I can better serve and lead for our district and our state. I am always a phone call away at: (405) 557-7349.

Revenue Estimate Approved, Income Tax Cut

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

Cockroft Column - The Time Is Now For Major Judicial Reform

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.