Thread by @OKPolicy

Executive Director @dblattok is now presenting on the state budget. He’ll give us a look at where we’ve been, where we are, and where we’re going. #okbudget19

"The general welfare depends on economic opportunity, financial security, good health, sustainable natural resources, safe communities, and strong families. And for all of these elements of the general welfare, an adequately funded government is indispensable."

DB: However you measure it, Oklahomans overall pay among the lowest taxes in the nation. One quarter less per capita than the national average, and about $1.70 less of every $100 in state personal income than the average American.

DB: If you look at our overall tax system, Oklahoma does maintain a three-legged stool - unlike some states that have no income tax or no general sales tax. But the stool is not fully balanced. Compared to most states, the sales tax leg is relatively long in Oklahoma

DB: OK's combined state and local sales tax rate is among the highest in the nation-and the property tax leg is short-we pay among the lowest per capita in property taxes of any state.

But just because taxes overall are low in Oklahoma, it doesn’t mean that taxes are low on everyone. the poor and the lower middle-class pay a much higher share of their income in state and local taxes than the wealthy. #okbudget19

90% of all the dollars appropriated by the Legislature go to just 10 agencies in the core areas of education, health, human services, public safety, and transportation. This means that when we face budget shortfalls, there’s no choice but to cut our core agencies. #okbudget19

But just because taxes overall are low in Oklahoma, it doesn’t mean that taxes are low on everyone. the poor and the lower middle-class pay a much higher share of their income in state and local taxes than the wealthy. #okbudget19

Our tax collections haven’t kept pace with a growing economy. Throughout the 1980s and 1990s, state and local taxes in Oklahoma used to be similar to the national average as a share of state personal income. Now we’re 48th, ahead of only Florida and Tennessee. #okbudget19

There are numerous factors that have contributed to the state’s revenue problem, including economic downturns and structural changes to the economy. But decisions made by policymakers played a major role – above all, cuts to the top income tax rate. #okbudget19

The top income tax rate was 7% in 1991, still 6.65% in 2004; today it’s 5%. Latest rate cut took effect in 2016, while we struggled with a billion dollar budget deficit. The annual impact of cutting the top rate is over one billion. #okbudget19

Benefits from tax cuts have not contributed to broad-based prosperity. Less than 10% of the benefit from cutting the top income tax rate went to the bottom 60% of households, compared to households in the top 5th, who have received a full 72% of the overall benefit #okbudget19

Along with tax cuts, tax breaks have taken a big toll. Cost of major business tax breaks doubled from 2010-14. These are all having a serious impact on tax collections and the revenue available to fund our schools, health care system, etc. #okbudget19

The FY 2018 budget was shrunk by 15.6% compared to a decade ago, adjusted for inflation. State funding has shrunk 7 times in 11 years.

For a majority of state agencies, they saw their funding cut by at least 1/5th, and some were cut by close to half. All these cases, agencies less able to fulfill their mission and promote the general welfare when they have been understaffed and underfunded.

Between 2008 and last year, state aid funding decreased by $179M, while enrollment grew by over 50,000 students. If you look at the weighted number of students, which includes students with special needs, English-language learners & other factors, it has increased by over 100,000

If we consider state aid funding, which is the largest pool of money and the one the Legislature has the most control over, Oklahoma suffered the worst cuts in the nation – per pupil state aid funding was down 27% adjusted for inflation between 2008 and 2017. #okbudget19

As of now, our prisons continue to be understaffed and overstuffed – we’re at well over 100% inmate capacity, but our facilities are only staffed at 67% of recommended levels. #okbudget19

Mental health and substance abuse services have never been adequately funded in Oklahoma. The state spends $56.22/capita on mental health. Only four states spend less. And that’s less than half the national average.

Thousands of Oklahomans with developmental disabilities are waiting a decade or more to receive home- and community-based waiver services. The waiting list stands at over 7,600 people as of earlier this year and families have been on the list since 2006 – 12 years. #okbudget19

Last session, lawmakers from both parties showed some real courage and voted in favor of a package of tax increases. When revenue measures adopted in 2016 and 2017 are included, total revenue boost over $1 billion.

Thanks to these revenue increases and a strong economy, state appropriations increased by $601 million last year #okbudget19

You can see from the graph that state aid funding is way up this year – to $2.275 billion – but most of the increase was due to pay raises. #okbudget19

In addition to increases for common ed, there were other increases last year:

The state’s budget is still 9.4 percent ($788 million) below the budget of a decade ago (FY 2009) adjusted for inflation

State spending has fallen from 5,4 percent of state personal income in 2008 to 4.1 percent today

Even with last year’s increases, Oklahoma per-pupil spending is at least $1,669 below regional average

Strong economy and last year’s revenue increases are both contributing to revenues showing solid growth the past two years. We’re up 16% from a year ago, 29% from 2 years ago. December was the first month since 2010 that collections had ever topped 2009 level.

We’re now $146M, or about 5% over this year’s certified revenue estimate. Board of Equalization met in late December and considered revised projections for the full year. The projection is for the surplus to grow over the 2nd half of the current fiscal year from 4.9% to 6.5%.

You may have heard there will be $612M more next year. We think $720M is a better number to use as a starting point because some of what was available last year went for prior year supplementals #okbudget19