Not so routine: Board of Equalization funds OHLAP, but designates use of agency reserve

The Oklahoma Board of Equalization (BOE), chaired by Governor Mary Falllin, met today (Tuesday, December 20) to fulfill statutory requirements to give preliminary certification to general revenues available for appropriation during the 2012 Legislature. The seven-member panel fulfilled its required function at its regularly-scheduled gathering, but also unexpectedly boosted anticipated funds available for general appropriation by $6 million. 

Mid-way through the meeting, during what was expected to be a routine discussion as prelude to BOE approval of $63 million for “Oklahoma’s Promise” scholarships administered by the Higher Regents, Treasurer Ken Miller asked staff about the program reserve fund. That’s when members of the Board were told the reserve was about $15 million.

(The Office of State Finance later confirmed the precise figure is $14,530,300.85, a sum that should increase when additional dollars are transferred shortly.) 

The information provoked discussion and introspection among members of the board. Legal counsel for the state government confirmed the BOE could approve less than the $63 million requested, but fully fund the program request by specifying that some of the reserve could be used for the difference. 

Miller and others on the board made it clear they supported “full funding.” At the same time, Miller articulated a view, apparently shared by every member, that “a more rational reserve balance” seemed in order. It was clarified in discussion with staff and counsel that the reserve may only be used for scholarship awards, and not for other purposes. 

In the end, state Auditor & Inspector Gary Jones moved, and Treasurer Miller seconded, a motion to fulfill the $63 million request for funding of the higher education scholarships, directing $57 million from general revenue and the remaining $6 million from the OHLAP reserve. 

In a brief interview with CapitolBeatOK, Treasurer Miller confirmed he had focused on the reserve issue in “real time,” when he heard the response to his question about OHLAP’s reserve was that it amounted to nearly $15 million. 

After the BOE meeting, CapitolBeatOK asked Gov. Fallin if she would be asking the Legislature to look more closely at other agencies and programs with reserve funds or revolving accounts to see if additional savings for taxpayers might be possible. She replied, “Yes. We should look at all available cash and reserve pockets of money, perhaps funds were not aware of, that can be used to balance our budget.”

Fallin said she had begun raising questions with OSF staff to assure all available resources are understood by governing bodies like the BOE. In addressing a range of spending and tax reform issues with reporters, Fallin repeatedly indicated she was seeking both to fund “core services” and to support new income tax rate reductions. 

In addition to Fallin, Jones and Miller, members of the Board of Equalization include Lt. Gov. Todd Lamb, Attorney General Scott Pruitt, Superintendent of Public Instruction Janet Barresi and Cabinet Secretary of Agriculture Jim Reese. 

The board voted unanimously to fully fund the scholarship program, but to use $6 million of the reserve to reach the total requested. Other steps taken today, including certification of total state revenues available for appropriation, and other steps, also passed unanimously.

BOE meetings are normally routine matters of revenue estimates and other procedural steps, but Tuesday’s session was an exception to that rule, and perhaps a harbinger of future substance. 

Oklahoma’s Promise, the focus of this particular discussion, is a scholarship program that rewards high school students (and recipients continuing in college) who meet certain core requirements. 

The formal full name of the program is Oklahoma’s Promise – Oklahoma Higher Learning Access Program (OHLAP). Often the program is referenced in Capitol or agency parlance as “OHLAP.” Scholarship awards are administered by staff for the Higher Education Regents.

Sports fans have an old expression: “I went to a fight, and a hockey game broke out.” Capitol reporters and other government analysts might, after Tuesday’s Board of Equalization meeting, have a new expression to describe a much-less-boring-than-normal BOE session: “I went to a routine ceremonial meeting, and a public policy discussion broke out.”