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Capitol News Update     

 

May 13, 2013


 

                 Speaker TW Shannon has championed a "pay-as-you-go" policy for the maintenance and repair of the state capitol and other state properties instead of borrowing the money with bonds.  The plan is to establish a commission to study and determine the capital needs of the state for repair and maintenance of its facilities.  This plan was part of resolving the three big issues that unclogged the legislative agenda and made way for passage of the FY-14 budget and adjournment.  To begin the pay-as-you-go process $60 million was appropriated for repairs for the state capitol with $30 million for other state facilities. 

 

                  To make the deal work Governor Fallin got the tax cut she wanted while the Senate gave up on its plan to offset the revenue loss by repealing some tax credits.  Instead, the tax cut was postponed for a year with the money going to the building repairs.  The Senate got passage of the workers' compensation plan that was its number one priority.  The House gave up on a number of amendments it wanted to make the bill more worker-friendly.  And the House got the pay-as-you-go plan with a $90 million down payment.   

   

                  I remember the days before the state was allowed to issue bonds obligating general revenue without a vote of the people.  Articles 25 of the Constitution says that in order to create a state debt a specific tax must be earmarked to pay the bonds, and the proposal must be voted on by the people.  The Supreme Court has, through the years, engaged in a legal fiction that if the bond says it does not obligate the full faith and credit of the state it is not a legal debt of the state and need not be voted on by the people.  The bonds are issued saying they are not an obligation of the state, but, of course failure to pay them would be devastating to the state's reputation.  Obviously bond holders believe that would never be allowed to happen.  

 

                  Before these "moral obligation" bonds were allowed, the legislature, when funds were available, would set aside a portion of growth money for capital expenditures.  In slow growth years it would be nothing.  In good growth years it might be quite a bit.  Capital expenditures was a good way to productively use surplus funds in high growth years without adding too much to operational costs that might not be sustainable.  When needs piled up, a bond proposal was put before the people.  This is probably the conservative philosophy the constitution envisions.  It is also the product of a time when borrowing was likely much less a part of the normal way of doing business.

 

                  What's really interesting about the 3-way deal is that all three parts of the deal will be staring at constitutional challenges with quite a bit of merit.  I would not be surprised to see none of them survive intact.  

Fallin signs workers' compensation overhaul

OKLAHOMA CITY (AP) - Gov. Mary Fallin has signed a bill to overhaul the state's workers' compensation system, a top priority for Republican legislative leaders who say the state's current system is a detriment to business and industry in the state.

Fallin signed the bill on Monday that changes Oklahoma's current court-based system to an administrative structure, saying it will dramatically reduce the costs to businesses.

The bill was fiercely opposed by Democrats, who complain that the cost savings come at the expense of injured workers, whose benefits are slashed as a result of the bill.

An analysis by the National Council on Compensation Insurance, suggests nearly all of the overhaul's savings - about $120 million annually - come from cutting disability payments.

Senate OKs measure for developmentally disabled

OKLAHOMA CITY (AP) - Any money saved by closing two state facilities for Oklahoma's most severely developmentally disabled residents would have to go toward providing services for the disabled under a measure approved by the state Senate.

The Senate voted unanimously on Monday for the resolution that requires the Department of Human Services to use any savings from the closure of the Southern Oklahoma Resource Center in Pauls Valley and the Northern Oklahoma Resource Center in Enid to provide services and programs for those with developmental disabilities.

The Oklahoma Commission for Human Services voted last year to close SORC by April 2014 and NORC by August 2015. The two facilities have a total of 231 residents who will be transitioned to community-based settings over the next two years.

Select agencies to benefit from budget deal

By M. Scott Carter  

The Journal Record 

OKLAHOMA CITY - Though the actual legislation is still working its way through the Oklahoma Legislature, the budget deal crafted by Republican Gov. Mary Fallin's office and the Legislature's GOP leadership will earmark more than $200 million in growth revenue to a handful of state agencies.

Funding for the rest of state government will pretty much stay flat for the next fiscal year.

About 51 percent of the state's $7.2 billion budget is earmarked for education. Of the remaining 49 percent, 31 percent is budgeted for health and human services, 6 percent for general government, 10 percent for public safety and 2 percent for natural resources.

During a press conference announcing the deal, Fallin called the budget conservative and said it holds the line on spending for most agencies.

"(It) continues to reinforce the idea that state government must operate more efficiently and effectively, not simply ask taxpayers to write a larger check," she said.

Education, health care and mental health services aren't the only agencies to see increases. Budget documents released by the Legislature show that the House, Senate and the jointly operated agency, the Legislative Service Bureau, will see a $7 million increase over last year's budget.

Under the agreement, the LSB will see a $5 million increase. The House and the Senate, each, will have an extra $1 million to spend.

Senate Appropriations Chairman Clark Jolley, R-Edmond, said some of that extra $7 million would be used to remodel the second floor of the state Capitol building, which was vacated two years ago, when the Oklahoma Supreme Court and its staff moved across the street to the court's new building.

"One of the things we believe that needs to happen is the $120 million that we're dedicating to the state Capitol next year needs to take precedence and priority for the crumbling infrastructure," he said, "fixing the broken sewer and the outside that's falling off."

The House and Senate, he said, would fund renovations on the second, third, fourth and fifth floors of the building for office space.

"We've got a tremendous amount of space that we need to put into use," he said, "and so rather than use the money that should go to the outside or the infrastructure, we're going ahead and showing that we're going to pay for the renovations."

In addition to office space, Martin said some of the funding increase earmarked for the Legislature could go for staff raises.

"Certainly operation dollars could be used for raises," he said, "but those are things that we will evaluate once the budget is passed - as far as the House goes."

Although funds for the Legislature will be listed in a single bill lawmakers are expected to vote on later this month, funding for the Capitol's repairs and refurbishment was included in legislation that lowered the state's income tax rate from 5.25 percent to 5 percent.

House Democrats said the budget hammered out by GOP leaders was woefully inadequate.

"Under the current state of affairs, with nearly $100 million lost, common education needed close to $100 million in new money just to stay level," House Democratic Leader Scott Inman, D-Del City, said. "Coming in with $74 million is a nice effort, but superintendents tell us that amount will force our schools to take a net cut come December of this year."

State lawmakers are expected to spend the next week moving budget bills through both houses of the Legislature. The Oklahoma Legislature must complete its work by 5 p.m. May 31.

House Democrats announce leadership

OKLAHOMA CITY (JR) - House Democrats have elected their leadership team for the 2015-2016 legislative session.

State Rep. Scott Inman, D-Del City, was re-elected by unanimous consent to serve his third term as Democratic leader.

Should the partisan makeup of the House change after the 2014 elections, state Rep. Jeannie McDaniel, D-Tulsa, will serve as House speaker pro tempore. McDaniel, currently serving her fifth term in the state House, was elected without opposition.

State Rep. Jerry McPeak, D-Warner, won re-election as caucus chairman. Also serving his fifth term in the House, McPeak was elected to serve his third consecutive term as caucus chairman.

House Democrats elected state Rep. Steve Kouplen, D-Beggs, to replace Rep. Joe Dorman, D-Rush Springs, as caucus vice chairman. Dorman is term-limited in 2014. Kouplen previously served as assistant floor leader.

House, Senate panels OK $7.1B budget bill

By Sean Murphy  

Associated Press  

OKLAHOMA CITY - A $7.1 billion general appropriations bill to fund state government for the upcoming fiscal year cleared its first legislative hurdles among rank-and-file legislators, easily passing House and Senate committees on Wednesday.

The measure, House Bill 2301, next will be considered by the full House and Senate and is expected to pass, despite opposition from Democrats and some Republicans that it didn't place enough of a priority on public safety entities.

Some members from both parties voiced concern that the budget included about $5 million for the House and Senate to renovate office space, but failed to include funding for pay raises for prison workers or state troopers.

"My concern is that the troopers and public safety is a core function of government," said state Rep. Sally Kern, R-Bethany, the lone Republican who opposed the bill in the House committee. "I think that should have been a higher priority."

The House and Senate each received a $1 million boost in their budget for operational costs, plus the Legislative Services Bureau received a $5 million appropriation to pay for renovating space on the second floor of the Capitol that was vacated when the Oklahoma Supreme Court and Court of Criminal Appeals moved to a new building.

House Appropriations Committee Chairman Rep. Scott Martin, R-Norman, said most of the nearly $270 million of new funding spent on the budget for the fiscal year that begins July 1 went to public education, health care and human services.

"I really think the budget does reflect the will of the body," Martin said. "I think we have created a fair, balanced budget that we can be proud of."

The bill passed the House committee on an 18-8 vote.

In the Senate, where the bill passed 16-6, two Republican opposed the measure, voicing concern that a $30 million fund set up to pay for renovations to state buildings could be used to complete work on the unfinished Native American Cultural Center and Museum in Oklahoma City. That project stalled after the Oklahoma Legislature declined to issue $40 million in bond funding to finish construction. Several legislators have been critical of the museum's total costs, which are estimated at $171 million.

Feds to OHCA: Change Insure Oklahoma or lose funding

By Scott M. Carter    

The Journal Record 

OKLAHOMA CITY - Oklahoma will have to change its Insure Oklahoma program if it wants to continue to receive federal funding, federal officials said this week.

In a letter written to the Oklahoma Health Care Authority, Cindy Mann, director of the Center for Medicare and Medicaid Services, said the implementation of the federal Affordable Care Act would mean that an extension of Insure Oklahoma would not be possible without changes to the program.

State health officials had requested a renewal of a waiver to use Medicaid funding to help some Oklahomans pay for private health insurance. The Insure Oklahoma program leverages federal Medicaid funds to provide insurance to more than 30,000 low-income Oklahomans.

In her letter, Mann said Oklahoma's program includes enrollment caps. However, those caps, she wrote, would not be allowed under the new ACA.

Mann also wrote that the center wanted to collaborate with Oklahoma officials to develop a workable system.

"Since Insure Oklahoma includes a premium assistance model, you might want to consider extending your model to insurance products available in the individual and small business insurance market," she wrote. "In addition to the statutory options available, we have also expressed an interest in working with a limited number of states on demonstrations testing this approach."

Mann's letter drew a terse response from Republican Gov. Mary Fallin. In a statement emailed to The Journal Record, Fallin criticized the call for new changes to the state program.

 "Insure Oklahoma is a program that has been providing affordable health insurance to approximately 30,000 low-income Oklahomans since 2005," Fallin wrote. "It is exactly the kind of successful, state-based solution to health care needs that the federal government should be encouraging. Unfortunately, the Obama administration seems intent on dismantling the program, as evidenced by the recent denial of Insure Oklahoma's Medicaid waiver. As a result, Insure Oklahoma will cease to exist at the end of this year and 30,000 Oklahomans will lose their current health care plans."

Over the course of the legislative session, Fallin said Oklahoma could not afford to expand its Medicaid program. However, in late April, two Republican lawmakers announced that they were working on a plan to expand and change the Insure Oklahoma program. Those changes, the Associated Press reported, could allow the waiver to be renewed.

Despite those efforts, Fallin wrote that the ACA had become a train wreck.

 "It is outrageous that President (Barack) Obama is actively dismantling the successful health care programs established by states in order to force citizens onto Obamacare health insurance plans," she wrote. "The president promised the American people, 'If you like your health insurance, you can keep it.' He has not kept his word. Thirty-thousand Oklahomans participating in Insure Oklahoma - and many more Americans across the country - are being forced off their health insurance plans."

In her letter, Mann said the center would welcome the opportunity to work with the state if Oklahoma officials were interested in developing a premium assistance program.

 "Should the state be interested in exploring the use of premium assistance for the new adult group under the Medicaid expansion, given Oklahoma's history of using Medicaid premium assistance to provide coverage options to Oklahomans, we would welcome working with you on such a model, consistent with our guidance," Mann wrote.

Fallin wrote that Oklahoma's program was under assault by the Obama administration.

 "The president also promised the nation's governors his administration would grant states the flexibility to pursue state-based solutions rather than one-size-fits-all policies," Fallin wrote. "Again, that has proven to be untrue, as Oklahoma and other states are now finding their programs and waivers under assault by the Obama administration. I encourage the president to keep his promises and reverse his decision to gut one of Oklahoma's most successful health initiatives."

Legislative leaders eye early adjournment

By Sean Murphy  

Associated Press  

OKLAHOMA CITY - With an agreement in place on a $7.1 billion state budget and the governor's signature already on several key legislative initiatives, Oklahoma lawmakers are beginning to suggest the 2013 legislative session might end early - a move that could save state taxpayers nearly $28,000 per day.

The Legislature is constitutionally required to adjourn by 5 p.m. on the last Friday in May - May 31 this year - but legislative leaders have suggested they could wrap up their work a week, or even two, before then.

"At this point in the session, with top legislative priorities on the governor's desk awaiting her signature and a tentative budget agreement reached, it's becoming more likely that the Legislature will be able to finish this session before the constitutional May 31st deadline," said Senate President Pro Tem Brian Bingman, R-Sapulpa. "And while it is still too early to know exactly when legislative business will conclude, we know each day the Legislature doesn't meet saves taxpayer resources. That's a goal we are continually working toward."

The House and Senate would realize significant savings, mostly in the form of travel reimbursements and per diem for members who live more than 50 miles from the Capitol. In the 101-member House, per diem and mileage reimbursement alone total more than $10,500 each day. The cost of salaries for session-only employees, a program for high school pages and the $60 daily fee for the House chaplain of the day bring the total daily cost of the House session to nearly $20,000 each day, according to information provided by the House comptroller.

In the 48-member Senate, the session costs about $7,600 each day. This includes about $5,200 for per diem and mileage reimbursement, $1,600 for hourly session employees, and about $800 for the page program, which covers lodging and stipends for about 10 pages each week.

Lawmakers earn a base salary of $38,400, although members in leadership positions earn more. The House speaker and Senate president pro tem get $56,332, and floor leaders and budget committee chairmen get $50,764.

Leaders in the Republican-controlled Legislature reached a broad agreement with Gov. Mary Fallin in late April on three major issues: an income tax cut, an overhaul of the workers' compensation system, and a plan to repair the Capitol and other state buildings. Those bills all have been given final legislative approval, and only the tax cut bill remains to be signed.

Then last week, Fallin and legislative leaders reached a deal on a $7.1 billion budget to fund various state agencies. That measure could be on Fallin's desk as early as next week.

"The major issues of the day are decided - tax cuts, workers' comp, Capitol infrastructure and the budget," said House Democratic leader Rep. Scott Inman, D-Del City. "Anything of importance that doesn't get addressed this year, under our rules can be taken up next session, in February, when we generally have a much lighter workload. I don't see a whole lot of reasons why we shouldn't be able to adjourn early and go back home to our families.

"When we gavel out, the people of Oklahoma can take a deep breath because they know they won't have to worry about too much meddling in their lives at that point."

Budget measure clears, but not without vote controversy

By M. Scott Carter   

The Journal Record  

OKLAHOMA CITY - A $7.1 billion budget package passed the Oklahoma House of Representatives on Thursday, but not before some members questioned the vote of a Catoosa representative who they said wasn't in the chamber, but voted for the bill.

House Democratic Leader Rep. Scott Inman, D-Del City, told the Associated Press that state Rep. Terry O'Donnell, R-Catoosa, had left the Capitol when two House votes were cast on the general appropriations bill. The measure, House Bill 2301, allocates $7.1 billion for the state's fiscal year 2014 budget. The measure cleared the House by  a 59-40 vote. In addition, two members were shown as absent. Records show that O'Donnell was listed as voting yes. It is a violation of House rules for a vote to be cast for any member who is not present in the House chamber.

State Rep. Richard Morrissette, D-Oklahoma City, said O'Donnell was not present in the chamber, but was listed as voting for the bill. Morrissette said he raised a question with the House's Republican leadership and asked for the full House to be called for a vote, but those requests were voted down.

"I asked the chair to have a call of the House to determine exactly what happened," Morrissette said. "Of course, they threw me under the bus. There was some monkey business going on in the back of the chamber and we needed to get to the bottom of it."

Telephone messages to O'Donnell's home and office were not returned.

Morrissette said he also requested the video from security cameras placed in the chamber.

"That would show that he wasn't in the chamber and it would also show who pushed his voting button," he said.

State Rep. Joe Dorman, D-Rush Springs, said standard procedure is to inform the House clerk of an absence.

"If the clerk is informed, he can lock that representative's vote so someone else can't vote for them," Dorman said. "The issue isn't if Rep. O'Donnell was there or not, it's who voted for him."

A spokesman for House Speaker T.W. Shannon, R-Lawton, told the AP they were looking into the situation.

Report: Oklahoma should expand insurance program

By Dan Holtmeyer  

Associated Press   

OKLAHOMA CITY - A consulting firm hired by Oklahoma to help answer the question of how to insure 200,000 people without health coverage told the state's Medicaid board Thursday that an existing program could be used to build a broader system by 2015.

Utah-based Leavitt Partners gave the Oklahoma Health Care Authority Board its preliminary report at Thursday's regular monthly board meeting. The full report isn't expected until June, but the firm's initial suggestions include streamlining Medicaid requirements and expanding the Insure Oklahoma program, which currently uses Medicaid and Oklahoma tax money to help about 30,000 people buy private insurance.

"The other piece is - based on the success of Insure Oklahoma, the nature of the program and how well-accepted it is in the community - that you use Insure Oklahoma as a framework to cover the rest of the uninsured," Leavitt senior analyst Michael Deily told the board at its meeting. "Now, there would likely need to be some revisions."

Those changes could include using home-based care models, incentives for preventive care and a removal of Insure Oklahoma's 35,000 enrollment cap, Deily said. The changes would be overseen by a steering committee of experts and politicians and could be in place by January 2014.

"This is a real opportunity to improve preventive care," Deily said.

Oklahoma Gov. Mary Fallin rejected $3.6 billion over seven years in new federal money to expand the state's Medicaid system last November, pushing the Health Care Authority to look into other ways to provide coverage to those people who cannot afford it. The authority hired Leavitt Partners for $500,000 to provide suggestions.

Thursday's recommendations were largely unsurprising. A small group of Oklahoma legislators have been eyeing the Insure Oklahoma program for weeks as an ideal starting point for a larger insurance plan. The suggestions also follow a similar proposal the Arkansas Legislature approved last month with the tentative blessing of the federal Centers for Medicare and Medicaid Services.

CMS had rejected the renewal of a waiver that sustains Insure Oklahoma earlier this year, apparently dooming it to end by January 2014. But in a letter to the Health Care Authority this week, CMS Director Cindy Mann said the rejection could change if some adjustments to Insure Oklahoma were made, such as throwing out the enrollment limit.

Because the consulting firm's broad suggestions include some of those changes, they could therefore unlock those billions of Medicaid dollars for Oklahoma to use in a politically acceptable way, help hundreds of thousands of Oklahomans get insurance and save Insure Oklahoma all at the same time - if CMS gives the go-ahead.

"If we made alterations, I think they would, and I think they expressed that in the letter," Health Care Authority Deputy CEO Cindy Roberts told reporters after Thursday's meeting. A CMS spokeswoman declined to comment on the plan because it wasn't yet specific enough.

Fallin and other Republicans, meanwhile, have blamed the federal government for squashing an Oklahoma program that works and haven't yet given their support to any proposal to change it. The bill's sponsors told The Associated Press on Wednesday they have little hope the plan will advance this year.

"It's up to the state now" to make the necessary changes, Roberts said. "Are we willing to?"

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

                  Steve Lewis

 
This Week's Meetings


 

2012 DEADLINES
 

This Week's News
Fallin Signs Workers' Comp
Senate OKs Measure for Developmentally Disabled
Agencies Benefit From Budget Deal
House Democrats Announce Leadership
Panels OK Budget Bill
Budget Measure Clears
Oklahoma Should Expand Insurance Program