Oklahoma Academy recommendations include tax reform, budget transparency and Medicaid Expansion

OKLAHOMA CITY – The Oklahoma Academy has released policy recommendations and ideas for the Sooner State’s government. The resulting report was condensed from views of involved citizens, expressed at a series of town hall meetings across Oklahoma in the latter part of 2015.
Recommendations from the organization include tax reform in a manner likely to result in tax increases, and concentration of limited government resources in priority areas.
The Academy’s chief operating officer also renewed calls to accept federal dollars for Medicaid expansion under the Affordable Care Act (ACA).
John Harper, chairman of the academy, pointed out that the group’s process focused on nine state agencies that together spent 91 percent of all state government appropriations.
Harper, a vice president for Public Service Company of Oklahoma, moderated the presentation, held at the state Capitol in the Blue Room last week.
Harper and Craig Knutson, a planning committee member, said the Academy was gratified with participation from 150 Oklahoman’s in the process of building the report, entitled, “Oklahoma priorities: The government & taxes we want.”
They expressed hope to involve more ethnic minorities and private sector representatives in the future. Their comments echoed a view stressed also by Julie Knutson, president and CEO of the Academy.
Regional meetings took place from August to December last year.
Mr. Knutson explained attendees were offered the opportunity to say how they might spend a theoretical $601 million surplus in state government funds, if it existed. He said, “A surprising number said they would put all of that money in a Rainy Day Fund.”
Oklahoma State University-Tulsa President Howard Barnett, a town hall co-chair, said attendees did more than focus on increased state spending. Participants called for more transparency in the budgeting process, traditionally under the direction of the governor and top leaders of the two chambers of the Legislature. Barnett also said attendees want more legislators involved in crafting the budgets.
Barnett also said there was agreement that the state needs to spend more money on education there was also “almost unanimity against David Boren’s proposal for 1 cent sales tax hike.” 
Among other policy proposals, the document advocates tax reform, including discussion of a statewide ad-valorem tax for state government financing, a tax on services, and a new levy on Internet sales.
According to a press release distributed to reporters at the Blue Room briefing on Wednesday (January 20), the organization’s consensus recommendations include:

The budgetary process should have a long-term focus, learning from and modeling other states that have already implemented these practices.
All internet based sales should be taxed accordingly and enforced vigorously.

The Legislature should adopt a form of the “Miller Plan” (State Treasurer Ken Miller’s proposal presented at one of the Town Hall sessions), consisting of annual budgeting and biennial policy sessions. 

Additionally, the Town Hall supports a more “modernized” tax code, including the need to lower rates and broaden properties in the approval of the new ad-valorem taxes.

In broad summary, participants encouraged concentration of state government tax resources on learning and training (education and workforce development), well being (health and human services), safety (justice/transport) and a few other areas.
Participating in the report’s official release was House Speaker Pro Tempor Lee Denney, R-Cushing, who commented she did not endorse every finding in the document. Still, Denney said she “appreciates the bi-partisan nature of the meetings, and I wish more people would get involved.”
At one point, Rep. Denney reflected candidly, “I sometimes wish I’d stepped out of the Legislature about a year ago, because this is going to be a tough year. … We need your prayers as well as your ideas.”
The state government is implementing across-the-board spending reductions in the last half of the current fiscal year, with additional cuts possible to meet the constitutional requirement of a balanced budget. Budget Committee members in both the House and Senate have said further reductions are possible if the state certifies a second “revenue failure.”
In Fiscal Year 2017, state tax revenue subject to appropriation is projected to fall at least $900 million below prior estimates.
In response to question from CapitolBeatOK about the Justice Reinvestment Initiative (JRI) – passed in 2012 but largely not implemented — Denney said corrections reform is an essential first step to “the mess we’ve got to find our way out of.” She said, “I think the executive branch is on board to finally get that implemented.” 
The Oklahoma Academy has long advocated broad reforms in criminal justice policy, along the lines former Speaker of the House Kris Steele fashioned during his tenure at the Capitol.
State Rep. George Young, D-Oklahoma City, pointed to his personal background in accounting, but told reporters that when he first took office after the 2014 election, “Looking at the OK state budget was like looking at something foreign.” The Academy’s town hall process, he said, helped his understanding.
Young served as a church pastor for 30 years, and reflected that on the budget, the Oklahoma Academy, “became a theological leader for me. … I moved into a deeper understanding. I wish every legislator could go through this process.”
Denney said tax credits and business incentives are “on the table” for possible reform. “There are 150 sales tax exemptions; So much money we’re giving away, we have to start capping some off-the-top-spending process.” As she pointed out, the Legislature “gets a shot at only 45 percent of the money that comes in. Some tough decisions will have to be made this year.”
In response to a reporter’s questions, Denney said, “I do not think a tax increase is in the cards this session.”
CapitolBeatOK asked if participants supporting using funds in Tobacco Settlement Endowment Trust (TSET) more broadly that at present, including perhaps disbursements to the Oklahoma Health Care Authority. Barnett said changes in TSET expenditures “came up a couple of times.” As for administrative efficiency in governance of public education, Barnett said the issue was “mentioned in the listening sessions.”
Mrs. Knutson said the report will be delivered to all members of the Legislature. The town hall regional chairs will be encouraged to ask the general public and “listening session” participants to communicate with legislators. She encouraged journalists to report her plea that citizens “become involved with your public officials.”
The academy leader also said participants in the academy process believe the state government should accept federal dollars to expand Medicaid or help finance Insure Oklahoma.
“The participants represented a broad socioeconomic, geographical, cultural and ideological spectrum, and the majority were not from state government. They were sincere and serious in the three days of deliberations, and the resulting consensus recommendations and findings report produced a guideline which can assist legislators in crafting future budgets,” said Mrs. Knutson. She also reiterated the 2015 “consensus recommendation” supporting Medicaid expansion.
The Academy’s Recommendations and Findings Report for 2016 are posted on The Oklahoma Academy’s website
Interested readers may contact Julie Knutson at 405-307-0986.
In organizational literature, the Oklahoma Academy is identified as “a private, 501c3 nonpartisan membership based organization that provides researched information on issues addressing the state.”

NOTE: Photographs accompany this story were provided by Terrance Craft of the Oklahoma Academy.