FY-2014 Proposed State Budget

OCPA BUDGETA STATE BUDGET THAT RESPECTS YOUR FAMILY BUDGET

Submitted by the

Oklahoma Council of Public Affairs, Inc.

To the Taxpayers of the State of Oklahoma

and Their Elected Officials

PROPOSED STATE BUDGETFOR THE FISCAL YEAR ENDING JUNE 30, 2014

About OCPA

The Oklahoma Council of Public Affairs (OCPA) is an

independent, nonprofit public policy organization—

a think tank—which formulates and promotes public

policy research and analysis consistent with the

principles of free enterprise and limited government.

Guarantee of Quality Scholarship

OCPA is committed to delivering the highest quality and most reliable research on policy issues.

OCPA guarantees that all original factual data are true and correct and that information attributed to

other sources is accurately represented. OCPA encourages rigorous critique of its research. If the accu-

racy of any material fact or reference to an independent source is questioned and brought to OCPA’s

attention with supporting evidence, OCPA will respond in writing. If an error exists, it will be noted in an

errata sheet that will accompany all subsequent distribution of the publication, which constitutes the

complete and final remedy under this guarantee.

Table of Contents

Budget Message ................................................................................................................................................ 1

Government-Wide Reforms .............................................................................................................................. 5

Summary of FY-2014 OCPA Budget ................................................................................................................ 8

FY-2014 OCPA Budget Recommendations

Education ............................................................................................................................................ 10

General Government ......................................................................................................................... 21

Public Health ....................................................................................................................................... 27

Human Services ................................................................................................................................. 32

Natural Resources .............................................................................................................................. 34

Public Safety ....................................................................................................................................... 44

Judiciary .............................................................................................................................................. 47

P R O P O S E D S TA T E B U D G E T F Y- 2 0 1 4 1

Budget Message

This tax burden is inappropriate for a free people.

Regardless of whether Oklahoma’s tax burden ranks

first or 50th in 50-state comparisons (and here’s hoping

we can one day get to 50th), the burden is too heavy.

Accordingly, this OCPA budget provides for an

across-the-board cut of the top personal income tax,

lowering the top personal income tax rate from 5.25

percent to 4.75 percent. This will provide much-

needed tax relief to the vast majority of Oklahoma tax-

payers without any arbitrary increases in taxes or tax-

able income for any Oklahoman.

According to Oklahoma’s Office of Management

and Enterprise Services, even in a year when per-

sonal income taxes were cut, state tax revenues grew

by $883 million and fees grew by $194 million over the

prior year for fiscal year (FY)-2012. The 0.25 percent

reduction in the personal income tax effective in 2012

was estimated to reduce state personal income tax

revenues by approximately $61 million for FY-2012.

So after much doom and gloom were predicted, the

forecast terror never materialized. According to

annual net collection data from the Oklahoma Tax

The Oklahoma Council of Public Affairs (OCPA)’s

proposed state budget this year focuses on fund-

ing core functions of government. This budget pro-

vides what many Oklahomans want and need: lower

taxes and a more efficient, effective government

which dedicates citizens’ hard-earned dollars to the

core functions of government.

In short, it’s a state budget that respects your family

budget.

Our friends on the left like to say Oklahoma is a

“low-tax state.” To which one must reply: By what stan-

dard? The late University of Oklahoma historian J.

Rufus Fears pointed out that “the American public

pays an amount of taxes that no despotic pharaoh in

antiquity would have ever dreamt of imposing upon

his people.”

The average Oklahoman was forced to work more

than three months last year before he was able to en-

joy the fruits of his own labor. In 2012, “Tax Freedom

Day” arrived on April 8—that’s the day the average

Oklahoman had finally earned enough money to be

able to pay the federal, state, and local tax collectors.

$18.00

$16.00

$14.00

$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

Total State Expenditures(expressed in billions of $)

9.6510.19 10.67 11.08

11.7312.92

14.1315.02

16.07 16.61 16.64 16.70

Source: Spending data are from the Oklahoma Office of Management and Enterprise Services, FY-2010, FY-2011, and FY-2012 Comprehensive

Annual Financial Reports, http://www.ok.gov/OSF/Comptroller/Financial_Reporting.html

Party inControl when

SpendingApproved

FY-2001 FY-2002 FY-2003 FY-2004 FY-2005 FY-2006 FY-2007 FY-2008 FY-2009 FY-2010 FY-2011 FY-2012

Governor R R R D D D D D D D D R

Senate D D D D D D D Tie Tie R R R

House D D D D D R R R R R R R

2 O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 4

Commission, state personal income tax collections

were $2,396,668,662 for FY-2011 and $2,692,968,300 for

FY-2012. This represents an increase of more than

$296 million. State sales tax collections were

$1,997,659,460 for FY-2011 and $2,190,600,218 for FY-

2012. This represents an increase of more than $192

million. In a year with the lowest top state personal in-

come tax rate (5.25 percent) since cuts began in FY-

2005, the state set the record for net state sales tax

collections and even managed to make a record de-

posit to the “Rainy Day Fund” in a year where state

personal income taxes had been cut.

With this growth in state revenue and with the in-

crease in federal payroll taxes, it is imperative that

personal income taxes are reduced in order to put

money back into the hands of Oklahoma’s private sec-

tor, thus spurring economic activity and even providing

some offsetting revenues for the state. But make no mis-

take: the goal is not to be “revenue neutral.”

Most cuts recently experienced by state agencies,

particularly any cuts to core services, are a direct re-

sult of the irresponsible spending spree of FY-1996 to

FY- 2002 (wherein state appropriations increased

more than $1.9 billion—or 49 percent) and the irre-

sponsible spending spree of FY-2004 to FY-2010

(wherein state appropriations increased more than

$2.1 billion—or 41 percent). Oklahoma’s professional

left, along with various tax users in Oklahoma, repeat-

edly dream of FY-2008 and FY-2009, when state tax rev-

enues were at all-time highs, in part driven by a false

economy based on a government-inflated housing

market and ballooning federal spending. Those that

dream of “pre-downturn” years fail to acknowledge

that in the boom years appropriations to higher edu-

cation and other entities were driven by Senate politi-

cal leaders’ demands that for every dollar in tax cuts

they wanted a dollar increase in spending. Budgets

determined by this sort of hostage-holding of taxpay-

ers are hardly a standard for future budget and rev-

enue determinations.

This OCPA budget removes non-core government

spending, focusing it on core services and setting it at

a level more appropriate for a state with Oklahoma’s

level of capital, job creation, and population.

This budget demonstrates that personal income

taxes can be cut without arbitrary increases in taxable

income (born of a desire to be “revenue neutral”) and

also demonstrates that considered core functions can

be funded by government. It’s clear that there is more

than enough money for the state budget. Now is the time

to show some concern for Oklahomans’ family budgets.

The 9 R’s of Fiscal ResponsibilityWhat is the core mission of government? This, of

course, “is the debate at the heart of government bud-

geting,” says the John Locke Foundation (JLF), a free-

market think tank in North Carolina. “What should

government do? What does the constitution allow it to

do? What does it do well? What can it reasonably

hand off to other sectors of society?”

Government is like Microsoft before broadband,

handing down a proprietary operating system (law)

for everyone with little ability to fix bad lines of code. It

assumes that a few people running “government-

modified organizations (GMOs)” can make better de-

cisions than the natural, organic interaction of millions

of service users and providers. This setup results in,

among other things, a Medicaid program that pro-

vides less health care than promised, schools that

graduate half of African-American males, colleges

and universities that graduate less than a quarter of

their students in four years, and targeted tax incen-

tives that fail to create or keep jobs.

How did Oklahoma manage to pile up $16.7 billion

worth of annual government and $11.5 billion in gov-

ernment retirement liabilities? “In good times, I do

think that it’s true that government is subject to ‘mis-

sion creep,’” former state treasurer Scott Meacham

once observed. “When the revenue is flowing maybe

there’s a trend to drift into areas that are outside of the

core mission or missions of government. What hap-

pens when things are going well is that things that are

‘nice to do’ become new programs, but in hard times

or tight times, it’s time to look at maybe pruning the

tree of government.”

Oklahoma, with 3.81 million people and a Gross

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 4 3

Domestic Product of $154 billion, is too complex for

149 legislators and several thousand bureaucrats to

manage.

Oklahoma has a vibrant private sector, and it

makes more sense, as JLF points out, to leave more

activities in the hands of “individuals and companies

who can be contractually bound to produce results,

instead of spelling out the methods to state employees

and allowing them to choose the results they will

achieve.”

Government exists to secure our rights to life, lib-

erty, and property. It does not exist to own and operate

a third-rate motel chain, to bribe poor women to leave

the fathers of their children, to give people food

stamps with which to buy cigarettes, or to provide em-

ployment for termed-out state legislators. If

policymakers focus on providing core services, gov-

ernment can be smaller and taxes can be lower. In

crafting a state budget, the analysts at JLF have devel-

oped what they call the “9 R’s of Fiscal Responsibility”

(reprinted below, adapted for Oklahoma).

Reform Entitlement Programs. State programs to

provide cash assistance, medical care, or other ser-

vices to the disadvantaged exist to provide a basic

“safety net.” Even philosophers of limited government

have justified such programs as needed to ensure or-

der and protect public assets and spaces. But these

programs must be carefully structured to minimize

dependency and encourage personal responsibility.

When the state pays nursing home bills for the parents

of the middle class, subsidizes the daycare expenses

of affluent families, and perpetuates social patholo-

gies such as out-of-wedlock births, it strays far from its

constitutional moorings. One of the biggest contribu-

tors to Oklahoma’s budgetary problems is rapid

growth in the state’s Medicaid program. The nature of

this program leads to lawmakers expanding Medic-

aid programs (such as the Advantage Waiver pro-

gram) to provide new entitlements (and create new

dependents) in good and bad economic times. Ac-

cording to the state’s FY 2012 Comprehensive Annual

Financial Report, total state spending on social ser-

vices has grown from $1.59 billion in FY- 2005 to $2.09

billion in FY-2012—an increase of 31.4 percent in

seven years. Over the next few years the state is going

to make significant appropriation increases to the De-

partment of Human Services. And yet total state

spending on health services has already grown from

$3.14 billion in FY-2005 to $5.44 billion in FY-2012—an

increase of 72.9 percent in seven years.

Require More User Responsibility. It is inappropri-

ate to require those who provide core state services,

such as law enforcement or education, to cover a sig-

nificant share of the cost of those services. But for

many other state agencies, their programs or services

are not constitutional entitlements or responsibilities.

If the state is to continue its involvement in these enter-

prises, it would be appropriate to ask those who ben-

efit to shoulder more of the responsibility of paying for

them. Services for which this budget recommends addi-

tional user responsibility include state museums, historic

sites, parks, costs of regulation for particular industries,

and other non-core functions of government.

Redirect Spending to Higher-Priority Uses. Ac-

cording to Article II, Section 2 of the Constitution of

Oklahoma, “All persons have the inherent right to life,

liberty, the pursuit of happiness, and the enjoyment of

the gains of their own industry.” Thus, it is incumbent

upon Oklahoma politicians, when formulating tax and

budget policies, to secure the people’s right to enjoy

“the gains of their own industry.” The state is obligated

to perform its basic functions efficiently while leaving

to the people as much of their hard-earned money as

possible. During a time in which policymakers find it

difficult to fund obligations already in place, it makes

little sense to incur new ones. Another way to apply

this principle is to sort out which expenditures within a

given department or agency are central to the core

mission and which are not.

Reorganize State Government. Even assuming

that current fiscal obligations could continue into the

next year, there remain different ways of organizing


the departments that carry them out. There is unnec-

essary duplication of core functions throughout Okla-

homa state government. In short, there are more effi-

cient methods of organizing the various departments.

For example, the Oklahoma Scenic Rivers Commis-

sion provides mainly tourism- and recreation-related

activities by its offering of trails or canoe rides in the

Illinois River, yet is a stand-alone agency from the

Oklahoma Tourism Department. Following on the

heels of recent consolidations, policymakers should

continue to reorganize state government.

Revive Free Enterprise. Responding to Oklahoma’s

economic challenges, some policymakers have con-

cluded that state government should take a more ac-

tive role in attracting investment and guiding develop-

ment through additional tax credits, cash subsidies,

and other incentive programs. This is a mistake. The

available public policy research on state economic

development does suggest that overall tax rates, es-

pecially the marginal rates on individual and corpo-

rate income, do have a measurable impact on state

economic growth rates. By focusing on eliminating

non-core spending, this budget puts more than $134

million (for FY-2014) back in the hands of taxpaying

Oklahomans to invest and spend as they choose.

Restore Civil Society. Nonprofits and charities form

a “third” or “independent” sector that delivers impor-

tant services and benefits that neither governments

nor profit-seeking businesses can deliver as effec-

tively. The state should be careful not to supplant

these institutions of civil society.

Remove Advocacy, Waste, and Race-Based Pro-

grams. Laws and programs that invoke racial or eth-

nic discrimination violate a basic principle of moral

government. All such programs should be ended im-

mediately—especially given that Oklahomans went to

the polls in November 2012 and approved State Ques-

tion 759, which banned affirmative action programs in

the state. Similarly, state funds should not be used to

subsidize groups that advocate policies or ideas be-

fore government bodies. Taxpayers should not be

forced to pay for the propagation of ideas with which

they may disagree. For example, state law requires

the state to administer and process payroll deduc-

tions for purposes unrelated to employment benefits.

This must end. Government is instituted solely for the

good of the whole, not for special interest groups that

use taxpayer money to advance their agendas.

Reshape the State-Local Government Relation-

ship. Local control of local revenues should be a cen-

tral theme whenever possible in the relationship be-

tween state and local government. The diverse demo-

graphic nature of our state leads to problems in local

applications of some state programs.

Reduce Biases in the Tax Code. Like most states,

Oklahoma has developed its state personal income

tax code in a piecemeal fashion rather than using tax

reform principles to build a coherent and efficient sys-

tem. This budget provides the spending discipline that

will allow for reductions in individual taxes for every-

one, thus reducing the need for these individually tai-

lored tax breaks.


Government-Wide Reforms

over-pay for benefits can be compared to all (and then

some) 61,755 taxpayers and their families (at this income

level) that are deprived of their hard-earned income.

Savings FY-2014: $37.8 million (half a fiscal year)

Savings FY-2015 and thereafter: $75.6 million

(annually)

Telecommunications Efficiency Audits. Policy-

makers should require audits of state telecommunica-

tions and data communications utilization. Indepen-

dent IT efficiency firms, for a flat fee or on a contin-

gency basis, can be employed as a negotiator and

reviewer of charges from telecommunications and

data communications companies used by state agen-

cies. Highly successful Oklahoma companies have

used these firms and seen significant savings. Some

private-sector companies have reduced from 25 to 50

percent the amount spent annually on telecommuni-

cations and data communications.

Savings FY-2014 and thereafter:

$3 million (annually)

Mandatory Performance Evaluations and Hiring

Reform. Policymakers should require all state agen-

cies to implement and use rigorous semi-annual per-

formance evaluations for employees. These evalua-

tions would include private-sector-like evaluations of

employee computer and Internet time management,

benchmarks and requirements for employee output to

hours worked, performance and incentive pay for

work that leads to the reduction of full-time equivalent

employees (FTEs), and so on. Agencies would then be

able to make retention decisions based on the results

of these initiatives. Some agencies have started these

evaluations and discovered startling information

about the low workload and low output of some of their

employees. In some agencies, more than 6 percent of

the FTEs were grossly underperforming their required

duties, and contributed little to the completion of tasks

at the agency. These evaluations have allowed agen-

cies to reward and reassign duties to performing em-

ployees, and separate non-performing employees,

thus saving hundreds of thousands of dollars in em-

ployee expenses.

State Employee Health Insurance Reform.

Policymakers should fully implement the reforms of SB

2052, which was passed by the legislature in 2010 but

vetoed by former Governor Brad Henry. The reforms

include consolidation of duplicative administrative

functions of the state Employee Benefits Council (EBC)

and the Oklahoma State and Education Employees

Group Insurance Board (OSEEGIB) (both are now

consolidated into the Office of Management and En-

terprise Services), which is estimated to result in an

administrative savings of $2 million to $3 million annu-

ally. Non-appropriated revenue of OSEEGIB and EBC

is derived from state appropriations for health-benefit

payments for employees, so any spending reductions

at EBC and OSEEGIB equals savings for state-appro-

priated agencies. Other features of the reform include

implementation of a “winner take all” competitive bid-

ding process for health maintenance organization

(HMO) benefits that are offered by the state to employ-

ees (this is how most private-sector firms choose

health insurance products). This reform, coupled with

the stabilization of the benefit allowance for state em-

ployees, would result in savings of more than $75 mil-

lion annually.

In addition, the state should reform the OSEEGIB

HealthChoice plan so that the insurance offering for

state employees is a Health Savings Account plan.

With the current generous benefit allowance (which

pays well over the costs of health benefits) and imple-

mentation of health insurance incentive reforms, all

state employees can be converted to Health Savings

Accounts without a reduction in the quality of health

benefits available to state employees. As a final part

of this reform, the state needs to evaluate the cost of

continuing to operate its own self-insured plan

(HealthChoice), compared to available private health

insurance options. If significant long-term savings can

be achieved without impacting core health care options

for employees, the state should consider this option.

According to the Oklahoma Tax Commission for 2013

there will be 61,755 tax returns (federal adjusted gross

income of $45,000-$49,999), with an average Oklahoma

personal income tax liability of $981. Based on this, the

amount of money given (annually) by lawmakers to


It is time to reduce FTE authorizations. Many deci-

sions were made during the 2011 legislative session to

adjust to reduced appropriations. As with most orga-

nizations, when cuts are necessary, this will result in

reduced FTEs. Every agency that has experienced

FTE reductions to accommodate available revenue

should have its agency FTE authorization reduced to

its current FTE level, the new lower level as a result of

previous spending reduction, or reductions in the 2013

session, whichever is lower. Further, to add much-

needed accountability to the hiring process, all state-

appropriated agencies should be required to notify

the Office of State Finance, Division of Personnel Man-

agement, and the Governor’s office before any new

hires are made. Once the agency has provided a de-

tailed notification and justification for filling the posi-

tion, the Governor’s office or the Division of Personnel

Management will have 30 days to approve or disap-

prove the new hire. This will prevent future growth in

personnel expenses without careful consideration

and approval of the Legislature and the Governor.

Savings FY-2014: $5.4 million (half a fiscal year)

Savings FY-2015: $23.4 million

Savings FY-2016: $41.4 million

Continued Retirement Reform. Policymakers en-

acted significant retirement reforms in 2011, but the

work is not done. During the 2013 session, the legisla-

ture should implement a defined-contribution (DC)

plan (effective July 1, 2012) for all new state [Oklahoma

Public Employees Retirement System (OPERS)-eli-

gible] employees.

Adhering to the first rule of holes (“when you’re in

one, stop digging”), this plan stops the practice of

adding new liabilities for new employees. The plan

would pay 4 percent of annual salary immediately, in-

creasing to 7 percent of annual salary after 4 years of

service. [The state would contribute 4 percent of sal-

ary to the employee’s 401(k) beginning when the em-

ployee is hired.]

The plan would take the difference between the

new DC plan contribution and the old DB (defined-

benefit) plan contribution and inject it into the system,

using it to pay down the debt over time.

Based on independent actuarial evaluations, this

plan would allow for complete elimination of the over

$1.6 billion in unfunded liability for OPERS over a pe-

riod of time (worst case scenario 38 years, best case

12 years), cap immediately the liability exposure to

new hires, and allow for a more modern compensa-

tion package.

As a part of retirement reform, it is time to consoli-

date the five separate boards that govern the six ac-

tive defined-benefit retirement plans operated by the

state. Given the similar nature of the governance and

fiduciary responsibilities of public retirement systems,

economies of scale can be achieved by consolidating

governance. For example, a major function of a board

of a retirement system is to employ fund managers to

responsibly and successfully invest the funds of the

system that pays benefits to beneficiaries. By consoli-

dating, fees charged by fund managers can be re-

duced because of the larger pooling of decision mak-

ing — all while keeping the individual funds intact and

separate. Also, with combined governance, duplica-

tions that exist in agencies can be reduced to yield

savings for the system so that operational improve-

ments can be more actively pursued.

As with a number of issues facing government, the

status quo is tempting and has a solidified constitu-

ency. The problem is that the status quo has produced

an unfunded liability that exceeds current state ap-

propriations by 69 percent and threatens the state’s

ability to meet its promises to current employees. Con-

solidation of Oklahoma’s retirement system boards

can make sure government keeps its promises, re-

cruits a qualified workforce, and doesn’t unnecessar-

ily burden taxpayers.

Savings: Long-term elimination of state pension

liabilities and future obligations and savings in

reductions of unnecessary administrative costs

Major Asset Sales. The state owns many assets that

are not related to core functions of government or are

not being utilized. These assets can be sold. The state

should privatize or sell assets such as the Grand River

Dam Authority, the state’s interest in goodwill and sur-

plus value in CompSource, and multiple other assets.

These one-time funds should be used to repair core

assets, establish a fund with planned asset repair and

placement, and provide savings to continue to cut per-

sonal income taxes.


Savings FY-2015: $50 million to $200 million

(mutualize or privatize CompSource)

Savings FY-2014: $25 million (asset sales)

Savings FY-2015: $25 million (asset sales)

Savings FY-2015: $300 million (privatize GRDA)

Agency, Board, and Commission Reform. Whether

it is the Oklahoma Health Care Authority board’s past

indifference to a director’s high salary and ballooning

Medicaid costs, or past Department of Human Ser-

vices (DHS) commissioners’ indifference and destruc-

tive performance, it is time to hold board members

accountable. This can be done by making all guber-

natorial appointments at the will of the governor. De-

spite Oklahoma voters’ mandate for right-sizing gov-

ernment, “old guard” board appointments in some

cases will outlast a governor, even a governor elected

to two terms. This explains in part why higher-educa-

tion regents allow tuition increases of more than 100

percent in just nine fiscal years, why other boards ap-

prove the hiring of lobbyists with taxpayer funds, and

why still other boards grant completely undeserved

salary increases. Making gubernatorial appoint-

ments coincide with the term of the governor provides

for accountability, because the governor will be

watching (knowing that the citizens generally hold the

governor accountable).

In the longer term (as OCPA first recommended

early in the Brad Henry administration), we must em-

power the governor even further by eliminating many

of these boards and commissions altogether.

Oversight of Federal Funding. As mentioned

above, Oklahoma government spending is at an all-

time high. The most significant driver of state spend-

ing growth is federal funds, or what tax consumers

like to think of as “free” money. It is the federally in-

duced welfare programs, such as Medicaid, that re-

quire ever-increasing state funding matches for the

programs’ exploding costs. Again, according to

Oklahoma’s latest Comprehensive Annual Financial

Report (CAFR), total state spending on social services

has grown from $1.59 billion in FY-2005 to $2.09 billion

in FY-2012—an increase of 31.4 percent in seven

years. Total state spending on health services has

grown from $3.14 billion in FY-2005 to $5.44 billion in

FY-2012—an increase of 72.9 percent in seven years.

Based on this enormous growth, lawmakers must

take a serious look at state programs operated with

federal funds. In particular, oversight of state agen-

cies’ application for federal funds, and operation of

programs using federal funds, must begin immediately.

The current budget review process is inadequate.

There are simply too many programs being operated

by state agencies, and too much money being spent.

Just as lawmakers have established committees spe-

cifically for certain policy issues needing intense re-

view (e.g., DHS), it is time to designate an oversight

committee designed specifically to review and make

recommendations for all state programs utilizing federal

funds. The legislature’s newly created “non-appropri-

ated” committees, whose purpose is to review spending

not directly appropriated by lawmakers, are a suitable

place for this task of federal funds oversight.

The current unchecked growth in state government

spending is irresponsible. It is time for policymakers

to take fiscal federalism seriously, and chart a new

course toward economic freedom.

Privatization of State Services. Many of the ser-

vices currently provided by state agencies—the Tour-

ism Department, the Department of Corrections, the

Office of Juvenile Affairs, and the Department of Hu-

man Services come quickly to mind—can be per-

formed at the same or better quality and at lower cost

by the private sector. It is unjust to require taxpayers to

support overpriced services—especially when many

of these taxpayers are small-business owners being

forced to subsidize their own competitors.

In the 2013 session, lawmakers should establish a

joint committee, comprising both public and

nonpublic sector appointees, specifically tasked with

evaluating current services provided by government

that are also provided by the private sector. This com-

mittee should create a comprehensive list of services

that can be privatized, and then lawmakers should be

required to take formal action accepting or denying

the list of services to be privatized prior to the end of

the 2013 session.

Savings: Long-term reduction in the costs of providing

state services to allow for the re-direction of savings to

core services and continued personal income tax cuts


OCPA FY-2014 Budget RecommendationFY-13 Appropriation FY-14 Appropriation $ Change % Change

EDUCATION COMMITTEEArts Council $ 4,010,087 $ 0 $ -4,010,087 -100.00%Career and Technology Education $ 135,142,618 $ 131,736,863 $ -3,405,755 -2.52%Board of Education $ 2,333,604,082 $ 2,333,269,319 $ -334,763 -0.01%Oklahoma Educational Television Authority $ 3,822,328 $ 0 $ -3,822,328 -100.00%Regents for Higher Education $ 955,260,277 $ 954,939,901 $ -320,376 -0.03%Land Commission $ 16,000,000 $ 15,934,498 $ -65,502 -0.41%Department of Libraries $ 5,898,633 $ 5,846,114 $ -52,519 -0.89%Physician Manpower Training Commission $ 4,379,254 $ 0 $ -4,379,254 -100.00%Board of Private Vocational Schools $ 167,194 $ 165,323 $ -1,871 -1.12%School of Science and Mathematics $ 6,332,274 $ 5,139,082 $ -1,193,192 -18.84%Center for Science and Technology $ 17,811,449 $ 14,790,278 $ -3,021,171 -16.96%Teacher Preparation Commission $ 1,526,179 $ 0 $ -1,526,179 -100.00%

GENERAL GOVERNMENT AND TRANSPORTATION COMMITTEEAuditor and Inspector $ 4,706,986 $ 4,565,338 $ -141,648 -3.01%Bond Advisor $ 143,112 $ 139,603 $ -3,509 -2.45%Election Board $ 7,805,808 $ 7,783,116 $ -22,692 -0.29%Emergency Management $ 651,179 $ 620,299 $ -30,880 -4.74%Ethics Commission $ 588,129 $ 582,865 $ -5,264 -0.89%Office of Management and Enterprise Services $ 40,132,347 $ 38,738,321 $ -1,394,026 -3.47%Governor $ 2,172,900 $ 2,139,330 $ -33,570 -1.54%House of Representatives $ 15,574,682 $ 14,339,225 $ -1,235,457 -7.93%Legislative Service Bureau $ 4,892,835 $ 4,885,583 $ -7,252 -0.15%Lieutenant Governor $ 506,591 $ 501,444 $ -5,147 -1.02%Merit Protection Commission $ 490,967 $ 486,288 $ -4,679 -0.95%Military Department $ 10,747,997 $ 10,335,100 $ -412,897 -3.84%Senate $ 12,171,789 $ 10,996,688 $ -1,175,101 -9.65%Space Industry Development Authority $ 394,589 $ 0 $ -394,589 -100.00%Tax Commission $ 46,915,944 $ 46,090,383 $ -825,561 -1.76%Department of Transportation $ 206,405,702 $ 205,837,870 $ -567,832 -0.28%Treasurer $ 3,743,873 $ 3,499,366 $ -244,507 -6.53%

PUBLIC HEALTH COMMITTEEHealth Care Authority $ 921,983,007 $ 821,430,450 $ -100,552,557 -10.91%Health Department $ 61,783,682 $ 59,477,656 $ -2,306,026 -3.73%J.D. McCarty Center $ 3,740,338 $ 3,472,481 $ -267,857 -7.16%Mental Health and Substance Abuse $ 311,421,073 $ 309,511,335 $ -1,909,738 -0.61%University Hospitals $ 41,624,391 $ 38,611,525 $ -3,012,866 -7.24%Department of Veterans Affairs $ 35,698,752 $ 33,496,125 $ -2,202,627 -6.17%

HUMAN SERVICES COMMITTEECommission on Children and Youth $ 2,027,167 $ 1,997,691 $ -29,476 -1.45%Office of Disability Concerns $ 317,607 $ 310,823 $ -6,784 -2.14%Department of Human Services $ 586,958,664 $ 629,145,148 $ 42,186,484 7.19%Office of Juvenile Affairs $ 96,187,205 $ 95,359,890 $ -827,315 -0.86%Department of Rehabilitation Services $ 30,449,232 $ 29,351,018 $ -1,098,214 -3.61%

NATURAL RESOURCES COMMITTEEDepartment of Agriculture, Food and Forestry $ 27,610,247 $ 24,444,042 $ -3,166,205 -11.47%Department of Commerce $ 29,573,212 $ 21,658,578 $ -7,914,634 -26.76%Conservation Commission $ 10,061,684 $ 9,119,877 $ -941,807 -9.36%Consumer Credit Commission $ 31,730 $ 0 $ -31,730 -100.00%Corporation Commission $ 11,324,427 $ 10,831,640 $ -492,787 -4.35%Department of Environmental Quality $ 7,557,973 $ 6,964,594 $ -593,379 -7.85%Historical Society $ 12,502,546 $ 12,225,850 $ -276,696 -2.21%Horse Racing Commission $ 2,072,167 $ 0 $ -2,072,167 -100.00%Insurance Department $ 1,871,937 $ 0 $ -1,871,937 -100.00%J.M. Davis Memorial Commission $ 306,009 $ 0 $ -306,009 -100.00%


FY-13 Appropriation FY-14 Appropriation $ Change % Change

NATURAL RESOURCES COMMITTEE (CONT.)Department of Labor $ 3,311,160 $ 3,224,136 $ -87,024 -2.63%Department of Mines $ 779,139 $ 743,113 $ -36,026 -4.62%Scenic Rivers Commission $ 271,315 $ 258,565 $ -12,750 -4.70%Department of Tourism and Recreation $ 21,803,003 $ 19,822,314 $ -1,980,689 -9.08%Water Resources Board $ 6,999,671 $ 6,891,943 $ -107,728 -1.54%Will Rogers Memorial Commission $ 740,486 $ 0 $ -740,486 -100.00%Workers’ Compensation Commission $ 0 $ 10,000,000 $ 10,000,000 N/A

PUBLIC SAFETY COMMITTEEABLE Commission $ 3,140,334 $ 3,098,342 $ -41,992 -1.34%Department of Corrections $ 463,731,068 $ 458,723,195 $ -5,007,873 -1.08%Fire Marshal $ 1,796,764 $ 1,772,552 $ -24,212 -1.35%State Bureau of Investigation $ 13,848,059 $ 13,503,588 $ -344,471 -2.49%Law Enforcement Education and Training $ 3,682,560 $ 3,634,837 $ -47,723 -1.30%Board of Medicolegal Investigations $ 7,198,281 $ 7,113,128 $ -85,153 -1.18%Narcotics and Dangerous Drugs $ 3,616,418 $ 3,454,534 $ -161,884 -4.48%Department of Public Safety $ 89,894,790 $ 88,261,330 $ -1,633,460 -1.82%

JUDICIARY COMMITTEEAttorney General $ 15,228,141 $ 15,030,348 $ -197,793 -1.30%Court of Criminal Appeals $ 3,484,631 $ 3,450,827 $ -33,804 -0.97%District Attorneys Council $ 34,187,258 $ 32,883,181 $ -1,304,077 -3.81%District Courts $ 59,600,000 $ 58,877,605 $ -722,395 -1.21%Indigent Defense System $ 14,699,353 $ 14,582,385 $ -116,968 -0.80%Council on Judicial Complaints $ 0 $ 0 $ 0 N/APardon and Parole Board $ 2,217,454 $ 2,178,270 $ -39,184 -1.77%Supreme Court $ 17,337,000 $ 17,084,779 $ -252,221 -1.45%Workers’ Compensation Court $ 4,247,166 $ 4,162,247 $ -84,919 -2.00%

MISCELLANEOUS AGENCIES/APPROPRIATIONSRural Economic Action Plan (REAP) $ 11,532,469 $ 11,532,469 $ 0 0.00%OSU Medical Center $ 8,080,000 $ 3,080,000 $ -5,000,000 -61.88%

Government Wide Reforms (Not included in individual agency adjustments)

Telecommunications efficiency audits $ -3,000,000 $ -3,000,000 N/AHiring Reform $ -5,400,000 $ -5,400,000 N/A

Total Appropriations Including Misc Approp $ 6,828,529,375 $ 6,695,734,608 $ -132,794,767 -1.94%

Appropriation Savings (FY-2013 Appropriations less OCPA Recommendations) $ 132,794,767

FY-14 Growth in Appropriation Authority over FY-13 Certified Revenue Estimate(February 2013 Estimate) $ 216,381,208

Estimated FY-2014 revenue decline from income tax cut(All funds Excluding ROADS Fund) $ -117,963,198

Offsets for Estimated FY-2013 revenue decline from income tax cut to ROADS fund(transfer to ROADS fund) $ -17,004,762

Cash Flow Reserve Transer to Special Cash $ 116,000,000

Total Surplus Funds $ 330,208,015

Construction of Medical Examiner’s Office $ -43,000,000Capitol Building Repairs/Facility Study $ -10,000,000

Infrastructure projects $ -53,000,000

Surplus funds to carryforward for FY-2015 $ 277,208,015

EducationArts Council

This budget recommends that the Arts Council op-

erate solely from donations and self-generated funds,

without receiving state appropriations. Promotion of

the arts is a nonprofit interest, which should not be

advantaged over other nonprofit efforts that do not re-

ceive state appropriations.

Based on historical median income growth, adjust-

ing from 2011, Oklahoma’s median household income

will be $51,726 for 2013. According to the Oklahoma

Tax Commission, for 2013 there will be 54,811 tax re-

turns with an average Oklahoma personal income tax

liability of $1,375 (based on a federal adjusted gross

income of $50,000-$54,999). Accordingly, the amount

1 0 O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 4

of money given by lawmakers for state sponsorship of

the arts can be compared to approximately 2,916 tax-

paying families deprived of their hard-earned income.

State government has core functions which are ne-

glected when limited resources are diverted to philan-

thropic interests such as promotion of the arts. Re-

moving state funding for the Arts Council would not be

a unique reform attempted only by Oklahoma. Kansas

eliminated such funding in 2011, providing a great ex-

ample for all states of wisely using taxpayer funds.

Require more user responsibility

Redirect spending to higher-priority uses

Restore civil society

Career and Technology EducationA major source of revenue for school districts and

technology centers is the ad valorem tax, or property

tax, which is allowed by Article 10 of the Oklahoma

Constitution. The level of support technology centers

receive from property-tax sources varies based upon

what was approved for the technology centers

through a vote of the people in the district. Support

from property tax is capped at five mills for the gen-

eral fund (a mill = 1/10th cent), five mills for the incen-

tive fund for operations, and five mills for the building

fund, although not all technology center districts have

voted the full millage levy.

The use of building funds is generally limited to

“erecting, remodeling or repairing buildings and for

purchasing furniture.” Partially because of this provi-

sion, and because of economic growth in several

areas of the state, total CareerTech building fund

carry-forward balances increased from $36.8 million

in FY-2001 to $106.1 million in FY-2011, and local prop-

erty tax funds continue to grow. This enormous fund

growth—161 percent adjusted for inflation—has re-

sulted in technology centers across the state being

forced to make building purchases or improvements

that they do not need, while other potentially worth-

while expenses are neglected. This is like a family be-

ing forced to use a savings account to buy a new

home, when dad just lost his job and the family needs

to buy groceries.

CareerTech does not need increased state appro-

priations. What is needed is a constitutional amend-

ment and statutory changes allowing technology cen-

ters to use the existing local-district voting process to

Arts Council

FY-2013 $ 4,010,087

Not a core function of government; eliminate appropriation $ (4,010,087)

$ -

Total Savings $ 4,010,087

FY-2014 $ -

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 4 1 1

reallocate the total millage for technology centers as

their local citizens and their elected officials see fit.

This allows for local control and removes the need for

more state funding. Then CareerTech can adjust its

state allocations to local technology centers, saving

millions of dollars in state appropriations and allow-

ing for wiser use of local property taxes.

This budget recommends that CareerTech receive

the same appropriation provided for FY-2013, less sav-

ings from the implementation of the state employee

health insurance reform, less appropriations to

CareerTechs in large MSAs that have sufficient local

revenue to support their operations, and less a tar-

geted earmark.

Board of EducationOver the long term, lawmakers in Oklahoma must

address the ever-growing cost of common education,

which has been accompanied by results that remain

flat at unacceptably low levels. According to the

state’s FY-2012 Comprehensive Annual Financial Re-

port, total state spending on education has grown

from $3.53 billion in FY-2005 to $4.39 billion in FY-

2012—an increase of 24.4 percent in seven years. Ac-

cording to Dr. Greg Foster, federal data indicate that

“only half of Oklahoma’s public education employees

are teachers. The bureaucracy is now so big, it takes

up half the system.”

According to a report from the research affiliate of The

State Chamber, Oklahoma public schools spend $9,121

per pupil. This per-pupil expenditure significantly ex-

ceeds the average cost associated for alternatives to

public education. Cost-saving alternatives (such as

vouchers, tax credits, and Education Savings Accounts,

for example) need serious attention from lawmakers.

Imagine a state where a mom using Medicaid could

only take her daughter to a government hospital, or

where child care subsidies from the state could only

be used at a government-operated daycare center.

Imagine a state where Oklahoma Higher Learning

Access Program scholarships were granted only to

students who enrolled at the college or university

nearest their home, and that it had to be a public insti-

tution. Better yet, imagine a state in which high school

students could only attend the nearest public college

or university.

Needless to say, these programs would face signifi-

cant operational challenges and would fail to provide

many Oklahomans the programs are intended to

serve. Sadly, this is the mode of operation for provid-

ing funding for K-12 public education. Currently in

Oklahoma, a child’s residential address largely deter-

mines the educational fate of that child. The current

state funding formula essentially says to parents: You

will only get state assistance for your child’s education

if you go to a school designated by bureaucrats—re-

gardless of that school’s performance or quality. This

is unfair and discriminatory.

Career and Technology Education

FY-2013 $ 135,142,618

Savings from state employee health insurance reform $ (305,755)

Reduce state subsidy for technology centers with sufficent local revenues

to support operations without state funding (Metro, Francis Tuttle, Tulsa) $ (3,000,000)

Eliminate targeted funding for Kiamichi Technology Center $ (100,000)

$ -


FY-2014 $ 131,736,863


Now imagine an Oklahoma where families, stu-

dents, and educators were connected by state re-

sources to achieve the maximum in education effec-

tiveness, flexibility, and efficiency. Imagine a state

where students and parents can make a choice about

where students will receive an education best tailored

for the learning needs of each student. Imagine a

state K-12 funding mechanism that can be used to al-

low students and families to take supplemental

courses as needed at institutions of higher learning

when traditional methods are not adequate or satis-

factory. This can be accomplished in Oklahoma by

implementing a state-funded Education Savings Ac-

count (ESA).

Arizona is the only state so far to establish any form

of ESAs, but as Dr. Matthew Ladner points out, “Edu-

cation Savings Accounts are the way of the future.”

Under such accounts—managed by parents

with state supervision to ensure accountability—

parents can use their children’s education fund-

ing to choose among public and private schools,

online education programs, certified private tu-

tors, community colleges and even universities.

Education Savings Accounts allow parents to

withdraw their children from public district or

charter schools and receive a deposit of public

funds into government authorized savings ac-

counts with restricted, but multiple, uses. Those

funds can cover private school tuition and fees,

online learning programs, private tutoring, com-

munity college costs and other higher education

expenses.

To empower parents and students, it’s time for

Oklahoma to change its outdated funding program.

Oklahoma should convert its funding mechanism for

state support of K-12 education to funding ESAs. It’s

time to fund students, not schools.

For starters, Oklahoma should begin to offer ESAs

for newly enrolled pre-K students starting with the

2013-2014 school year. If parents or guardians choose

not to enroll their preschooler in a public pre-K pro-

gram, the state will deposit the state’s portion of pre-K

funds into the parents’ savings account. According to

the National Institute for Early Education Research

(NIEER), state funding (excluding local and federal aid)

for 4-year-olds averages $3,461 per student in Okla-

homa. Parents choosing the ESA could use this money

for any of the multiple alternatives mentioned above.

Ideally, the program would be expanded every

year, so that parents of K-12 students could also ben-

efit from ESAs. This will instill in students, parents, and

families the paradigm shift to saving, planning, and

engaging in education throughout life.

Oklahoma’s funding formula which determines the

amount of state aid given to public schools is out-

dated. The formula uses the highest enrollment num-

ber in a three-year period to determine aid, which re-

sults in state aid not matching the actual annual en-

rollment for students and in inequitable school fund-

ing. Funding should be adjusted based on the annual

enrollment. When this change is made, many schools

will justly see an increase in their state aid.

This budget recommends that the Board of Educa-

tion receive the same appropriation provided for FY-

2013, less savings from the implementation of the state

employee health insurance reform.

Board of Education

FY-2013 $ 2,333,604,082


$ -

Total Savings $ 334,763

FY-2014 $ 2,333,269,319


Oklahoma Educational Television Authority

Educational Television Authority

FY-2013 $ 3,822,328

Not a core function of government;

eliminate appropriation $ (3,822,328)

$ -


FY-2014 $ -

“Public broadcasting is a wonderful resource, pro-

viding quality programming that is cherished by

many,” Virginia Gov. Bob McDonnell has correctly

noted. Nevertheless, he recommended eliminating

state funding for public broadcasting. “In our modern

media world,” he said, “there are thousands upon

thousands of content providers operating in the free

market. They compete with each other, and viewers

and listeners have their choice as to what to tune into

or turn on. Simply put, it doesn’t make sense to have

some stations with the competitive advantage of being

funded by taxpayer dollars. The decision to eliminate

state funding of public broadcasting is driven by the

fundamental need to reestablish the proper role of

government, and budget accordingly.”

Similarly, in 2011, Florida Gov. Rick Scott vetoed the

state’s $4.8 million appropriation for public broad-

casting.

State-run television is not a core function of govern-

ment, worthy of taking the hard- earned income of

Oklahomans. Based on historical median income

growth, adjusting from 2011, Oklahoma’s median

household income will be $51,726 for 2013. According

to the Oklahoma Tax Commission for 2013 there will

be 54,811 tax returns (federal adjusted gross income

of $50,000-$54,999), with an average Oklahoma per-

sonal income tax liability of $1,375. Based on this, the

amount of money given by lawmakers for state-run

television can be compared to approximately 2,780

taxpayers and their families that are deprived of their

hard-earned income. According to the Oklahoma

Educational Television Authority (OETA), as of FY-2012,

17 states are not providing state funding for public

broadcasting. Consistent with the principles of free

enterprise and limited government, this budget re-

moves all state appropriations from OETA and recom-

mends that all OETA assets, including any bandwidth

rights, be assigned to the nonprofit OETA Foundation,

giving OETA a firm footing to continue operations with-

out any taxpayer funding.

Oklahomans who wish to support OETA may send a

donation to the OETA Foundation, P.O. Box 14190,

Oklahoma City, Oklahoma 73113.




Regents for Higher EducationJeff Sandefer, a successful entrepreneur and former

University of Oklahoma professor, recently wrote:

The truth is that over the next decade, many uni-

versities may bankrupt themselves by clinging to

an educational approach that confuses lecturing

with learning and protects highly paid, tenured

faculties and administrators from a tsunami of

technological change that soon will deliver trans-

formational learning at a fraction of today’s costs.

There’s a word for business models that have high

and increasing fixed costs, and are faced by dis-

ruptive strategies that offer better results at a

lower price. That word is “doomed.” ...

The real problems in higher education are

more fundamental than tuition increases alone:

(1) A public that increasingly questions the value


of a college degree. … (2) High and rising fixed

costs from tenured faculty, bloated administrative

staffs, and expensive new buildings at a time

when tenured-faculty teaching productivity is fall-

ing ... (3) A tsunami of technologically enabled

educational change promises to deliver transfor-

mational learning at a fraction of today’s costs.

These problems exist in Oklahoma. Since the Leg-

islature granted the State Regents authority to ap-

prove tuition and fee increases in 2003, undergradu-

ate resident tuition and fees have increased by 100.59

percent during the last nine fiscal years, according to

the State Regents. During the same time period, infla-

tion has only increased by approximately 25 percent,

while private earnings rose only about 45 percent.

During that time, when comparing each year of

Higher Ed appropriations to FY-2004, even after ad-

justing for inflation and including budget cuts, the Leg-

islature has maintained total appropriations to higher

education and in several years substantially ex-

ceeded that level.

Tuition at the University of Oklahoma and Okla-

homa State University during that time period is even

more alarming:

Oklahoma State University (including the Tulsa

campus) – Undergraduate Resident Tuition and Man-

datory Fee Increases:

• FY-2003 – $100.83 main campus tuition and fees per

credit hour


credit hour

• 134.95 percent – main campus tuition and fee in-

creases over last 9 years

• 25 percent – inflation over last 9 years

• $2,069.40 – increase per 15-hour semester

University of Oklahoma – Undergraduate Resident

Tuition and Mandatory Fee Increases:


credit hour


credit hour

• 144.17 percent – main campus tuition and fee in-

creases over last 9 years

• 25 percent – inflation over last 9 years

• $2,103.30 – increase per 15-hour semester

Analyzing the State Regents data, tuition increases

are not just based on enrollment growth. In the fall of

2003 the full-time equivalent enrollment was 96,856

and by 2009 had grown by 2,059 or 2.13 percent.

Meanwhile, over the same period, average under-

graduate resident tuition and mandatory fee in-

creases grew 69.51 percent for research universities

and 52.19 percent for regional universities. Inflation

over this period of time was 17 percent and the private

earnings of Oklahomans grew 35.03 percent over this

same period.

In 2010, Oklahoma ranked 13th in per capita higher

education appropriations but ranked 37th in

bachelor’s degree attainment. For Oklahoma public

four-year institutions, only 19.97 percent of students

graduate within 4 years, and 55 percent of Oklahoma’s

students fail to graduate within even six years.

In an investigative review (review of FY-2012 and

prior years) of Oklahoma college and university bud-

gets, Peter J. Rudy of Oklahoma Watchdog reported:

Spending at state colleges and universities this

year is 66% higher than it was just 10 years ago

according to data obtained by Oklahoma Watch-

dog through Open Records requests. The Educa-

tion and General (E&G) budgets of the 25 state

colleges and universities grew from $1.29 billion in

FY2003 to $2.13 billion in the current fiscal year. …

[W]hile Oklahoma suffered two economic down-

turns during that period, spending never de-

creased at state colleges and universities.

The last three years, Oklahoma has experi-

enced a revenue failure and two budget shortfalls,

yet Higher Ed spending increased by 2.5%, 2.8%

and 3.9% in those years. The 3.9% increase this

year comes despite state lawmakers decreasing

state appropriations to Higher Ed by 5% in the

budget. Colleges and universities have other

sources of revenue, primarily tuition and fees,

which allowed spending to rise. Every state college

and university raised tuition and fees this year.

According to the State Regents, total student


(headcount) enrollment at public colleges and univer-

sities was 228,249 for 2002-03 (FY-2003). Allocating the

FY- 2003 budget to enrollment for 2002-03 equals an

E&G budget of $6,028.83. The headcount for 2011-12

(assuming the average of growth the last 3 years) is

262,413. Allocating the FY-2012 budget to enrollment

for 2011-12 equals an E&G budget of $8,116.97. Ana-

lyzing these data, public colleges and universities in

Oklahoma have increased the E&G budget per

student by $2,088.14 or approximately $547.9 million in

nine years.

Low productivity among professors is also a prob-

lem in Oklahoma. For example, in a 2002 study con-

ducted of a non-medical and non-engineering divi-

sion of an Oklahoma research institution (see nearby

table), it was found that multiple professors were paid

salaries exceeding $100,000 a year, taught in some

cases as little as one class per year, and taught few

students compared to non-tenured professors and

graduate assistants.

Concerning the number of colleges and universities

in Oklahoma (25) and the total number of “higher edu-

cation” centers (52), it is time for the administrative

and “back office” functions of the colleges and univer-

sities to be consolidated into the two research univer-

sities. These larger institutions have achieved econo-

mies of scale, and their far superior graduation rates

are just one example of why it is time to end the politi-

cal patronage approach to the number of colleges

and universities in Oklahoma and their control. It is

also time for the State Board of Regents and lawmak-

ers, in coordination with the two research institutions,

to consolidate many of the regional and community

colleges to vertically achieve efficiency, cost savings,

better degree quality, and better graduation rates.

One need only to look at the salaries of the college

and university presidents, and the corresponding

graduation rates, to see these reforms are needed.

In summary, the State Regents should address the

following challenges:

• Lack of “teaching only” tenure track, low professor

teaching loads

• Distractions taking away from core teaching and

sound research

• Non-applicable course requirements

• Lack of public access to information such as stu-

dent evaluations

• Lack of collaboration between common education

and higher education

• Perceived infinite third-party funding sources dis-

torting prices and demand, thus exponentially

growing costs of higher education

Total Total # of SalaryTeachers Classes Students 2002Name redacted 2 70 $188,423.16Name redacted 2 89 158,522.80Name redacted 3 122 135,477.99Name redacted 3 62 136,426.04Name redacted 3 133 192,520.48Name redacted 1 34 126,757.00Name redacted 2 63 170,401.29Name redacted 2 76 150,000.00Name redacted 3 113 115,086.00Name redacted 1 11 223,850.60Name redacted 4 21 184,893.09Name redacted 3 67 146,482.74Name redacted 3 115 156,929.11Name redacted 2 70 129,883.74Name redacted 1 35 104,435.83Name redacted 3 59 110,634.79Name redacted 1 10 243,160.23

College DazeFour-Year Four-Year Salary ofPublic Graduation UniversityUniversity Rate President

Rogers State University 4% $215,000Cameron University 6% $261,100Langston University 13% $247,000Southeastern Oklahoma State University 11% $172,000University of Science and Arts of Oklahoma 19% $165,465Northeastern State University 11% $215,360Southwestern Oklahoma State University 12% $157,667Northwestern Oklahoma State University 15% $160,000East Central University 11% $172,500University of Central Oklahoma 12% $266,492Oklahoma Panhandle State University 23% $192,250Oklahoma State University 31% $371,786University of Oklahoma 29% $384,816

Sources: Graduation rates are available from IPEDS, U.S. Department ofEducation. This is a percentage of entering students who began their studiesfull-time in the fall of 2003 seeking a bachelor’s degree who earned a bachelor’sdegree within four years. Salary date for FY-2010 are from the Oklahoma Officeof State Finance.


The State Regents should implement the following

reforms immediately:

• Enact a moratorium on tuition and fee increases

(moratorium would be enacted by the state Legisla-

ture) for the next three years, and then regents

would be allowed the authority to increase tuition

for inflation only.

• Create a higher education transparency website

with information such as a total cost of degree cal-

culator, matched with expected student debt, em-

ployment rate of degree, and salary/income return

of degree selected

• Create a “Degree Requirements Council,” consist-

ing of employers only, who over a period of two

years will evaluate general education require-

ments, recommending elimination of non-appli-

cable courses

• Create a “Research Review Council,” consisting of

employers only, to review research activities and

make recommendations concerning usefulness

and resource allocation

• Separate teaching and research functions, require

accountability and transparency for funding and

results for each function

• Create a professor “teaching only” tenure track

• Give performance bonuses for teaching more than

three classes a semester

• Make student professor evaluations available to the

public

• Make faculty workloads and costs available to the

public

• Make higher education and college and university

lobbying costs available to the public, regardless of

source (include names of those handling those po-

sitions)

• Make higher education and college and university

“government affairs” or “legislative liaison” costs

available to the public, regardless of source

• Restructure oversight and create a “central office”

for education

• Join the national effort and create a $10,000

bachelor’s degree at Oklahoma’s public institu-

tions of higher education

This budget recommends that the State Regents for

Higher Education receive the same appropriation for FY-

2013 less savings from the implementation of the state

employee health insurance reform and that the State

Regents implement the reforms described above.

Regents for Higher Education

FY-2013 $ 955,260,277


$ -


FY-2014 $ 954,939,901

Land Commission

FY-2013 $ 16,000,000


$ -


FY-2014 $ 15,934,498

Land CommissionThis budget recommends that the Land Commis-

sion receive the same appropriation provided for FY-


employee health insurance reform, and recommends

the Commission allocate any additional savings to

schools as required by law.


Department of Libraries

FY-2013 $ 5,898,633


$ -


FY-2014 $ 5,846,114

Department of LibrariesThis budget recommends that the Department of Li-

braries receive the same appropriation provided for

FY-2013, less savings from the implementation of the

state employee health insurance reform.

Physician Manpower Training Commission

through the statewide subsidization of one specific in-

dustry. Based on historical median income growth,

adjusting from 2011, Oklahoma’s median household

income will be $51,726 for 2013. According to the

Oklahoma Tax Commission for 2013 there will be

54,811 tax returns with an average Oklahoma per-

sonal income tax liability of $1,375 (based on a federal

adjusted gross income of $50,000-$54,999). Accordingly,

the amount of money given by lawmakers for state spon-

sorship of physician training can be compared to ap-

proximately 3,185 taxpayers and their families that are

deprived of their hard-earned income. Further, focusing

on significant tax relief for Oklahomans, with the asso-

ciated economic growth and the increase in local rev-

enues, provides a better opportunity for local communi-

ties to become self-sufficient and operate local

workforce recruitment programs.


This budget recommends that the Physician Man-

power Training Commission (PMTC) operate com-

pletely from self-generated funds, local government

funds, and donations, without receiving state appro-

priations. The Physician Manpower Training Commis-

sion, according to its website, exists “to enhance

medical care in rural and underserved areas of the

state by administering residency, internship and

scholarship incentive programs that encourage medi-

cal and nursing personnel to practice in rural and

underserved areas. Further, PMTC is to upgrade the

availability of health care services by increasing the

number of practicing physicians, nurses and physi-

cian assistants in rural and underserved areas of

Oklahoma.” These efforts are intensely local functions

focused on local workforce training and recruitment.

These efforts should be directly funded and supported

by the local governments and users that benefit, not

Physician Manpower Training Commission

FY-2013 $ 4,379,254

Function of local government and local workforce recruitment;

eliminate appropriation $ (4,379,254)

$ -


FY-2014 $ -


Board of Private Vocational Schools

The Board of Private Vocational Schools licenses,

regulates, and sets standards for the operation of pri-

vate schools that conduct occupational training.

Schools licensed by the Oklahoma Board of Private

Vocational Schools are the “silent service” of educa-

tion. They are generally privately owned, and are

mostly small institutions with a student body counted

in the tens or hundreds rather than in the thousands.

Their physical plants are modest in size and appear-

ance, and they have no lobbyists roaming the halls of

the capitol seeking appropriations.

Unlike privately owned entities licensed by other

state boards (banks and funeral homes, for example),

licensed private career schools perform a service nor-

mally performed by the state. In providing educational

services, private career schools save the state millions of

dollars in educational costs, reduce welfare expenses,

offer choice in education, and produce job-ready gradu-

ates. The benefits inuring to Oklahoma through the pri-

vate career schools regulated by the Oklahoma Board

of Private Vocational Schools are enormous.

This budget recommends that the Board of Private

Vocational Schools receive the same appropriation

provided for FY-2013, less savings from the implemen-

tation of the state employee health insurance reform.

Board of Private Vocational Schools

FY-2013 $ 167,194


$ -


FY-2014 $ 165,323

School of Science and Mathematics

FY-2013 $ 6,332,274

Implement tuition sharing program $ (1,125,000)


$ -


FY-2014 $ 5,139,082

School of Science and Mathematics

This budget recommends that the Oklahoma

School of Science and Mathematics (OSSM) promote

individual responsibility by requiring that students

who attend OSSM help defray some of the costs of

their education.

Through local property taxes, state sales taxes,

state income taxes, motor vehicle taxes, and other

taxes and fees, Oklahoma taxpayers heavily subsi-

dize common education by way of the 1017 fund, the

general revenue fund, and other sources totaling

more than $2 billion annually in appropriations to the

state Board of Education. OSSM is a predominantly

taxpayer-subsidized advanced college preparatory

school, with a restricted number of students. This bud-

get recommends that OSSM institute a tuition-sharing

program for each student of $250 a month, for 9

months. Even with this arrangement, students will

only pay approximately 20 percent of the cost of their

attendance at OSSM. This budget recommends that

OSSM receive the same appropriation provided for FY-

2013, less the new revenue generated by the tuition shar-

ing arrangement and savings from the implementation

of the state employee health insurance reform.



Center for Science and TechnologyThis budget recommends that the Oklahoma Cen-

ter for Science and Technology (OCAST) no longer

receive state funding for the Oklahoma Technology

Commercialization Center (OTCC). This program di-

rectly competes with the private sector and existing

market participants engaged in business formation

and development. It is another example of the state

picking winners and losers. If the private sector is in-

terested in subsidizing a competitor through the con-

tinued existence of this program, then it will support

this program through donations to OCAST specifi-

cally for this program. Based on historical median in-

come growth, adjusting from 2011, Oklahoma’s me-

dian household income will be $51,726 for 2013. Ac-

cording to the Oklahoma Tax Commission for 2013

there will be 54,811 tax returns with an average Okla-

homa personal income tax liability of $1,375 (based on

a federal adjusted gross income of $50,000-$54,999).

Accordingly, the amount of money given by lawmak-

ers for state sponsorship of physician training can be

compared to approximately 2,182 taxpayers and their

families that are deprived of their hard-earned income.

This budget recommends that OCAST receive the same

appropriation provided for FY-2013, less funding for the

OTCC and less savings from the implementation of the


Center for Science and Technology

FY-2013 $ 17,811,449


Eliminate state funding of the technology commercialization program, this

business development program competes directly with the private sector $ (3,000,000)

$ -


FY-2014 $ 14,790,278

Teacher Preparation CommissionThis budget recommends that the Oklahoma Com-

mission for Teacher Preparation (OCTP) no longer re-

ceive a state appropriation. According to its website,

the OCTP’s mission is “to develop, implement, and fa-

cilitate competency-based teacher preparation, candi-

date assessment, and professional development sys-

tems.” Since its creation, taxpayers have provided ap-

propriations of more than $30.5 million to the OCTP, in-

cluding the $1.5 million appropriated to the agency for

FY 2013.

Despite poor results, total state spending on educa-

tion continues to increase. Excluding funds for OCTP,

taxpayers already spend billions of dollars on other

state agencies, such as the state Department of Edu-

cation, CareerTech, state aid for common education,

OETA, and more than a billion of taxpayer dollars for

subsidized colleges and universities. These government

entities should already “implement and facilitate com-

petency-based teacher preparation, candidate as-

sessment, and professional development systems”—

particularly the institutions granting bachelor’s de-

grees and higher. Oklahoma taxpayers should not be

required to pay for this twice.

Teachers are professionals. Once they enter the

workforce, they, like many other professionals, are

now providing a service to their particular employer

and their local community. Locally benefiting employ-

ers, communities, and teachers should bear the costs

for any licensing, credentialing, and additional train-

ing or development—just as is the case with many

other professions that do not receive taxpayer funds.

The Teacher Preparation Commission is a duplicative


function of government, as teachers are graduates of

heavily taxpayer-subsidized public colleges and uni-

versities and private universities which receive tax-

payer subsidized grants and federally subsidized stu-

dent loans. Since most teachers are required to have

bachelor or higher level degrees, their degree pro-

gram has or should have already prepared them. Any

additional preparation needed is a specific benefit to

local government and districts and should be funded

locally if a priority.

Reshape the state-local government relationship

Teacher Preparation Commission

FY-2013 $ 1,526,179

Duplicative function of government and function of local government $ (1,526,179)

$ -


FY-2014 $ -


Auditor and Inspector

FY-2013 $ 4,706,986


$ -


FY-2014 $ 4,565,338

Bond Advisor

FY-2013 $ 143,112


$ -


FY-2014 $ 139,603

General Government

Auditor and InspectorThis budget recommends that the Auditor and In-

spector receive the same appropriation provided for



Bond AdvisorThis budget recommends that the Bond Advisor re-

ceive the same appropriation provided for FY-2013,

less savings from the implementation of the state em-

ployee health insurance reform.

Election BoardThis budget recommends that the Election Board

receive the same appropriation provided for FY-2013,

Election Board

FY-2013 $ 7,805,808


$ -


FY-2014 $ 7,783,116




Emergency ManagementThis budget recommends that Emergency Manage-

ment receive the same appropriation provided for FY-



Ethics CommissionThis budget recommends that the Ethics Commis-

sion receive the same appropriation provided for FY-



Office of Management and Enterprise Services (formerly the Office of State Finance)


health insurance reform.

GovernorThis budget recommends that the Governor receive




Emergency Management

FY-2013 $ 651,179


$ -


FY-2014 $ 620,299

Ethics Commission

FY-2013 $ 588,129


$ -


FY-2014 $ 582,865

Office of Management and Enterprise Services

FY-2013 $ 40,132,347

Savings from state employee health insurance reform $ (1,394,026)

$ -


FY-2014 $ 38,738,321

Governor

FY-2013 $ 2,172,900


$ -


FY-2014 $ 2,139,330

This budget recommends that the OMES receive



House of RepresentativesThis budget recommends that the House of Repre-

sentatives receive the same appropriation provided

for FY-2013, less savings from the implementation of

the state employee health insurance reform and less

one-time funds for FY-2013. To better facilitate law-

makers’ continuing education on policy development

and their need to participate in lawmaker-led organi-

zations, this budget also recommends that the House

of Representatives, the Senate, and the Legislative

Service Bureau allocate all funds given to member-

ship organizations on a scholarship basis to each

lawmaker. This will allow lawmakers to seek innova-

tive policy solutions from organizations they deem

most beneficial.

Legislative Service BureauThis budget recommends that the Legislative Ser-

vice Bureau receive the same appropriation provided


the state employee health insurance reform. To better

facilitate lawmakers’ continuing education on policy

development and their need to participate in law-

maker-led organizations, this budget also recom-

mends that the House of Representatives, the Senate,

and the Legislative Service Bureau allocate all funds

given to membership organizations on a scholarship

basis to each lawmaker. This will allow lawmakers to

seek innovative policy solutions from organizations

they deem most beneficial.

Lieutenant Governor

This budget recommends that the Lieutenant Gov-

ernor receive the same appropriation provided for FY-



Lieutenant Governor

FY-2013 $ 506,591


$ -


FY-2014 $ 501,444

House of Representatives

FY-2013 $ 15,574,682


Reduce FY-2013 one-times $ (1,000,000)


FY-2014 $ 14,339,225

Legislative Service Bureau

FY-2013 $ 4,892,835


$ -


FY-2014 $ 4,885,583


Merit Protection CommissionThis budget recommends that the Merit Protection

Commission receive the same appropriation provided


the state employee health insurance reform.

Military DepartmentThis budget recommends that the Military Depart-




Secretary of StateThis budget recommends that the Secretary of

State continue to operate solely from fees associated

with its various regulatory duties and receive no ap-

propriation, as provided for FY-2013. This budget also

recommends lawmakers cease the practice of raid-

ing the operating fund of the Secretary of State and

diverting those funds to other sources. These funds

are derived from Oklahomans. Any surplus funds

should be used for the Secretary of State to save for

future needs or to reduce fees.

Merit Protection Commission

FY-2013 $ 490,967


$ -


FY-2014 $ 486,288

Military Department

FY-2013 $ 10,747,997


$ -


FY-2014 $ 10,335,100


SenateThis budget recommends that the Senate receive



health insurance reform and less one-time funds for

FY-2013. To better facilitate lawmakers’ continuing

education on policy development and their need to

participate in lawmaker-led organizations, this bud-

Senate

FY-2013 $ 12,171,789


Reduce FY-2013 one-times $ (1,000,000)

$ -


FY-2014 $ 10,996,688

get also recommends that the House of Representa-

tives, the Senate, and the Legislative Service Bureau

allocate all funds given to membership organizations

on a scholarship basis to each lawmaker. This will al-

low lawmakers to seek innovative policy solutions

from organizations they deem most beneficial.

Space Industry Development Authority

FY-2013 $ 394,589


$ -


FY-2014 $ -

Space Industry Development Authority

This budget recommends that the Space Industry

Development Authority (SIDA) no longer receive a

state appropriation. When created in 1999, SIDA was

intended to operate entirely on self-generated rev-

enues, according to the SIDA website. Despite this in-

tent, lawmakers have given $8.2 million in taxpayer

appropriations to SIDA since its inception, including

the $394,589 given to the agency for FY-2013. Based on

historical median income growth, adjusting from 2011,

Oklahoma’s median household income will be

$51,726 for 2013. According to the Oklahoma Tax

Commission for 2013 there will be 54,811 tax returns

with an average Oklahoma personal income tax li-

ability of $1,375 (based on a federal adjusted gross in-

come of $50,000-$54,999). Accordingly, the amount of

money given by lawmakers for state sponsorship of

space travel can be compared to approximately 287

taxpayers and their families that are deprived of their

hard-earned income. State-subsidized space travel is

not a core function of state government. Also, the in-

frastructure of SIDA is now used for more than just at-

tempts at space travel, and some reports indicate that

if SIDA were freed from state control it could generate

enough income to operate on its own.




Tax CommissionThis budget recommends that the Tax Commission




Department of TransportationThis budget recommends that the Department of

Transportation receive the same appropriation pro-

vided for FY-2013, plus funds to maintain the ROADS

plan, less savings from the implementation of the state


TreasurerThis budget recommends that the Treasurer re-



ployee health insurance reform and savings and effi-

ciency efforts internally accomplished by the

Treasurer’s office.

Tax Commission

FY-2013 $ 46,915,944

Reduce appropriation, function of private industry and local government $ (825,561)

$ -


FY-2014 $ 46,090,383

Department of Transporation

FY-2013 $ 206,405,702


Scheduled transporation increases to meet maintenance schedule $ 2,124,891

$ -


FY-2014 $ 205,837,870

Treasurer

FY-2013 $ 3,743,873


Additional savings and efficiencies implemented by agency $ (190,000)

$ -


FY-2014 $ 3,499,366


Public Health

• In a March 1, 2013 article, Peter J. Rudy of Okla-

homa Capitol Source found that the state Medicaid

program in Oklahoma has increased in costs and

those served for every year of the last 16 years, cit-

ing that “The number of individuals served has

never decreased – no matter what the state’s eco-

nomic condition is – more than doubling in that

same period.”

The problem is not that there is too little money for

Medicaid; the problem is there are too many people

on Medicaid, which has already been expanded too

far—and those enrollees are driving program expen-

ditures beyond sustainable limits.

Oklahoma voters decided to install a center-right

government because they are looking for real leader-

ship and real solutions. The governor, executive

branch leaders, state legislators, and Oklahoma’s

congressional delegation should lead an unrelenting

effort to obtain waivers from the federal government,

or adopt Medicaid program plan amendments that

would allow Oklahoma to implement significant re-

forms to the Medicaid program. Preferably, the state

should seek federal approval to convert Medicaid into

a block grant program, which would give the state

more control over how program dollars are spent.

Until a block grant and premium assistance pro-

gram can be fully implemented, state leaders should

take advantage of all currently available options to

significantly improve Medicaid by implementing the

best Medicaid reforms pursued by Florida, Louisiana,

Kansas, and other states looking to make Medicaid

serve patients first and empower patients toward self-

sufficiency.

The Foundation for Government Accountability in

Florida has provided extensive information regarding

Florida’s success with its Medicaid reform and the

cumulative hundreds of millions of dollars it has saved

the state of Florida. Louisiana is pursuing similar re-

forms. In the first year, Louisiana has experienced

savings exceeding $135 million from implementing

Health Care AuthorityAccording to the state’s FY-2012 Comprehensive

Annual Financial Report, total state spending on

health services has grown from $3.14 billion in FY-2005

to $5.44 billion in FY-2012—an increase of 72.9 percent

in seven years.

According to the Oklahoma Health Care Authority’s

FY-2000, FY-2010, and FY-2012 annual reports:

• In FY-2000 there were nearly 416,785 Medicaid

(12.13 percent of the population) enrollees and total

(state and federal) Medicaid expenditures of $1.14

billion. By FY-2012, the number of Medicaid enroll-

ees had ballooned to 1,007,356 (about 26.57 percent

of the state’s population) and expenditures had sky-

rocketed to $4.77 billion—an increase of 190.9 per-

cent in just 12 years. Inflation over this period was

just 35 percent. Total population growth in Okla-

homa over that same period was just 10.3 percent.

The unemployment rate for Oklahoma only moder-

ately increased over this period, 3.1 percent in 2000,

ranking 12th out of the 50 states and in Oklahoma in

2012 was 5.2 percent, ranking 5th out of the 50 states.

• For Federal Fiscal Year 2000, all funds spent by the

state for Medicaid excluding federal funds were

$492.1 million. In Federal Fiscal Year 2012, all funds

spent by the state for Medicaid were $1.8 billion—a

277.4 percent increase in just 12 years.

• Approximately 64 percent of births are covered by

Medicaid.

• Approximately 72 percent of all Oklahoma children

under the age of five have been covered by Medic-

aid at some point during FY-2012.

• Medicaid was originally designed for the aged,

blind, and disabled, yet now this population only

comprises 16.4 percent of enrollees and just 47.1

percent of the cost in Oklahoma.

• Based on 2010 data, of Oklahoma’s 77 counties, 38

counties have 25 percent or more of the population en-

rolled in Medicaid. Eighteen counties have 30 percent

or more of the population enrolled in Medicaid. One

county has 43 percent of its population on Medicaid.


Medicaid reform. Fundamentally, the reforms refocus

Medicaid programs on the patient, incentivized care

coordination, health improvement, patient empower-

ment, and taxpayer savings. The reforms include the

following (the vast majority of which can be imple-

mented by way of a plan amendment process which is

much shorter than a waiver process) and have been

approved by the current HHS administration of Presi-

dent Barack Obama:

• Mandatory Medicaid benefits

• Optional Medicaid benefits

• Case manager to help coordinate patient care

• Patients can switch plans

• State offers traditional HMO plans (for-profit and

not-for-profit)

• Patients choose from at least four plans

• Patients get choice counseling that helps them

make health plan decisions

• Patients can buy private coverage, if available

• Provider Service Networks (PSNs) that are hospital-

run

• PSNs run by physicians or Federally Qualified

Health Centers (FQHCs)

• Specialty plans that treat specific conditions and

populations

• Plans can negotiate higher fees to network physicians

• Plans can negotiate higher fees to network specialists

• Plans can provide richer optional benefits (i.e.,

more visits, more prescriptions)

• Plans can tailor preferred drug lists (PDLs)

• Plans can waive copays for patients

• Plans can provide additional benefits, such as pre-

ventive care and adult vision/dental

• Plans can provide disease management and dis-

ease-specific benefits and services

• Plans can provide new benefits, such as respite

care and over-the-counter pharmacy

• Patients get cash incentives for healthy behavior

• Plans get more money for enrolling sick patients

and making them well (risk-adjusted rates)

• State has the flexibility for payment reform and in-

novation

• State tracks and publicizes patient access and sat-

isfaction (CAHPS survey)

• State tracks and publicizes 30+ patient health out-

comes (HEDIS measures)

• State tracks and publicizes patients’ plan choices

• Medicaid produces fixed, budgeted costs per person

• State has the ability to control Medicaid cost trends

• Medicaid produces planned savings for the state

Other Medicaid reform options include:

• Member Cost-Sharing: It is altogether reasonable

to ask welfare recipients or their families (either im-

mediate or extended families) to contribute in a

small way to the free medical care they receive at

taxpayer expense. With more than 1,000,000 Okla-

homans enrolled in Medicaid, a low monthly pre-

mium of $10 each month would return more than

$100 million to the program annually. Another op-

tion is to charge low premiums on a sliding scale,

where members with higher incomes would be

charged a slightly higher premium than low-in-

come members. This concept is not novel; indeed, it

is the basis for the current Insure Oklahoma pro-

gram. Both of those options would require a federal

waiver, or could be implemented via a plan amend-

ment with incentives; however, the Deficit Reduction

Act of 2005 (DRA) does give states flexibility to make

reforms to their Medicaid programs, including al-

lowing states to charge premiums and require cost-

sharing (co-pays and deductibles) to certain enroll-

ees. This can include weighting cost-sharing based

on those engaged in unhealthy behaviors such as

smoking or obesity and excessive emergency room

usage, to incentivize better health for Medicaid par-

ticipants. Legislators should ensure that the state is

requiring member cost-sharing to maximum allow-

able limits.

• The state should pursue more robust efforts to en-

sure Medicaid enrollees are actually eligible for

coverage. It has been found that some enrollees

are unlawfully covered, particularly after marital

status changes. Other Medicaid fraud efforts such

as those implemented in Pennsylvania should be

implemented to ensure the integrity and sustainability

of the program for qualifying enrollees.


• The state should make efforts to ensure that tax

cheats who receive Medicaid reimbursement move

to a status of properly complying with both federal

and state tax laws.

• Long-Term-Care Reform

• Examining and Reducing “Optional” Benefits

• Insure Oklahoma: Legislators should allow the ap-

proximately 13,000 current individual Insure Okla-

homa members to obtain coverage through the pri-

vate market rather than being forced onto Medicaid.

• Employer-Sponsored Insurance for Part-Time Work-

ers: Legislators should incentivize employer-spon-

sored insurance for employees (and their depen-

dents) who work at least 24 hours each week, which

current state law defines as “full time” employment,

instead of inducements to enter the state Medicaid

program.

• Medicaid Reform Task Force: If reforms are not

implemented in the 2013 legislative session, legisla-

tors should create a task force to begin studying

Medicaid and options for reducing costs. The

above proposals should be part of any task force

that convenes to explore real reform efforts.

• Medical pricing transparency: The state should

incentivize medical providers who are reimbursed

by Medicaid to transparently post their prices for all

procedures performed (prior to the procedure be-

ing performed), to help facilitate Medicaid patients

efforts to choose care providers that also offer the

best medical prices.

This budget recommends that the Health Care Au-

thority receive the same appropriation provided for

FY-2013, less savings from a complete and dedicated

implementation of Florida/Louisiana Medicaid re-

forms, less savings from the implementation of the

state employee health insurance reform. If Oklahoma

were to fully implement the Medicaid reforms imple-

mented in Florida, the total state savings per year

would exceed $700 million. This budget reflects the

savings in state funds reduced to allow for implemen-

tation of the reforms.

Reform entitlement programs




Health Care Authority

FY-2013 $ 921,983,007

Medicaid reform $ (100,000,000)


$ -


FY-2014 $ 821,430,450

Health Department

FY-2013 $ 61,783,682


$ -


FY-2014 $ 59,477,656

Health DepartmentThis budget recommends that the Health Depart-





J.D. McCarty Center

FY-2013 $ 3,740,338


$ -


FY-2014 $ 3,472,481

Mental Health and Substance Abuse

FY-2013 $ 311,421,073


$ -


FY-2014 $ 309,511,335

J.D. McCarty CenterThis budget recommends that the J.D. McCarty

Center receive the same appropriation provided for



Mental Health and Substance AbuseThis budget recommends that the Department of

Mental Health and Substance Abuse receive the

same appropriation provided for FY-2013, less savings

from the implementation of the state employee health

insurance reform.

University HospitalsThis budget recommends that the University Hospi-

tals receive the same appropriation provided for FY-


employee health insurance reform and removal of

one-time funds for a completed project.

University Hospitals

FY-2013 $ 41,624,391


Remove one-time funds for completion of a project $ (3,000,000)

$ -


FY-2014 $ 38,611,525


Department of Veterans AffairsThis budget recommends that the Department of

Veterans Affairs receive the same appropriation pro-

vided for FY-2013, less savings from the implementa-

tion of the state employee health insurance reform.

Department of Veterans Affairs

FY-2013 $ 35,698,752


$ -


FY-2014 $ 33,496,125


Office of Disability ConcernsThis budget recommends that the Office of Disabil-

ity Concerns receive the same appropriation provided



Department of Human ServicesThis budget recommends that the Department of

Human Services receive the same appropriation pro-

vided for FY-2013, plus funds to facilitate the progres-

Human Services

Commission on Children and YouthThis budget recommends that the Commission on

Children and Youth receive the same appropriation

provided for FY-2013, less savings from the implemen-


Commission on Children and Youth

FY-2013 $ 2,027,167


$ -


FY-2014 $ 1,997,691

Office of Disability Concerns

FY-2013 $ 317,607


$ -


FY-2014 $ 310,823

Department of Human Services

FY-2013 $ 586,958,664

Pinnacle plan $ 50,600,000


$ -


FY-2014 $ 629,145,148

sion toward meeting commitments for the “Pinnacle

Plan,” less savings from the implementation of the



Office of Juvenile AffairsThe Office of Juvenile Affairs (OJA) provides housing

and incarceration services for youthful offenders,

which the private sector has demonstrated it can pro-

vide at a lower cost to the state. Historically, political

and bureaucratic hurdles have prevented the in-

creased use of the private sector in this area. During

the 2013 session, lawmakers should increase the

Office of Juvenile Affairs

FY-2013 $ 96,187,205


$ -


FY-2014 $ 95,359,890

number of offenders placed under the jurisdiction of

the OJA who are placed in private facilities, in order to

achieve annual savings. This budget recommends

that the OJA receive the same appropriation provided



Department of Rehabilitation Services

FY-2013 $ 30,449,232


$ -


FY-2014 $ 29,351,018

Department of Rehabilitation Servicesprovided for FY-2013, less savings from the implementa-


This budget recommends that the Department of Re-

habilitation Services receive the same appropriation

Natural ResourcesDepartment of Agriculture, Food and Forestry


This budget recommends that the Department of

Agriculture, Food and Forestry receive the same ap-

propriation provided for FY-2013, less funding for tar-

geted earmarks and less savings from the implemen-


The total amount of targeted earmarks funneled through

the Department of Agriculture’s budget equals

$2,705,000. Based on historical median income growth,

adjusting from 2011, Oklahoma’s median household in-

come will be $51,726 for 2013. According to the Okla-

homa Tax Commission for 2013 there will be 54,811 tax

returns with an average Oklahoma personal income

tax liability of $1,375 (federal adjusted gross income of

$50,000-$54,999). Accordingly, the amount of money

given by lawmakers for targeted earmarks through

the Department of Agriculture can be compared to

approximately 1,967 taxpayers and their families that

are deprived of their hard-earned income.

Department of Agriculture, Food and Forestry

FY-2013 $ 27,610,247


Remove earmark for Oklahoma Youth Expo $ (2,200,000)

Remove earmark for Tulsa State Fair — intensely local function $ (85,000)

Remove earmark for National Finals Steer Roping Champioship —intensely local function $ (25,000)

Remove earmark for Made In Oklahoma program $ (300,000)

Remove earmark for Clem McSpadden Roping $ (25,000)

Remove earmark for Reining Horse $ (25,000)

Remove earmark for Scenic Rivers $ (20,000)

Remove earmark for Medicine Park $ (25,000)

$ -


FY-2014 $ 24,444,042


Department of CommerceThis budget recommends that the Department of

Commerce receive the same appropriation provided

for FY-2013, less a duplicative welfare program, less

targeted earmarks, less funding for the Native Ameri-

can Cultural and Educational Authority (NACEA)

(which was intended to operate on private funds), and


ployee health insurance reform. The total amount of

targeted earmarks and “pass-throughs” funneled

through the Department of Commerce’s budget

equals $7,760,236. Based on historical median in-





homa personal income tax liability of $1,375 (based on

a federal adjusted gross income of $50,000-$54,999).

Accordingly, the amount of money given by lawmak-

ers for non-core spending through the Department of

Commerce’s budget can be compared to approxi-

mately 5,644 taxpayers and their families that are de-

prived of their hard-earned income.

Department of Commerce

FY-2013 $ 29,573,212


Duplicative nutrition program, food stamp welfare services already

provided through the Department of Human Services $ (2,500,000)

IPRA National Finals Rodeo - remove funds for intensely local function $ (25,000)

Make NACEA non-appropriated, require private operational

support as originally intended $ (1,325,236)

Remove earmark for COGS general operations $ (400,000)

Remove earmark for Community Action Agencies $ (550,000)

Remove earmark for Community Action Agencies and failed Head Start Program $ (2,400,000)

Remove earmark for Rural Enterprises Inc $ (460,000)

Remove earmark for Oklahoma Center for Rural Development $ (100,000)

$ -


FY-2014 $ 21,658,578


Conservation Commission

should be eliminated. Based on historical median in-





homa personal income tax liability of $1,375 (federal

adjusted gross income of $50,000-$54,999). Accord-

ingly, the amount of money given by lawmakers for du-

plicative administration through the Conservation

Commission’s budget can be compared to approxi-

mately 631 taxpayers and their families that are de-

prived of their hard-earned income.

This budget recommends that the Conservation



the state employee health insurance reform and less

the amount spent on the 10 duplicative conservation

district offices. Conservation district offices provide

administrative services in each of the state’s 77 coun-

ties. Each county has at least one district office that

can adequately provide the administrative services

necessary for each county. As of FY-2012, there are 87

conservation district offices, with 10 providing dupli-

cative administrative support. These duplicate offices

Conservation Commission

FY-2013 $ 10,061,684

Reduce funding for duplicative conservation district offices –

10 districts w/out NRCS Office $ (868,000)


$ -


FY-2014 $ 9,119,877

Consumer Credit CommissionThis budget recommends that the Consumer Credit

Commission (CCC) no longer receive a state appro-

priation. According to its website, “the Consumer

Credit Commission is responsible for the regulation of

consumer credit sales and consumer loans in the

State of Oklahoma. The Department is also respon-

sible for the licensing and regulation of mortgage bro-

kers, mortgage loan originators, pawnshops, de-

ferred deposit lenders, rental purchase lessors,

health spa contracts, credit service organizations and

Consumer Credit Commission

FY-2013 $ 31,730

Function of government to be funded by users $ (31,730)

$ -


FY-2014 $ -

precious metal and gem dealers.” These products are

used by some and not used by others, but are not a

core function of government which should be sup-

ported by general taxes on all Oklahomans. The CCC

can be operated entirely from fee revenue of those

producing, selling, or utilizing these products. Efforts

to reduce the CCC appropriated budget were accom-

plished by lawmakers for FY-2013 and should be fully

implemented for FY-2014.



Corporation CommissionThis budget recommends that the Corporation




Department of Environmental Quality

vided for FY-2013, less savings from the implementation


Department of Environmental Quality

FY-2013 $ 7,557,973


$ -


FY-2014 $ 6,964,594

Corporation Commission

FY-2013 $ 11,324,427


$ -


FY-2014 $ 10,831,640

This budget recommends that the Department of Envi-

ronmental Quality receive the same appropriation pro-

Historical SocietyThis budget recommends that the Historical Society



ployee health insurance reform. In keeping with the “9

R’s of fiscal responsibility” mentioned in the budget

message, this budget recommends that the Historical

Society implement a plan to generate more funding

from users and private donations, so that beginning in

FY-2015 state appropriations to the Historical Society

can be reduced by 10 percent.

Historical Society

FY-2013 $ 12,502,546


Remove earmark for Wrestling Hall of Fame $ (50,000)

Remove earmark for Ft. Reno $ (47,150)

$ -


FY-2014 $ 12,225,850


Horse Racing CommissionThis budget recommends that the Horse Racing

Commission (HRC) no longer receive a state appro-

priation. According to its website, “the Horse Racing

Commission encourages agriculture, the breeding of

horses, the growth, sustenance and development of

live racing, and generates public revenue through the

forceful control, regulation, implementation and en-

forcement of Commission-licensed horse racing and

gaming.” Horse racing is an entertainment-related or

specific industry endeavor (as are the Lottery Com-

mission, Wheat Commission, Peanut Commission,

Liquefied Petroleum Gas Research, Marketing and

Safety Board, Construction Industries Board, and

many others that are non-appropriated and entirely

user supported). Horse racing is not a core function of

Horse Racing Commission

FY-2013 $ 2,072,167

Non-core function, fund by users $ (2,072,167)

$ -


FY-2014 $ -

government, and should not be supported by general

taxes on all Oklahomans. The Horse Racing Commis-

sion should be operated entirely from fee revenue

from participants. Based on historical median income

growth, adjusting from 2011, Oklahoma’s median

household income will be $51,726 for 2013. According

to the Oklahoma Tax Commission for 2013 there will

be 54,811 tax returns with an average Oklahoma per-

sonal income tax liability of $1,375 (based on a federal

adjusted gross income of $50,000-$54,999). Accordingly,

the amount of money given by lawmakers for horse rac-

ing through the HRC’s budget can be compared to ap-

proximately 1,507 taxpayers and their families that are

deprived of their hard-earned income.



Insurance DepartmentThis budget recommends that the Insurance De-

partment no longer receive a state appropriation. Ac-

cording to its website, “the Insurance Department is

responsible for enforcing the insurance-related laws

of the state. We protect consumers by providing accu-

rate, timely and informative insurance information.

We promote a competitive marketplace and ensure

solvency of the entities we regulate. We also license

and educate insurance producers and adjusters, fu-

neral home directors, bail bondsmen and real estate

appraisers.” These products are used by many and

not used by others, but are not a core function of gov-

ernment and should not be supported by general

taxes on all Oklahomans. The Insurance Department

can be operated completely from fee revenue of those

producing, selling, or utilizing these products. The

proof of this is the Legislature’s constant raiding of the

Insurance Department’s revolving funds (for $12 mil-

lion in the last three fiscal years alone). Clearly there

are adequate fees available to operate the Insurance

Department without legislative appropriations. Based

on historical median income growth, adjusting from

2011, Oklahoma’s median household income will be

$51,726 for 2013. According to the Oklahoma Tax

Commission for 2013 there will be 54,811 tax returns

with an average Oklahoma personal income tax li-

ability of $1,375 (based on a federal adjusted gross in-

come of $50,000-$54,999). Accordingly, the amount of

money needlessly given by lawmakers for insurance

regulation that can be self-funded can be compared

to approximately 1,361 taxpayers and their families

that are deprived of their hard-earned income.


Insurance Department

FY-2013 $ 1,871,937

Function of government to be funded by users $ (1,871,937)

$ -


FY-2014 $ -

J.M. Davis Memorial CommissionThis budget recommends that the J.M. Davis Memo-

rial Commission no longer receive a state appropria-

tion. According to its website, the J.M. Davis Memorial

Commission/Museum has, among other things, the

largest private gun collection in the world. Clearly it is

an important local entity, visited by some and not vis-

ited by others. But it is not a core function of govern-

ment, and should not be supported by general taxes

on all Oklahomans.


J.M. Davis Memorial Commission

FY-2013 $ 306,009

Local attraction, non-core function, should be completely user supported $ (306,009)

$ -


FY-2014 $ -


Department of LaborThis budget recommends that the Department of

Labor receive the same appropriation provided for FY-



Department of MinesThis budget recommends that the Department of

Mines receive the same appropriation provided for



Department of Labor

FY-2013 $ 3,311,160


$ -


FY-2014 $ 3,224,136

Department of Mines

FY-2013 $ 779,139


$ -


FY-2014 $ 743,113

Scenic Rivers Commission

FY-2013 $ 271,315


$ -


FY-2014 $ 258,565

Scenic Rivers CommissionThis budget recommends that the Scenic Rivers





Department of Tourism and RecreationThe Oklahoma Tourism and Recreation Depart-

ment (OTRD) is an example of an agency working

hard to use taxpayer dollars wisely. Whether it has

been the wise release of state parks with intensely lo-

cal functions, or leveraging OTRD products such as

Oklahoma Today magazine to minimize use of tax-

payer funds, the OTRD has been a recent leader for

other state agencies.

Further reform is needed. Policymakers should

eliminate any state subsidies or appropriations for

golf courses. According to the Governor’s budget

books and reports from the OTRD, from FY-2001 to FY-

2012 lawmakers have appropriated $8.2 million for

losses on state golf courses. For FY-2012, appropria-

tions for losses were more than $270,000. Operating

golf courses is not a core function of government. If it

is a worthwhile park amenity, user fees will support

the costs to operate these courses.

Earmarks for intensely local festivals or exhibits,

and promotion of the arts, are not a core function of

government and should be removed. Also, intensely

local funding for advertising and other operational ef-

forts for multi-county organizations and some local

chambers is not a core function of government.

In future years, the OTRD needs to work to dupli-

cate the success of the U.S. Forestry Service and use

the private sector (leasing operation of state parks) to

operate parks or resorts at no loss to the state, or fit

state parks so that users can adequately support parks

and resorts through fees. Those utilizing parks should

pay sufficient user fees to support their usage. Park and

resort self-sufficiency should begin to allow for further

reductions in taxpayer support beginning in FY-2015.

Based on historical median income growth, adjust-

ing from 2011, Oklahoma’s median household income

will be $51,726 for 2013. According to the Oklahoma

Tax Commission for 2013 there will be 54,811 tax re-

turns with an average Oklahoma personal income tax

liability of $1,375 (federal adjusted gross income of

$50,000-$54,999). Accordingly, the amount of money

needlessly given by lawmakers for targeted earmarks

and non-core spending through the OTRD’s budget

can be compared to approximately 1,529 taxpayers

and their families that are deprived of their hard-

earned income.

This budget recommends that the Department of

Tourism and Recreation receive the same appropria-

tion provided for FY-2013, less funds for losses on golf

courses, less earmarks for intensely local activities,

and less savings from the implementation of the state





Department of Tourism and Recreation

FY-2013 $ 21,803,003

Eliminate state subsidies for losses on state golf courses $ (271,000)

Eliminate non-core intensely local funding for multi-county organizations $ (921,506)

Eliminate non-core intensely local funding for Red Earth Festival $ (25,000)

Eliminate non-core intensely local funding for Summer Arts Institute $ (25,000)

Eliminate non-core intensely local funding for Jenks Aquarium Exhibits $ (40,000)


$ -


FY-2014 $ 19,822,314


Will Rogers Memorial CommissionThis budget recommends that the Will Rogers Me-

morial Commission (WRMC) no longer receive a state

appropriation. According to its website, the Will

Rogers Memorial Museums exist “to collect, preserve,

and share the life, wisdom, and humor of Will Rogers

for all generations. … The Will Rogers Memorial Mu-

seums are the premier destinations to introduce,

showcase, and celebrate the life, legacy, and spirit of

Will Rogers.” Clearly the Will Rogers Memorial Com-

mission is an important local entity, visited by some

and not visited by others. But it is not a core function of

government, and should not be supported by general

taxes on all Oklahomans. Legislative earmarks for the

WRMC were $740,486 for FY-2013. Based on historical

Water Resources BoardThis budget recommends that the Water Resources

Board receive the same appropriation provided for



Water Resources Board

FY-2013 $ 6,999,671


$ -


FY-2014 $ 6,891,943

Will Rogers Memorial Commission

FY-2013 $ 740,486

Local attraction, non-core function, should be completely user supported $ (740,486)

$ -


FY-2014 $ -

median income growth, adjusting from 2011,

Oklahoma’s median household income will be $51,726

for 2013. According to the Oklahoma Tax Commission

for 2013 there will be 54,811 tax returns with an average

Oklahoma personal income tax liability of $1,375

(based on a federal adjusted gross income of $50,000-

$54,999). Accordingly, the amount of money needlessly

given by lawmakers for targeted earmarks and non-

core spending through the OTRD’s budget can be com-

pared to approximately 539 taxpayers and their families

that are deprived of their hard-earned income.





Workers’ Compensation Commission

This budget provides for an appropriation for the cre-

ation and operation of an administrative Workers’ Com-

pensation Commission, to replace Oklahoma’s current

broken, adversarial worker’s compensation system.

Workers’ Compensation Commission

FY-2013 $ -

Appropriation for Worker’s Compensation Commission $ 10,000,000

$ -

Total Savings $ (10,000,000)

FY-2014 $ 10,000,000


Public SafetyABLE Commission

This budget recommends that the Alcoholic Bever-

age Laws Enforcement (ABLE) Commission receive




Department of CorrectionsLawmakers trying to be “right on crime” are mak-

ing the right moves regarding corrections reform. Ef-

forts should continue to reduce incarceration rates

and strengthen families. These and other efforts to

significantly reduce the incarceration of non-violent

offenders are what’s best for society and also save

millions in taxpayer dollars.

The Department of Corrections (DOC)—like the

Tourism Department, Office of Juvenile Affairs, and

many other state-operated services—can utilize the

private sector to reduce the cost of providing state ser-

vices. If the DOC would fully utilize the available pri-

ABLE Commission

FY-2013 $ 3,140,334


$ -


FY-2014 $ 3,098,342

vate prison beds (“halfway” houses) as authorized by

law, the state could save approximately $34 million a

year (based on state costs per bed in 2009).

This budget recommends that the DOC receive the

same appropriation provided for FY-2013, less savings

from the implementation of the state employee health

insurance reform. Lawmakers should work to signifi-

cantly increase the oversight ability of the Governor’s

office and the legislature as it relates to the DOC. Ef-

forts to increase the wise use of private alternatives

have been thwarted repeatedly by current DOC bu-

reaucrats and their insubordination must end.

Department of Corrections

FY-2013 $ 463,731,068


$ -


FY-2014 $ 458,723,195

Fire MarshalThis budget recommends that the Fire Marshal re-




State Bureau of InvestigationThis budget recommends that the State Bureau of

Investigation receive the same appropriation pro-



Law Enforcement Education and Training

This budget recommends that Law Enforcement Edu-

cation and Training receive the same appropriation pro-

vided for FY-2013, less savings from the implementation


Fire Marshal

FY-2013 $ 1,796,764


$ -


FY-2014 $ 1,772,552

State Bureau of Investigation

FY-2013 $ 13,848,059


$ -


FY-2014 $ 13,503,588

Law Enforcement Education and Training

FY-2013 $ 3,682,560


$ -


FY-2014 $ 3,634,837



Department of Public Safety

FY-2013 $ 89,894,790


$ -


FY-2014 $ 88,261,330

Department of Public SafetyThe Oklahoma Department of Public Safety (DPS)

issues thousands of drivers’ licenses per year, but us-

ers (those receiving the licenses) are not adequately

sharing the burden associated with issuing these li-

censes. According to information available publicly,

taxpayers subsidize DPS’s operation of drivers’ li-

censing by more than $12 million annually. Driver li-

censing is a direct regulatory service which should be

paid for by those being licensed. Reforms that lead to

more efficient and effective licensing, along with re-

quiring users to bear the full cost of the licensing, will

allow for the reduction in state subsidies. This budget

recommends that the DPS receive the same appro-

priation provided for FY-2013, less savings from the

implementation of the state employee health insur-

ance reform. Efforts should be taken to require users

to better share in the burden associated with drivers’

licensing.



Board of Medicolegal InvestigationsThis budget recommends that the Board of Medicole-

gal Investigations receive the same annual appropria-

tion provided for FY-2013, less savings from the imple-

mentation of the state employee health insurance re-

form. This budget also recommends that one-time funds

of $43 million be appropriated by the legislature for re-

placement of the current medical examiner’s building,

which is in desperate need of replacement.

Narcotics and Dangerous DrugsThis budget recommends that the Bureau of Narcotics

and Dangerous Drugs receive the same appropriation

provided for FY-2013, less savings from the implementa-


Board of Medicolegal Investigations

FY-2013 $ 7,198,281


$ -


FY-2014 $ 7,113,128

Narcotics and Dangerous Drugs

FY-2013 $ 3,616,418


$ -


FY-2014 $ 3,454,534


Judiciary

Attorney GeneralThis budget recommends that the Attorney General




Court of Criminal AppealsThis budget recommends that the Court of Criminal

Appeals receive the same appropriation provided for

Attorney General

FY-2013 $ 15,228,141


$ -


FY-2014 $ 15,030,348



District Attorneys CouncilThis budget recommends that the District Attorneys

Council receive the same appropriation provided for



Court of Criminal Appeals

FY-2013 $ 3,484,631


$ -


FY-2014 $ 3,450,827

District Attorneys Council

FY-2013 $ 34,187,258


$ -


FY-2014 $ 32,883,181


District CourtsThis budget recommends that the District Courts




Indigent Defense SystemThis budget recommends that the Indigent Defense

System receive the same appropriation provided for



Council on Judicial ComplaintsThis budget recommends that the Council on Judi-

cial Complaints receive the same appropriation pro-

vided for FY-2013, continuing to receive no appropria-

tions from the Legislature.

Indigent Defense System

FY-2013 $ 14,699,353


$ -


FY-2014 $ 14,582,385

District Courts

FY-2013 $ 59,600,000


$ -


FY-2014 $ 58,877,605

Council on Judicial Complaints

FY-2013 $ -

Non-appropriated $ -

$ -

FY-2014 $ -

Pardon and Parole BoardThis budget recommends that the Pardon and Pa-

role Board receive the same appropriation provided



Pardon and Parole Board

FY-2013 $ 2,217,454


$ -


FY-2014 $ 2,178,270


Supreme CourtThis budget recommends that the Supreme Court




Workers’ Compensation CourtThis budget recommends that the Workers’ Com-

pensation Court receive the same appropriation pro-



Supreme Court

FY-2013 $ 17,337,000


Reduce funds for one-time project $ (37,000)

$ -


FY-2014 $ 17,084,779

Workers’ Compensation Court

FY-2013 $ 4,247,166


$ -


FY-2014 $ 4,162,247

Rural Economic Action Plan (REAP)According to the website of the Kiamichi Economic

Development District of Oklahoma (KEDDO), “In 1996,

the Oklahoma Legislature created the Rural Eco-

nomic Action Plan (REAP). This Plan has made funds

available for each of the rural Economic Development

Districts to fund projects in communities with popula-

tion of less than 7,000 and giving priority to fewer than

1,500 residents. Oversight of the application process

is given to each of the Economic Development Dis-

tricts ...” While most projects are small, some projects

utilizing REAP funds are beneficial (road repairs)

while others more resemble political patronage, ear-

marks, and “pork” (cars, renovations for community

centers and storage buildings, etc.). Legislation in 2010

helped steer REAP funds to more worthwhile projects,

but the program still falls short in providing communities

what they really need to thrive: job creators.

The failure of government programs to generate

sustained “economic development” is nothing new.

Oklahoma needs a bold, transformational plan that

allows citizens and job creators to retain more of their

own money to invest and spend, so local communities

can attract job creators and not be reduced to reli-

ance on unsuccessful state programs that breed more

dependency. This is one of the main reasons Okla-

homa must empower local communities by replacing

its broken, adversarial workers’ compensation sys-

tem, phasing out its personal income tax. OCPA has

written extensively on the “game-changing” results if

lawmakers will replace our broken, adversarial work-

ers’ compensation system with an administrative sys-

tem. Concerning the personal income tax, as noted in

the OCPA/Laffer study, “Eliminating the State Income

Tax in Oklahoma: An Economic Assessment” (which

was deemed “well founded” by Dr. Eric Fruits and

former San Francisco federal reserve vice-president

for research Dr. Randall Pozdena), stronger economic

growth would mean increased revenues for local

governments across Oklahoma. And because there is

no static tax reduction, every dollar of increased revenue

created by Oklahoma’s stronger economy would in-

crease the expenditure power of the economic growth

estimated in the study. “Assuming local government rev-

enues’ share of personal income remains constant, in

aggregate, revenues for local governments would in-

crease by $100 million in 2013, rising to an increase of

$3.5 billion by 2022 for local governments.” Oklahomans

and their communities need to be empowered and freed

to create a thriving future. Further, lawmakers should

ensure all REAP funds are focused toward infrastructure

projects and not earmark-styled expenditures. This bud-

get recommends the REAP program receive the same

appropriation provided for FY-2013.

Revive free enterprise

Reshape the state-local government relationship


Rural Economic Action Plan (REAP)

FY-2013 $ 11,532,469

$ -

Total Savings $ -

FY-2014 $ 11,532,469


Oklahoma State University (OSU) Medical Center

OSU Medical Center

FY-2013 $ 8,080,000

Remove appropriation for final FY-2013 payment $ (5,000,000)

$ -


FY-2014 $ 3,080,000

This budget recommends that the OSU Medical

Center receive the same appropriation provided for

FY-2013, less one-time funds that were used for a com-

pleted project.


Oklahoma Council of Public Affairs

1401 N. Lincoln Blvd.

Oklahoma City, OK 73104

Tel: 405.602.1667

Fax: 405.602.1238

ocpathink.org

Documents

FY-2014 Proposed State Budget