Jul
31
Following up on a previous post about the state’s recovery website not having updated totals on stimulus funds, OFRG contacted the Office of State Finance. We asked why the website only shows the amount received through April 30th. Drew Hall, the Customer Service and Help Desk Manager for OSF has been very helpful in explaining how some things work. He provided this response:
The information you’re asking about will be available in October - the
state’s date to deliver detailed data related to both monies received and
monies disbursed. Until then, we’re happy to update the information on the
site as it is made available to us - but we do realize it isn’t yet a
complete picture. I can understand how the fiscal year would seem to be
a logical update point - however the Federal guidelines established
October, and the state has been working toward meeting that goal almost
from the inception.
In light of the fact that Governor Henry has said, “complete transparency is essential to ensure public confidence” when it comes to stimulus funds, perhaps the state should go above and beyond federal requirements. Waiting six months to post money received by state agencies does not measure up to “complete transparency.”
We’ve already found out by contacting the agencies on the list that additional money has been received. How come the state can’t put that information on its stimulus website?
Governor Henry is on the record saying, “Oklahoma taxpayers need and deserve to know how every dollar will be spent in our state. By posting all information on the web and having the auditor oversee the process, we can bolster public trust and ensure an informed citizenry.”
The public would be more trusting and informed if the amount of stimulus dollars received by state agencies was posted monthly on the recovery.ok website.
Jul
30
It’s the gift that keeps on taking
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The City of Tulsa is considering whether to accept $3.5-million in federal stimulus dollars to hire 18 additional police officers. As the Tulsa World editorial board points out, that “gift” of $3.5-million will actually cost the city more than $2-million when all is said and done.
The problem is Tulsa having to come up with the $844,000 this year for equipment for the new officers and then $1.25-million for the salaries in the fourth year. Tulsa is already forcing city employees - including existing police officers - to take eight unpaid furlough days this year to make ends meet. How do you tell those workers that you don’t have enough money for a full year’s salary, but you do have enough to hire 18 police officers?
It shows the problem with the federal stimulus program. Most of the money is not really targeted towards stimulating the economy, it’s putting the nation deeper in debt and requires cities and states to make commitments that may not be in their best interests.
The Tulsa World has it right in this case: Tulsa should reject the federal money because the attached strings are more than it can afford.
Jul
29
Are we learning from our mistakes?
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After seeing a ten-fold rise in oil and gas revenues from 1972 to 1982, Oklahoma suffered through the oil bust that saw jobs eliminated and banks going under. Today, we have state officials talking about possibly needing the Rainy Day Fund to help the current budget in part because oil and gas prices are lower than expected.
It shows an inherent flaw in the way the state budget is developed. An estimate on the price of oil and natural gas is made months before the fiscal year starts and that is used to calculate how much oil and gas revenues will come in. But as Treasurer Scott Meacham points out in the article, it’s not just a question of price, it’s a question of volume so the state takes a double hit when prices are low like right now.
Gross production revenue is the third-largest source of money for the state’s General Revenue Fund behind income taxes and sales taxes. The $718-million collected in the fiscal year that just ended is 13% of the total. So 13% of the state’s General Revenue Fund is based on calculations of supply and demand in oil and gas made months ahead of time - essentially a guess.
The current fiscal year is based on the assumption that natural gas prices will be $5.22 per 1,000 cubic feet. That price is currently below $4.00 and has been declining all year.
Before considering any use of the Rainy Day Fund, state agencies need to start cutting back on spending now. The Rainy Day Fund is a nice cushion to have, but it’s not there to allow frivolous spending to continue. In a perfect world, agencies would be able to cut enough unnecessary spending now so that no Rainy Day money would be needed. If the Rainy Day Fund is tapped for use in the current fiscal year, it will mean less money available to help the 2011 budget and, more importantly, the 2012 budget which will NOT have any federal stimulus dollars to close gaps.
Now is the time to make cuts. Cutting spending now means the cuts won’t be as drastic later. And it means that less Rainy Day money will have to be used if that turns out to be necessary.
The situation could turn around quickly. After all, the state was running a surplus in the first six months of last year and ended up with a deficit. But taxpayers can’t afford to wait to see if things get better. Let’s start the cuts now to get Oklahoma in an excellent position to weather the storm.
Jul
27
If you look at the state’s webpage dealing with stimulus dollars, you’ll find a tab about Accountability and a link to “funds received by state agencies.” But the problem is that this data is woefully out of date.
While it says it was updated in June, the figures posted are only through April 30th and, as we have noted before, we know that more money has been received by the agencies listed and presumably additional agencies have received funds. The website says it will “ensure Oklahomans have the most up-to-date information available” yet our blog has more up to date information we got from contacting agencies, so it would appear the state is not doing all it can in the area of transparency and accountability.
We have contacted the Office of State Finance about when the website will be updated. We’ll let you know what the response is. The fiscal year ended June 30th, so there should be information on how much stimulus dollars were spent up to that point. In a perfect world, the table would be updated monthly or even more often than that, if possible.
The taxpayers of Oklahoma were promised up to date information. So far, the state is falling short on that promise.
Jul
16
Finally HERE!
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The address is the same, but there’s a whole lot more to see at our new website!
We’ve added several new features including videos and podcasts, links to our social networking profiles and important resources across the web. It will truly be one-stop shopping for all of the latest information on transparency, accountability and fiscal responsibility in state government and across Oklahoma.
We will be adding new things as we continue to improve our online communication tools and would love to get your input on the site.
Please look around and tell us what you think. Sign-up for our e-newsletter, The Rotunda, on the top menu bar and stay updated with our Taxpayer Team Alerts on Twitter by following @OFRGalerts.
We are excited about the changes ahead and look forward to everyone helping us build upon our mission.
Jul
14
During this year’s state budget negotiations, some left-wing groups called for tapping the Rainy Day Fund to help make ends meet. Here at OFRG, we advised against this for two reasons. First, it’s a better idea to cut spending than dip into savings. Second, it would be nice to have a full Rainy Day Fund in case the financial picture over the next year was just as bad or worse.
Today, State Treasurer Scott Meacham says it may be worse. The final numbers are in for the fiscal year that ended June 30th and revenue collections for the year dropped more than 7%. Luckily, the state is spending only 95% of expected revenues, so there was a cushion built in that helped the state, but it was still a significant shortfall.
Treasurer Scott Meacham calls a revenue shortfall for Fiscal Year 2010 “probable” and will begin working with state agencies to possibly reduce expenditures starting now to prepare for this possibility. This is a good move since it makes far more sense to make small adjustments over an entire year instead of large ones next spring when there are only a few months left in the fiscal year.
The situation brings into focus why the state has a Rainy Day Fund. It’s not to help agencies spend the same amount or more as a previous year, it’s to reduce the impact of what would otherwise be drastic cuts. If the legislature and Governor Henry had listened to those on the left, there would be $375-million in the Rainy Day Fund instead of more than $600-million and the state would have a larger budget hole to make up next year because agencies wouldn’t have had to make cuts.
Before we start depleting the savings account, why not perform a top-down study of every agency to weed out waste, fraud and abuse? Surely taxpayers deserve to know that the money currently being spent is done in a proper way that helps the public before the Rainy Day Fund is used. During his meetings with state officials, Treasurer Meacham needs to hold every agency accountable for the money its spending. Not only should non-essential spending be cut, it should be eliminated altogether. The state can’t afford to dip into the Rainy Day Fund because some agency decided to attend a conference in Las Vegas or the Bahamas.
As Treasurer Meacham points out, revenues for the last six months were more than $600-million below estimates, so think about that trend continuing with a smaller Rainy Day Fund. Only when budgets are down to the point where cuts will affect actual services should discussion of the Rainy Day Fund start.
There are plenty of stories in the media about families having to tighten their belts to get through tough economic times and the state is no different. It doesn’t make sense for a family to dip into savings to support a lavish lifestyle. A better option is toning down the lifestyle to a level that can be afforded with less money and then when a disaster happens, use the savings. In the same way, state lawmakers were right to make state agencies work with less money so that the Rainy Day Fund can be saved for use if revenues continue the current trend.
Jul
13
Better prisons? Not if SQ 744 passes!
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Oklahoma needs to spend in excess of $500-million on prison construction and renovations according to a study the state commissioned. House and Senate Republican leaders say there are problems with the study because it didn’t look at the possibility of buying an already-built private prison. But even that is going to cost money.
The point is that State Question 744 proposes to shift $938-million out of the General Fund which pays for nearly everything in state government, including the Department of Corrections. By our calculations, every single state agency would need to be cut more than 20% to fund the money shift since SQ 744 does NOT have a funding mechanism.
In other words, you can kiss any possibility of new prisons goodbye which means violent criminals will continue to overcrowd facilities or they will be released to roam the streets.
Jul
10
It seems strange that a government agency that has the current State Auditor on its commission and was overseen by a former State Auditor could not know that an employee was embezzling money, but that’s what was happening at the School Land Office.
The commissioners, which include State Auditor Steve Burrage and Governor Brad Henry, are asking four companies that submitted bids for an audit to alter their proposals to make it more in-depth in light of the embezzlement, according to an article in The Oklahoman. While we agree that the audit is necessary, it makes you wonder why, after all the scandals that have hit the state over the last 20-years, that the audits always seem to happen after the problem is found.
The article explains that the Land Office is not regularly audited by the State Auditor’s office because the Auditor sits on the commission. Perhaps it would be a good idea in the future to not have the Auditor sit on the commission of any agency so that all agencies (except his own) can be audited by his office.
According to it’s annual report for 2008, the Land Office had a net income of about $200-million last year and the Permanent Fund grew to over $1.5-billion. And all of that is not subject to a state audit? Yes, audits are done by outside firms, but not to the level that the state can - and should - perform.
OFRG has long advocated for state lawmakers to do in-depth studies of state agencies during budget hearings to see how much spending can be eliminated because of waste, fraud and abuse. Apparently the state also needs in-depth audits of every state agency to look for fraud as well. Prosecutors say nearly $2-million was embezzled from the Land Office and the state is going to get little, if any, back.
Taxpayers (and royalty payers) are not an infinite source of funds. Their money needs to be protected, not wasted. It’s time to get serious about opening the books of government to scrutiny before there’s another scandal to clean up after.
Jul
10
An interesting post at the Oklahomily blog about the 1,200-page Energy bill that passed the U.S. House of Representatives with little time for members to read it.
Notice all the details coming out AFTER the bill has passed. Makes you wonder if it would have received the 219-votes if all this was known ahead of time. Why is there a waiting period to buy a gun but not to read a bill that affects every American taxpayer?
Jul
9
The Prue School District northwest of Tulsa will be going to a four-day week this coming year as a way to save money according to an article in the Tulsa World. This is possible thanks to a new law that calculates the school year based on the number of hours of learning instead of the number of days.
The change means that the district saves on costs like busing students and electricity since school will be in session fewer days per week. It also means that classes will be slightly longer, giving teachers a bit more time to teach before the bell rings. For parents, doctor or dentist visits can be planned for Fridays, meaning less school will be missed by students.
Time will tell whether it’s a successful plan, but it shows that when given flexibility, districts will take advantage of it to fit their needs. In a small district like Prue, going to a four-day week may mean more money ends up educating children. Or at least that fewer cuts have to be made in these tough economic times.
There is no one-size-fits-all solution for education and what’s good for one district may not be practical for others. The goal for the state should be to have policies that allow districts to choose the best option. Here’s hoping the next legislative session can build on that formula.
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