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The health care reform bill in the U.S. House of Representatives is over 1,900 pages long.  If it takes you two minutes to read a page, it would take you more than 63-hours of non-stop reading to get through it all.  That’s two-and-a-half days with no sleep.  Compare that to the First Amendment to the U.S. Constitution:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Perhaps tongue-in-cheek, some are suggesting a constitutional amendment to limit the length of bills in Congress.

But there is a danger in complex bills that run hundreds of pages: it allows the opportunity for loopholes aimed at special interests.  The longer a bill, the more “stuff” that can be thrown in to make sure someone gets extra benefits.

Government transparency is about more than just seeing how the money is spent.  It’s about allowing the average person to know what their government is doing so that they can let their elected representatives know how they feel on the issue.  And there probably aren’t many average people who can spend two-and-a-half days reading a health care reform bill.

We want to share our thoughts and prayers for a colleague and his family this afternoon.  Brandon Dutcher, VP at Oklahoma Council of Public Affairs, his wife and children are in Dallas for treatment of their new born daughter, Anne Marie, who has pulmonary hypertension and is having a very important surgery today to repair a diaphragmatic hernia (www.brandondutcher.blogspot.com). 

Our prayers are plentiful and we know God is with you!

Bless Anne Marie.

That’s a phrase that dates back to the start of computers that essentially means that you can’t trust what a computer program gives as results if the information going into it is questionable.  The same can be said for the jobs created/saved figures from the federal stimulus package.

After early reports of 30,000 jobs saved, the Associated Press now says that figure is overstated by at least 5,000 and probably more.  The problem comes because the figures the government is giving as output is based on numbers it gets from the companies getting the contracts.  The AP reports some companies are reporting jobs being created when in reality employees were simply getting a raise.  Other companies have overstated job creation by a factor of 10.

Government transparency is only as good as the data provided.  Right now it appears there’s a little too much garbage in that data.

If you’ve been to the state’s Recovery web site recently, you’ll notice there’s a bit more information than there used to be.  But as of yet, it’s not the detailed information taxpayers have been promised.

State Finance Director Michael Clingman tells OFRG that the detailed spending should be up next week sometime, but the problem is on the federal side.  He says they were changing things as recently as two days ago.

One interesting tidbit from the data, though, is the claim that 54 jobs were created or saved in the third quarter of 2008.  It’s unclear how jobs could be created by stimulus dollars six months before the stimulus bill was passed.  OFRG has requested an explanation of that and we’ll let you know as soon as we do!

There’s an interesting statement on the website supporting State Question 744:

HOPE reduces class sizes so kids receive the individual attention they need.

It’s interesting because there is nothing in state Question 744 about class size.  There is also nothing about technology spending, individual attention, more teachers, higher teacher pay, better education outcomes, lower dropout rates or more students prepared for college.

SQ 744 does not let taxpayers see how the money is being spent and doesn’t mandate that a single dollar of it has to end up in the classroom.  SQ 744 has no funding mechanism meaning cuts to all other agencies, higher taxes or both.

All SQ 744 says is that lawmakers in Texas, Missouri, Kansas, New Mexico, Colorado and Arkansas will determine how much Oklahoma spends on education and that the amount spent can never go down, even during a financial crisis when all aspects of government have to tighten their belts.

But don’t take our word for it, OR the OEA’s word, either.  Just read SQ 744 as it will appear on the ballot for yourself and decide what it says and (more importantly) doesn’t say:

The measure repeals a Section of the State Constitution. The repealed section required the Legislature annually to spend $42.00 for each common school student. Common schools offer pre-kindergarten through twelfth grade.The measure also adds a new Article to the Constitution. It sets a minimum average amount the State must annually spend on common schools. It requires the State to spend annually, no less than the average amount spent on each student by the surrounding states. Those surrounding states are Missouri, Texas, Kansas, Arkansas, Colorado and New Mexico. When the average amount spent by surrounding states declines, Oklahoma must spend the amount it spent the year before.

The measure deals with money spend on day-to-day operations of the schools and school districts. This includes spending on instructions, support services and non-instruction services. The measure does not deal with money spent to pay debt, on buildings or on other capital needs.

The measure requires that increased spending begin in the first fiscal year after its passage. It requires that the surrounding state average be met in the third fiscal year after passage.

The measure does not raise taxes, nor does it provide new funding for the new spending requirements.

 

 

Add another large group to the list of those opposing State Question 744!  The Enid News and Eagle has a story today quoting Oklahoma Public Employees Association Executive Director Sterling Zearley,

“This is going to be a crucial, crucial election,” Zearley said. “If you think we’re in bad financial shape now, wait until they pass that.”

With OPEA against State Question 744 along with lawmakers of both parties and the Oklahoma Farm Bureau, it makes you wonder who out there is supporting it.  Other than the OEA which drafted it, got it on the ballot and would benefit directly from it.

In an Edmond Sun article on State Question 744, Lieutenant Governor Jari Askins said,

From conversations I’ve had with some of the individuals that signed the HOPE petition, they’ve said if they’d had a crystal ball and had been able to look down the road to see what was happening in the economy — not just here in Oklahoma but nationwide — their timing for this might have been a whole lot different.

But here’s the problem with that statement: the timing will never be right for State Question 744!

Let’s say that SQ 744 was already in effect and that lawmakers had appropriated enough money to education to reach the regional average for per-pupil spending.  With revenues coming in below expectations for the first three months, the Office of State Finance (OSF) would not have been able to take the action it already has: cutting monthly allocations by 5% and using cash reserves to make up the rest.  SQ 744 mandates that Oklahoma has to spend, not appropriate, as much as the regional average.  So there couldn’t be across-the-board 5% cuts to all agencies because Common Education could not be cut under SQ 744!

So if Common Education can’t be cut, all other agencies would have to take a cut twice as large since Common Ed would take up nearly 50% of the budget.  In a time of economic crisis when state government needs to pare down spending, the single largest expense to state government would be off the table.  How is that good timing?

The OEA’s response is that “the numbers are what they are” and that average growth will take care of everything.  Assuming that the economy will be better every year is partly what got the country into the economic mess it’s in right now.

Reports are already coming in that federal stimulus funds have saved or created over 4,000 jobs in the state.  The devil, though is in the details.  Specifically, the math.

According to the President’s Council of Economic Advisors, job reporting is based on what those getting the money tell the federal government:

As the recipient reports are received, agencies, OMB and CEA will check the data for completeness and plausibility. This process will involve numerous steps, including:

• Comparing reports of similar projects in different locations to identify obvious outliers.
• Comparing recipient reports to other labor market indicators for the area.
• Comparing recipient reports of job creation with estimates of expenditures and local wage rates to test for consistency.

In cases where the results appear to be problematic, agencies will ask the reporting recipient for more information and, if necessary, revisions to the reporting methodology.

That would appear to mean that if numbers are made up, but seem plausible, no one will check them.  According to recovery.gov, there have been over 112,000 contracts and grants awarded so far.  If each one overstated the number of jobs created by just one - which would still make the number plausible - that would seem to cast doubt over any claims about job creation.

As for state government jobs, like the number of education workers pointed out in the Tulsa World article, again it’s based on a formula.  Agencies create a hypothetical baseline consisting of the number of hours worked had there been no Recovery funds, compare that to the number of hours worked with stimulus dollars in place and claim that the difference is saved jobs. 

But doing that assumes that the state would not have used Rainy Day funds to help education.  Doing that assumes that jobs would have been where the cuts were made instead of travel or equipment.  Never mind that if two part-time workers are let go in favor of hiring one full-time employee elsewhere, the calculations say no one lost their job.

If we are going to believe any claims made about jobs created or saved, those making the claims need to show their math.

A hat tip to the Dustbury blog for linking to this Tax Foundation posting that ranks states based on the average state and local sales tax rates.  Here’s the map:

 

 

As you can see, Oklahoma has the fourth-highest rate in the country at 8.44%, behind only Tennessee, California and Washington.  The regional average of surrounding states is 7.16%.

It seems strange that the same item would cost more in Bixby than Boston and more in Drumright than D.C.

Some members of the Oklahoma House are talking about the need to cut more than 5% from agency budgets because of continuing revenue shortfalls, according to an article in the Oklahoman.  House Speaker Chris benge and House Appropriations and Budget Chairman Ken Miller both say that cuts beyond 5% may be needed.  This makes sense when you look at the magnitude of the numbers.

Through the first quarter of the fiscal year, revenue collections are $388.3-million below estimates.  If you assume that trend continues for the entire year, that would mean the state would come up over $1.5-billion short.  A 5% reduction in spending across the board will save about $250-million, but that still leaves the state $1.3-billion short of the money needed in the current fiscal year.  Yes, the state has a Rainy Day Fund and stimulus dollars left, but add those up and you still get only $1.2-billion, leaving nothing available for 2011 or 2012.

Ever since the first revenue reports came in for this fiscal year, OFRG has been calling for cuts greater than the 5% enacted by the Office of State Finance.  When revenues are coming in more than 25% below estimates, a 5% cut just isn’t going to be enough.  The earlier cuts are made, the more they can be spread out over an entire year.

Taking three months’ worth of data and expanding it to a year’s worth is dangerous business.  After all, the state was running a large surplus at this point last year and we know how that turned out.  So it’s possible that the situation will improve and revenues will start to exceed estimates to the point where no further cuts are needed.  But consider that State Treasurer Scott Meacham is on record saying that the 5% monthly cuts in allocations are likely to remain for the entire year and he could not say whether the state has reached the bottom of the economic cycle yet. 

Doesn’t it make sense to cut a little more now and fill it in if the economy turns around rather than cut less now and make larger cuts later?

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