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Capitol News Update     

 

November 19, 2012 

 

        With the election now in the rear view mirror, and our new legislature sworn in, decision time is getting closer for some of the top tier issues state government will be facing. There are few bigger than the decision whether to accept expanded Medicaid funding. The Affordable Care Act adds both new categories of people and new medical services to Medicaid. Accepting the funding will take large numbers of Oklahomans, primarily adults who are not now covered, off the rolls of the uninsured. It will provide mental health and addiction treatment for thousands who now rely on underfunded state programs.

 

        Given the politics of the Affordable Care Act in Oklahoma, it was probably a good call for Governor Fallin to postpone the decision to see if President Obama were going to get re-elected. At this point, as U.S. Speaker Boehner has said, the ACA is the law of the land. There is really no valid argument against accepting the expansion. Oklahoma struggles to fund healthcare services Oklahomans need, and we rank low in almost all categories of the health status of our citizens. The federal government pays 100% of the cost of the services for the first three years and no less than 90% after that. How many people wouldn't be glad to spend one dollar to get 10 dollars' worth of service? Better than that, the feds will take over payment for some healthcare services state funding is already paying for, thus saving state government money. Millions of additional healthcare dollars will also create a lot of new well-paying jobs.

 

       Some have argued that someday the federal government could increase the state's share of the cost. That's true, but it would take an act of Congress and a presidential signature. I would say the chances of that happening are somewhere between remote and nil. If anything, public sentiment is going in the opposite direction with the public expecting healthcare to become more rather than less universally available. Besides, why would anyone rationally refuse to accept years of funding on the outside chance they might not keep as good a deal sometime in the distant future?

 

       The only reason to turn the Medicaid expansion down would be the politics of it. It is true that Governor Fallin might catch some flak from some people. She might even draw a primary opponent. I'm no expert on Republican politics, but it seems to me she is popular enough to withstand such a challenge. The real political question is whether two years from now when she is running for re-election, will the ACA be popular or unpopular. I would bet it will be a lot more popular than it is today. I think if she turns it down, as saying goes, she'll find herself on the wrong side of history. Might as well do the right thing and provide more healthcare for Oklahomans.    

Ad valorem tax changes could have side effect

By M. Scott Carter

The Journal Record

OKLAHOMA CITY - Though Oklahoma voters soundly approved two state questions designed to limit ad valorem taxes on homeowners and businesses, the effect of those changes won't be known for a while.

But the end result could be costly.

Designed to limit future property tax assessment for homeowners, State Question 758 capped future property tax assessment at 3 percent. The cap was 5 percent. Now, under the Oklahoma Constitution, owner-occupied homes and agricultural land are limited to a 3-percent assessment cap.

However, in Oklahoma property taxes are used to pay for local government operations including schools, libraries and county health departments. And while experts agree that over time a homeowner's property tax would decrease - some say the impact statewide would be between $4 million and $6.5 million - the cap could actually spawn an unwanted side effect, an increase in millage rates for local bond issues, and could cause an increase in property taxes.

"We're very much in a wait-and-see mode," said Ryan Owens, general counsel for the Cooperative Council for Oklahoma School Administrators.

The effect of SQ 758 won't show itself for another year, Owens said, and even at that time, many administrators are unsure of what type of financial impact the measure will have.

"The estimate isn't current revenue," he said. "It's future revenue. I would just assume the number of dollars would continue to go down and schools will have to keep making cuts.

Owens said he hasn't seen any point in the past when the Oklahoma Legislature made up losses in the ad valorem fund it created.

"I don't see anywhere where it (any future funding lost) would be made up by the state," he said.

State Rep. Dennis Casey agreed. Casey, a Republican from Morrison, said he, too, wasn't sure how the state questions would alter school funding.

Casey said he was interested in knowing how districts or municipalities with bond issues on the books would be affected by the changes to the state constitution.

He questioned if any district would see an increase in taxes with the assessment cap going from 5 percent to 3 percent.

Yet Casey agreed that lost funds must be somehow replaced.

"I know the schools have been cut to the bone," Casey, a former public school administrator, said. "Somehow those funds have to be made up."

Ron Fisher, president of Steven McDonald and Associates, said the cap on assessments could create a situation where millage rates for schools and municipalities would increase.

"(A bond's) debt service is need-driven," Fisher said. "So if the public service portion goes down, then the other components have to make up the difference."

And that could include an increase in millage levels, he said.

Known as the amount per $1,000 that is used to calculate taxes on property, a millage rate is often used in personal property taxes. Millage rates are also used by school boards to calculate local school taxes to be collected. The rate is based on a formula that includes the total property value within a school district's boundaries.

When that value decreases - such as under SQ 766 - the millage rate could increase to cover the district's debt.

Under SQ 766 intangible property - that is, items such as patents, brand names and contracts - would be exempted from property taxes. Previously, Oklahoma law required intangible property taxes to be paid only by entities that are assessed by the state, such as public utilities and transportation entities.

But under a 2009 ruling by the Oklahoma Supreme Court, businesses, including those assessed at the county level, are required to pay the tax. Estimates put the loss of funds at about $50 million. That revenue was earmarked for local governments, including county health departments, libraries and public schools.

As an example, Fisher said a district that has its valuation cut in half would be forced to double millage rates on bond issues. He said if a district's valuation goes down, the amount of money available for public-funded entities such as a school decrease, too.

Still, like Casey and Owens, Fisher said the true effect of both state questions won't be felt until later.

"Right now about all we can do is wait and see and be conservative in growth estimates," he said.

Planned Parenthood seeks to stop funding cutoff

OKLAHOMA CITY (AP) - Planned Parenthood is asking a federal judge to prevent the Oklahoma Department of Health from terminating contracts at three Tulsa-area clinics that provide food and nutritional counseling to low-income mothers.

Planned Parenthood of the Heartland filed a motion on Tuesday for a preliminary injunction in its case against Oklahoma Health Commissioner Terry Cline.

Planned Parenthood filed a federal lawsuit against the department last week alleging that the state's decision to terminate its contracts was politically motivated retaliation for the organization's support of abortion rights.

Health Department spokeswoman Leslea Bennett-Webb declined to comment on the latest filing in the case, but health officials have said previously the decision to end the contracts was based in part on Planned Parenthood's cost per participant exceeding those of other clinics in the Tulsa area.

Fallin delays decision on Okla. insurance exchange

By Sean Murphy

Associated Press

OKLAHOMA CITY - Gov. Mary Fallin decided Friday to announce later whether Oklahoma will set up its own online health insurance exchange under the nation's federal health care law, leave the task to the federal government or share responsibility for the plan.

Fallin spokesman Alex Weintz said the governor opted to delay her decision after the federal government pushed back until Dec. 14 what had been a Friday deadline for states to decide how people can shop for coverage. States can set up their own exchanges, have federal workers set one up or operate an exchange in partnership with the federal government.

"Governor Fallin has decided to postpone an announcement on the future of health insurance exchanges in Oklahoma," Weintz said in a statement. "She will take advantage of the extension by continuing to study the issue and evaluate the state's options."

U.S. Health and Human Services Secretary Kathleen Sebelius notified members of the Republican Governors Association on Thursday that states have four more weeks to notify her office if they plan to operate a state exchange. Fallin attended the RGA meeting last week in Las Vegas.

"States have and will continue to be partners in implementing the health care law and we are committed to providing states with the flexibility, resources and time they need to deliver the benefits of the health care law to the American people," Sebelius wrote in a letter to Louisiana Gov. Bobby Jindal and Virginia Gov. Bob McDonnell, members of the RGA's executive committee.

The issue of complying with provisions of the federal health care law has been a politically difficult one for Fallin, who was forced last year to reject $54 million in federal funding to set up a state-run exchange after bitter opposition from grass-roots activists and conservative members of the Republican-controlled Legislature.

Oklahoma hospital officials, insurance companies and chamber groups are pushing Fallin to support a state exchange.

Constituencies bend Fallin's ear on health care

By Sean Murphy

Associated Press

OKLAHOMA CITY - Looming decisions for Gov. Mary Fallin on how Oklahoma will respond to the sweeping federal health care law are prompting an energetic, behind-the-scenes lobbying effort by hospitals, insurance companies, business and industry groups, and other constituencies that will be affected by provisions of the law.

Fallin is expected to announce within the next week her position on whether the state will move ahead with setting up a state-based online health insurance marketplace, or exchange, required under the law. Oklahoma policymakers also must decide whether the state will expand its Medicaid eligibility to provide coverage to thousands of low-income, uninsured citizens.

Fallin has yet to stake out a position on either proposal and faces a delicate political balancing act in a state where Republicans have bitterly resisted the requirements of the new federal health care law. On the one hand, hospital officials and chamber groups are pushing for both a state-based exchange and an expansion of Medicaid. But both of those ideas are fiercely opposed by tea party and other grass-roots activists who have been fighting implementation of the law since its passage in 2010.

"It's a real challenge for the governor because what it's done is put her right in between two major constituent groups inside the Republican Party," said Keith Gaddie, a professor of political science at the University of Oklahoma.

The Tulsa Metro Chamber, which represents more than 3,000 members, is among those lobbying the governor to support both a state-operated insurance exchange and an expansion of Medicaid.

"Certainly health care is one of the two largest employment sectors in Tulsa, so we're very cognizant of the jobs health care provides in our community," said Susan Harris, a senior vice president at the chamber who works on health policy. "Also, we need a healthy workforce. Healthy workers get better jobs, make more money and take care of themselves. It's better for the whole community if we've got a healthy workforce."

Fallin herself opposed the law when she was a member of Congress and even dangled a "Don't Tread on Me" flag before a tea party rally at the U.S. Capitol during the health care debate in 2010. Fallin and other Republican leaders initially hoped the U.S. Supreme Court would overturn the law, and when that didn't happen, she withheld a decision on whether to proceed until after the election, hoping Mitt Romney would be elected and either help overturn or the slow the implementation.

Oklahoma was among the states that sued over the law, and even after the Supreme Court's decision, Attorney General Scott Pruitt amended his lawsuit to challenge its implementation of the law.

"There is political risk in quitting resistance, but after you fail three times you really have to reassess whether or not you're going to prevail in this fight," Gaddie said. "At some point you just have to leave the battlefield and go home."

Fallin spokesman Alex Weintz said Friday the governor is still exploring the state's options as they relate to both the creation of a state exchange and the expansion of Medicaid.

"We feel like we have kept, as of right now, the doors open for the state of Oklahoma to pursue whatever we decide is the best option for our citizens," Weintz said. "We don't feel like anything has been ruled out, simply because of time restraints, at this time."

States initially had until Nov. 16 to provide federal officials with a blueprint for how the state-based exchange would work, but Health and Human Services Secretary Kathleen Sebelius said in a letter to governors Friday that they have another month, until mid-December, to submit detailed plans. Sebelius noted that she still wants to hear by the end of next week if states plan to set up a state exchange. States that don't will have a federal exchange operated for them.

Nearly 20 percent of Oklahoma citizens currently are uninsured, and an expansion of Medicaid to 133 percent of the federal poverty level would make an additional 180,000 adults eligible for Medicaid, according to the Oklahoma Hospital Association, one of the groups pushing Fallin to support the Medicaid expansion.

State health officials estimate such an expansion would result in more than $1.5 billion in federal funding to the state during the first three years when the federal government picks up the full cost of the expansion. The state's share would grow to 10 percent of the cost by 2020, which would amount to about $56 million, according to estimates from the Oklahoma Health Care Authority.

But those federal and state costs are why the Medicaid expansion is being opposed by conservative activists and Republican U.S. Sen. Tom Coburn, Oklahoma's junior senator, who has railed against increased federal spending.

"I do believe our state Medicaid's program can help Oklahomans who qualify for the program," Coburn wrote in a letter to Fallin last month urging her to reject the Medicaid expansion. "But at a time when our national debt is $16 trillion and Congress is running trillion-dollar annual deficits, it is unlikely that federal promises of stable Medicaid funding are anything more than a mirage."

Planned Parenthood sues Oklahoma over WIC funding

By Sean Murphy

Associated Press

OKLAHOMA CITY - A spokesman for Oklahoma Gov. Mary Fallin on Monday defended the state's decision to cut off federal funding for three Tulsa-area Planned Parenthood clinics in the wake of a lawsuit that alleges that the action was politically motivated retaliation for supporting abortion rights.

Planned Parenthood of the Heartland filed the federal lawsuit against the state's health commissioner Friday over its decision to terminate Women, Infants and Children, or WIC, contracts and the three facilities.

But Fallin spokesman Alex Weintz said the governor was not involved in the decision, which he said was based more on the cost-effectiveness of the clinics.

"(The Health Department's) explanation is that they found other service providers that can offer WIC services at more affordable rates, and the governor supports good stewardship of taxpayer dollars," Weintz said. "The question simmering below the surface is if this has anything to do with abortion, and the answer is 'no.'"

Planned Parenthood maintains that women and children who receive food and nutritional counseling at the three clinics will be irreparably harmed if the Oklahoma Department of Health pushes ahead with its decision to terminate the contracts at the end of the year. They maintain that they will be forced to lay off staff members and possibly close one of its health centers in the Tulsa area. This year, the three Planned Parenthood clinics received $454,000, combined, to provide WIC services.

Health Department spokeswoman Leslea Bennett-Webb declined to comment on the lawsuit Monday, but agency officials have said previously that the decision to terminate the contracts was based in part on Planned Parenthood's cost per participant exceeding those of other clinics in the Tulsa area and the uncertainty of future federal funding.

Revenue collections continue to climb

OKLAHOMA CITY - Oklahoma finance officials say solid revenue collections last month provide further evidence that the state's economy is continuing to improve.

Figures released on Tuesday by the Office of State Finance show collections to the state's general revenue fund in October totaled $439 million - nearly 10 percent more than the official estimate. Collections were also more than 7 percent higher than those from October of 2011.

The state's general revenue fund is the primary operating fund for state government.

October's figures show increases in all but one major category of tax collections - the exception being gross production taxes on natural gas, which was down nearly 85 percent from October 2011.

Overall corporate and individual income tax collections were up more than 22 percent from last year's collections.                           

Steele takes position with OKC-based nonprofit TEEM

By M. Scott Carter

The Journal Record

OKLAHOMA CITY - The outgoing speaker of the Oklahoma House of Representatives will join an Oklahoma City-based nonprofit as its executive director, officials with the organization announced Friday.

Kris Steele, the Shawnee Republican who has led the House for the past two legislative sessions, will join The Education and Employment Ministry as its executive director on Nov. 26.

Steele's tenure as House speaker ends Tuesday.

Tony Zahn, TEEM's current executive director, said Steele will oversee management of the agency as well as programming and operations.

"The vision and vitality that Kris brings to TEEM will ensure we can continue providing the services to meet the needs of our community for many years to come," Zahn said. "I look forward to working together with Kris in moving TEEM forward to a new level."

Jim Robertson, TEEM board chairman and CEO of Western Industries Corp., said he expected great things from Steele's leadership.

"We are fortunate to bring on Kris with his strategic vision for TEEM," Robertson said. "He will be an effective leader and will do great things for TEEM and the community we serve."

Steele said he accepted the position because he wanted to make a difference in the lives of others.

"I think the whole concept of equipping and training and educating people is a positive way to make a difference for generations to come," he said.

He said the position will give him the opportunity to implement his ideas quickly and directly.

"The differences between this agency and serving in the Legislature are profound," he said. "Here I'll have more freedom to implement ideas that I feel are worth exploring."

Steele, a 12-year veteran of the Oklahoma Legislature, said he and TEEM's leaders were still negotiating a salary and benefits package.

"It will be a nice compensation package," he said. "But the money isn't the reason I wanted to join TEEM. It's the opportunity to do something to help others."

Too often, he said, the Legislature doesn't recognize the big picture of an issue.

"I think there's value in being able to do some things quickly," he said. "Maybe it's the amount of time and energy it takes to communicate and sell an idea that makes it more of a challenge on the legislative level."

In addition to his new position, Steele said he would continue to be involved in the implementation of his Justice Reinvestment Initiative.

"I was asked to serve as a co-chairman with Oklahoma County District Attorney David Prater," he said. "That's my only other commitment, to serve on that board."

He said the position with TEEM would also allow him to continue to preach. Prior to his election as a state representative, Steele served as a Baptist minister and a public school teacher. He holds a bachelor's degree in religion from Oklahoma Baptist University.

"I really like the fact there is a faith-based component," he said. "With this, I'll get to go and preach at various points throughout the state. It affords me the opportunity to share TEEM's message."

Steele said he planned to spend the Thanksgiving holiday with his family and then focus on his new career.

"I plan on listening and learning," he said. "We have a weeklong orientation; then I'll get started. I just want to be able to educate myself, then identify the various opportunities within TEEM. It's an opportunity to do something to really help people. I'm excited. For some, running a nonprofit may not be glamorous, but for me it's the chance to doing something I truly believe in."

Founded in 1987, TEEM is an interfaith nonprofit organization with a mission to reduce poverty, homelessness and unemployment in Oklahoma. It provides free education, social services and job training and placement so students are able to become self-sufficient.

Have a good week.  Give me a call at 918.671.6860 if I can be of help in any way

                  Steve Lewis

 
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2012 DEADLINES
 
 




This Week's News
Ad Valorem Changes Could Have Side Effect
Planned Parenthood Seeks to Stop Funding Cutoff
Fallin Delays Decision
Constituencies Bend Fallin's Ear
Planned Parenthood Sues
Revenue Collections Climb
Steele Takes Position