OCPA Provides Roadmap to Austerity In State Budget

  OCPA is Oklahoma's premier conservative thinktank. Their research team compiled a far less painful roadmap for fiscal austerity and reforms. Here is their introduction..

​  With just over a week until the end of the regular legislative session, some lawmakers have proposed massive tax increases, including a plan to cap personal itemized deductions that would dramatically increase personal income taxes on many Oklahoma families and small businesses.

  OCPA released today a budget plan to fill Oklahoma’s $878 million budget gap and give teachers a pay raise—while respecting and protecting Oklahoma families and their own budgets.

  The balanced budget plan proposed by OCPA includes more than $1.3 billion in savings—including items from OCPA’s “Freedom Agenda” published in January and “First Steps” list released in February—and $337 million in tax increases, including an increase in the tax on gasoline and diesel, a 67-cent per pack cigarette tax increase, and a wind production tax. Together, the lower spending and increased taxes add up to nearly $1.7 billion.

  ​This budget plan would fully fund a $1,000 teacher pay raise for K-12 public school teachers as well as the elimination of personal income tax for classroom teachers. Base pay and income tax are the main reasons cited by teachers that leave Oklahoma for states like Texas.

- We highly recommend reading this short report at OCPA.  Download the PDF.

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OCPA PROPOSED LIST OF BUDGET REFORMS RECOMMENDATION SAVINGS

Non-Tax Increase Items: • Medicaid enrollment audits -- HB 1270 .................... • HealthChoice enrollment audits ............................... • HealthChoice select provider reform; capture savings, or equivalent amount, for General Revenue Fund .......... • 3-year moratorium on agency “swag,” advertising, memberships, sponsorships, and non-critical travel ............. • End zero emission tax credit effective for any new projects or turbines; effective July 1, 2017 .............................. • Cap zero emission tax credit liability payout at $12.5 million annually; effective July 1, 2017 ................................. • Cap ad valorem reimbursement for wind at $12.5 million annually; effective July 1, 2017 ..................................... • Repeal sales tax exemption on wind turbine sales; effective July 1, 2017 .............................................................. • Tobacco settlement reforms .................................................................................................................................. • Consolidation of administrative and back office functions of higher education, bringing noninstructional workers in Oklahoma’s public higher education system more in line with the national average (reduction of 33 percent) • Increase efficiency of underperforming professors ...................................................................................................... • Eliminate sales tax exemption for state government agencies; excluding PreK-12th Grade public education -- ( this  will require agencies to make the same cost benefit decisions as many non-profits and private sector business.) ... • Career Tech, utilize building funds, and recurring surpluses in reserve funds .......................................................... • Eliminate Hollywood Subsidy ..................................................................................................................................... • Eliminate cigarette sales and tobacco products sales rebate to tribal governments ................................................ • Annual CIRB Apportionment Reduction .................................................................................................................... • Surplus Cash Withdrawal from CIRB Fund .............................................................................................................. • Revolving funds ....................................................................................................................................................... • Rainy Day Fund ...................................................................................................................................................... • Set dedicated funding at the Actuarially Determined Contribution for the Teacher Retirement System at $300 million for FY 2018 only. • 3-Year moratorium on Rural Economic Action Plan ...................................................................................................... • 3-Year Delay in ROADS Fund Increase ............................................................................................................................. • 3-Year Moratorium On COGS Administrative Operational Grants .............................................................................. • 3-Year Moratorium On Tourism Country Advertising Grants ....................................................................................... • Convert Horse Racing Commission to Non-Appropriated Agency ............................................................................... • Convert Spaceport Authority to Non-Appropriated Agency ......................................................................................... • Convert OETA to Non-Appropriated Agency ................................................................................................................... • Convert JM Davis to Non-Appropriated Agency ............................................................................................................. • Consolidation of administrative and back office functions Oklahoma Conservation Commission reduce from 88 to 77 • Adjust horse racing gaming tax rate to Illinois Rate 34% .............................................................................................. • Increase exclusivity fee for Class III gaming to 10% ....................................................................................................... • Increased 1017 Fund deposits, due to increase of exclusivity fee for Class III gaming - 10% .................................. Total Non-Tax	$85.6 million $6.0 million $65.0 million $39.0 million $15.0 million $52.5 million $17.5 million $40.0 million $57.0 million   $124.5 million $182.3 million $95.0 million $3.0 million $5.0 million $60.0 million $30.0 million $102.7 million $50.0 million $150.0 million $15.0 million $9.6 million $50.0 million $0.2 million $0.7 million $1.7 million $0.3 million $2.8 million $0.2 million $0.8 million $10.3 million $10.4 million $76.9 million  $1,359.0 million
Increase items Tax Increase Items: • Gasoline/Diesel Tax ......................................................................................................................................................... • $0.67 Cigarette Tax Increase ........................................................................................................................................... • Wind Production Tax ........................................................................................................................................................ Total Tax Increase items	$219.7 million  $80.8 million  $36.6 million $337.1 million
Grand Total	$1,696.2 million

 For more information, visit www.ocpathink.org/budget-plan.

MEDICAID ENROLLMENT AUDITS -- HB 1270 Most states, including Oklahoma, have programs to prevent fraud by providers who are reimbursed by Medicaid. Many states, however, lack robust procedures to verify that Medicaid enrollees are and remain legally eligible. A number of states, including Illinois and Pennsylvania, have implemented Medicaid enrollment audits and eligibility verification efforts to remove Medicaid participants who are no longer eligible. If Oklahoma applies these reforms, the state’s share of the annual savings based on the experience of other states would be $85.6 million. $85.6 million Annual