FOR IMMEDIATE RELEASE
September 27, 2007
For more information contact:
David Blatt, Public Policy Director
Community Action Project
918.382.3228

OKLAHOMA CITY – If the fiscal policies of reducing revenue continue, state government will lack the resources necessary to properly fund vital programs on which Oklahomans rely. According to members of the Alliance for Oklahoma’s Future, dramatic funding cuts in state services such as education, public safety, and state pension programs are inevitable if further reductions in state revenue occur this coming legislative session.

“Because of recent decisions enacted by the Legislature, Oklahoma’s revenue growth has slowed dramatically and we are facing long term budget shortfalls,” said David Blatt, Alliance chairman. “Costs for the state’s existing programs are increasing faster than revenues and this situation will further put the squeeze on those priorities that matter most to Oklahomans.”

The Alliance was called today to speak to members of the House Revenue and Tax Committee regarding changes to Oklahoma’s tax structure. The Committee chair posed the question, “Should Oklahoma cut taxes and if so, which ones?”

“With a grossly underfunded education system, increasing poverty rates among Oklahoma’s children, crumbling roads and bridges, and a crowded prison system, we believe these are the wrong questions for the committee to be asking,” said Blatt. “First and foremost, we need to guarantee that we are meeting our goals as a state to achieve an adequate tax system that provides every Oklahoman opportunity, prosperity and security.”

The Alliance proposed the following recommendations to the Committee:

• Take a breather from further tax cuts;
• Evaluate the current tax structure’s capacity to adequately fund the state’s goals;
• Develop long-term budget forecasts;
• Modernize Oklahoma’s tax system;
• Maintain a balanced tax structure; and
• Preserve and ensure equity in the state income tax.

Further testimony by Elizabeth Hudgins, Senior Policy Analyst for the Center on Budget and Policy Priorities, a national nonpartisan policy research organization, pointed out that Oklahoma’s taxes are already among the lowest in the nation. “Oklahomans pay among the least in the country in state and local taxes, ranking 43rd nationwide,” said Hudgins. “Policymakers should consider their state’s goals and priorities and ensure a tax system that works for all Oklahomans.”

Labels: Budget, CAP, OK House

Posted at 7:16 AM |   

A new issue brief from Community Action Project (CAP) examines Oklahoma's new immigration bill, HB 1804, which is slated to take effect November 1st.

The brief offers a section-by-section analysis of the bill and explores how its provisions relate to current law and practice in such areas as public benefits, identity cards, employment and law enforcement. It is designed to assist public and private stakeholders in the immigration issue understand how the bill applies to them.

Among the issue brief's key findings:

Many sections of HB 1804 may either duplicate or mirror what is already in state or federal law or simply put into statute what is already occurring in practice in Oklahoma.

The bill does not challenge the constitutionally-guaranteed right of all children to attend school and receive all educational services, regardless of legal status.

While the bill requires verification of legal status for those applying for "public benefits", the established definition of public benefits in state and federal law is limited to certain well-defined government programs, which already are unavailable to unauthorized immigrants.

Read entire brief here.

Labels: CAP, Immigration Reform, Rep. Randy Terrill

Posted at 5:24 PM |   

Another doom and gloom economic forecast from the Community Action Project.


By David Blatt
Director of Public Policy, Community Action Project

Oklahoma enters a new fiscal year amidst signs that state revenue collections may be entering a slowdown. As legislators grapple to address new responsibilities, rising costs and unmet needs, this revenue slowdown sends a signal of budget challenges on the imminent horizon.

I. Revenue Trends

The most recent state fiscal year, FY ‘07, marked the fourth consecutive year of revenue growth in Oklahoma. General Revenue (GR) tax collections, which represent approximately 72% of all state tax revenues, increased by 4.2% in FY ‘07 compared to FY ‘06. Since emerging from the steep downturn of 2002-2004, GR has grown at a robust annual rate of 9.2%. Also for the fourth consecutive year, actual GR collections came in well above certified estimates, allowing for a substantial end-of-year deposit to the state’s Rainy Day Fund, which has now reached $571.6 million. Read more...

Labels: Budget, CAP

Posted at 11:53 AM |   

Community Action Project urges using proven fiscal tools over tax cuts to grow Oklahoma’s economy

Economic research shows that policymakers who want to grow Oklahoma’s economy should invest more in education, health and infrastructure rather than cut taxes, according to an issue brief released today by Community Action Project (CAP).

The issue brief according to CAP, is based on a thorough review of economic research, historical data and comparative studies with other states and nations. The brief considers a broad array of fiscal policy tools available to state policymakers for growing Oklahoma’s economy. It finds that public investment in education, health and infrastructure are the most effective ways to spur economic growth. Such investments stimulate the economy by lowering business costs and raising labor productivity.

“This brief clearly demonstrates that we can encourage stable, long-term economic growth in the state by investing in the priorities needed to support Oklahoma’s families, businesses and communities,” said David Blatt, Director of Public Policy for CAP, a Tulsa-area anti-poverty agency.

“Investing in public services helps those who run businesses that depend on a skilled workforce and functioning infrastructure. By helping to decrease significant business costs and improve the environment for revenue generation, Oklahoma policymakers can encourage business investment and entrepreneurial growth, significantly impacting Oklahoma’s economic growth rate.”

In contrast, the study finds that tax cuts are an extremely inefficient fiscal tool for achieving economic growth. In one study cited by the brief, researchers found that 96% of the revenue given up by a typical tax cut is wasted money, going to firms whose investment decisions were not affected by taxes.

“Research has found that public services, especially those dealing with education and infrastructure, are key determinants to business location and investment decisions,” said Jim Alexander, a policy analyst at CAP and the brief’s author.

“Likewise, policy that improves the health and the opportunity for greater educational attainment of all Oklahomans creates a more productive, better-skilled workforce that attracts businesses and high- skilled workers.”

Labels: Budget, CAP

Posted at 9:25 AM |   

Expanding access to health insurance for Oklahoma’s children would have significant, far-reaching impacts that benefit all Oklahomans, according to a new issue brief released today by Community Action Project, a Tulsa-area anti-poverty agency that conducts policy analysis on issue affecting low- and moderate-income Oklahomans.

The issue brief cites research that shows that children with health insurance are more likely to receive early, preventive health care, are less likely to visit emergency rooms or be hospitalized, are less likely to be absent from school, and are more likely to perform better academically.

The brief was released in conjunction with a press conference at the State Capitol urging the Legislature to support SB 424, a bi-partisan measure that would extend eligibility for publicly-subsidized health insurance to children in families with income between 185% and 300% of the federal poverty level.

Currently in Oklahoma, about 130,000 children, or 15 per cent, have no health insurance, the 6th highest rate in the nation. The moderate-income households targeted by SB 424 are a "gap population" that often experience the greatest obstacles to obtaining coverage, earning too much to qualify for Medicaid but too little to be offered or be able to afford family coverage through their employers.

Under the SCHIP program, the state would be eligible for an enhanced federal matching rate of $3.48 for every state dollar spent on health care costs for children between 185% and 300% of poverty.

Labels: CAP, OK Legislature

Posted at 10:05 AM |   

In a press release today, Tulsa based Community Action Project proposed raising taxes in Oklahoma's slowing economy. Click here for the issue brief titled: “Cutting Deep: New Projections of Sluggish Revenue Growth Suggest that Tax Cut Impact May Be Felt More Deeply and Quickly than Anticipated”

Full text of release:

Tulsa, OK: New Oklahoma budget projections show that tax cuts enacted in recent years are having a more immediate and dramatic impact on the state’s fiscal outlook than initially expected, according to a budget brief released today by Community Action Project, a Tulsa-area anti-poverty agency.

“We are now seeing that the tax cuts are running headlong into our ability to invest in the priorities needed to support Oklahoma families, businesses and communities,” said David Blatt, CAP’s Director of Public Policy and the brief’s author. “The trade-off for pushing ahead with further tax cuts may be felt directly by those who attend public schools and colleges, run a business that depends on a skilled workforce and functioning infrastructure, or need help with health care and social services.”

The new budget projections, certified in February by the State Equalization Board, see general revenue collections growing by just 1.5% during the current fiscal year and by a paltry 1.0% next year. This is well below the 25-year average of 5.4% annual growth in general revenue, and would mark the first time revenues have grown by less than 2% in a non-recessionary year.

“This study provides a wake-up call for what happens when the state slashes its tax base during an oil boom,” noted Alexander Holmes, OU Regents Professor of Economics and the former State Finance Director under Governor Henry Bellman. “We’ve been down this same road before, but it appears that we failed to learn the lesson that tax cuts in good times can have painful consequences in bad times”.

The issue brief shows that sluggish revenue collections are a direct result of the tax cuts passed over the past three legislative sessions. Tax cuts are estimated to have a revenue impact of over $560 million for the upcoming budget year. The vast majority of the tax cuts affected state personal income tax collections, which are projected to decline by 9% between state fiscal year 2006 and 2008.

These projected stagnant revenues come at a time when the state is already struggling to deal with billions of dollars in unfunded liabilities in the state teachers’ retirement system, as well as upholding commitments to raise teachers’ salaries, expand access to higher education, repair roads and bridges, and bolster the health care system.

“If revenues come in as projected by the State Board of Equalization in February, the state will be extremely hard-pressed to meet its funding obligations, especially since additional rounds of tax cuts are currently scheduled to take effect over the next three years”, said Blatt. “Given what we are now learning about the bleak budget picture ahead, legislators should take the opportunity to consider calling a time out.”

The brief also points to a serious flaw in the budget process itself, which fails to provide lawmakers with any long-term baseline budget forecast that could give them a framework for their decisions. Reforming the budget process to provide additional and more accurate forecasting could help lawmakers make more fiscally responsible and sustainable decisions.

“This report is an excellent addition to a small but important set of recent analyses warning of future difficulties for state government finance in Oklahoma,” commented Dr. Larkin Warner, OSU Regents Professor Emeritus of Economics. “The Governor and the Legislature owe it to the state's citizens to prepare long term projections of state revenues and demands for state services.”

Labels: Budget, CAP, OK Legislature

Posted at 7:39 AM |