Capitol Updates

 This week's Capitol Updates newsletter:

 

October 15, 2018

The new CEO of the Oklahoma Hospital Association (OHA), Patti Davis, has decided to advocate openly for Medicaid expansion to access federal healthcare funding under the Affordable Care Act. Oklahoma has missed out on this funding since 2012 when Governor Fallin decided to abandon any effort to claim these tax dollars Oklahoma sends to Washington D.C. In the past the OHA has been shy about using the term "Medicaid expansion," preferring euphemisms in hopes of avoiding association with the hated "Obamacare." The strategy hasn't worked because diehards against the Affordable Care Act, constantly on guard against the healthcare funding, were not fooled.

In an article published in the Oklahoman last week, Ms. Davis pointed out that "if Oklahoma were to accept federal funds to cover the uninsured, possibly through the public/private partnership Insure Oklahomaprogram as we have proposed, the economic benefit would be in the billions to our state each year." She cites an analysis by an Oklahoma State University economist in 2016, that over a 5-year period if Oklahoma had accepted federal funds for health care coverage, more than $14.5 billion would have been injected into our state's economy and more than 24,000 health care-related jobs would have been created.

Ms. Davis goes on to say, "We're all in this together. Injecting these dollars into health care is a win for education, corrections and mental health. The notion that expanding health care coverage would take money away from other areas, such as education, simply isn't true. Schools and communities suffer when citizens don't have access to vital health care services. When our citizens don't have access to mental health coverage, our jails and prisons, unfortunately, become the default. And an injection of federal dollars into health care frees up state money for other agencies.

In case you're wondering where the two major candidates for governor stand on Medicaid expansion, they were both quoted directly in another Oklahoman article by Chris Casteel on June 17, 2018, as follows:

"Kevin Stitt, a Tulsa businessman, said, 'I do not support expanding Medicaid ... Obamacare is a disastrous law that Congress should repeal and replace with a solution that encourages a competitive business climate to drive down cost for all Oklahomans and increase health care options.'"

And from Drew Edmondson: "Rejecting the Medicaid expansion funds is the worst decision the governor made since taking office," Democratic candidate Drew Edmondson said. "On my first day as governor, I'll begin the process of reversing that harmful decision."



OJA, Fallin break ground at next generation campus

Tyler Talley, eCapitol

The Office of Juvenile Affairs (OJA) and Gov. Mary Fallin broke ground Wednesday at the site of the agency's upcoming consolidated, therapeutic-centered facility in Tecumseh.
OJA is in the midst of bringing its three facilities -- the Central Oklahoma Juvenile Center (COJC) in Tecumseh, the Oklahoma Juvenile Center for Girls (OJCG) in Norman and the Southwest Oklahoma Juvenile Center (SWOJC) in Manitou - together to form a new single unified campus at the Tecumseh facility.
The girls at the Norman facility were transferred to the Tecumseh campus in August with the boys at SWOJC expected to set to eventually join them at an unspecified time.
"By having this one centralized facility, OJA will address technology inefficiencies, improve medical and treatment services, provide equitable education for all youth placed in secure facilities, and save money in transportation and travel," Fallin said in a press release.
Plans for the next generation campus include up to nine 16-bed cottages, aiming to provide a more "therapeutic environment," according to OJA Executive Director Steve Buck.
"This next generation campus demonstrates our state's commitment to providing secure, juvenile justice services in a setting specifically built to facilitate rehabilitation for young people needing this level of care," Buck said.
The agency was awarded two options for pursuing consolidation via HB2387, passed by the Legislature and signed by Fallin in 2017. The measure was unique in that it authorized two, separate financing avenues for the construction of the consolidated property.
It granted OJA permission in securing up to $45 million in bonds to help the agency consolidate its secure-care operations in an updated facility, in addition to authorizing the Commissioners of the Land Office (CLO) to assist OJA with entering a public/private partnership.
Deputy Director of Finance and Administration Kevin Clagg explained in an interview in December the agency's governing board ultimately favored a "best value" approach, opting for the bond route while still tapping the CLO for their expertise. OJA is funding the project with funds accrued through efficiencies.
Earlier this year the agency's governing board also approved $2.65 million in initial funding as to prepare for the campus' construction and additional support projects, which include the following: utility infrastructure, roadways, sidewalks, recreation areas and perimeter fence reconfiguration.
Given the overall scope of the project, multiple construction phases are expected as to ensure the campus remains operational during all construction activities. Final work on the project is projected to be completed by the end of 2020.
HB2387, by Rep. Leslie Osborn, R-Mustang, and Sen. Kimberly David, R-Porter, directs the Office of Juvenile Affairs to plan and execute a construction strategy through a best-value analysis of two financing sources. It authorizes the Oklahoma Office of Management and Enterprise Services (OMES) and the Commissioners of the Land Office (CLO) to assist OJA in assessing the best option and proceeding with necessary steps. It also authorizes OJA to pursue one of these two options based upon the input from the OJA governing board, OMES and the CLO. The bill requires a memorandum reflecting the decision of the participating agencies to be transmitted to the Governor, the Speaker of the Oklahoma House of Representatives and the President Pro Tempore of the Oklahoma State Senate by March 31, 2018, or 180 days from such date if the provisions of this act become effective as law later than July 1, 2017. It establishes procedures for best-value options. It also authorizes the Oklahoma Capitol Improvement Authority to issue obligations to acquire real property, together with improvements located thereon, and personal property to construct improvements to real property and to provide funding for repairs, refurbishments and improvements to real and personal property of the Office of Juvenile Affairs sufficient to generate net proceeds in the amount of $45 million. It specifies additional authority of the Oklahoma Capitol Improvement Authority.

General Revenue Fund collections miss estimate, top prior year in September

Shawn Ashley, eCapitol

General Revenue Fund collections from September totaled $545.1 million, the Office of Management and Enterprise Services reported Tuesday, $8.2 million or 1.5 percent, below the monthly estimate and $40.1 million or 7.9 percent above collections one year ago.
"The first quarter year-to-date numbers are running essentially flat at 0.7 percent above estimate. Additionally, strong gross revenue performance should not overshadow the fact that the FY 2019 budget was built on these estimates that we are currently matching," said Office of Management Enterprise Services Director Denise Northrup. "Simply put, the numbers we are seeing are not currently indicating FY2019 will produce a windfall."
Sales tax collections, while well below prior year, are in line with the estimate because of the anticipated transfer to the Oklahoma Department of Transportation per HB3712, which temporarily redirected allocations totaling $29 million to the State Highway and Construction Maintenance Fund and the Oklahoma Railroad Maintenance Revolving Fund, Northrup noted. The temporarily redirected allocations conclude at the end of October.
HB3712, by Rep. Kevin Wallace, R-Wellston, and Sen. Kimberly David, R-Porter, modifies the apportionment of sales tax revenue. It requires $25 million be apportioned to State Highway Construction and Maintenance Fund and $4 million to the Oklahoma Railroad Maintenance Fund for the months ending Aug. 31 and Sept. 30, respectively, and $30 million to the State Highway Construction and Maintenance Fund and $4 million to the Oklahoma Railroad Maintenance Fund for the month ending Oct. 31. The bill states it is the intent of the Legislature that the provisions of the measure are designed to restore money appropriated from the funds in SB1600.
Sales tax estimates, like all monthly estimates, have anticipated economic growth and the fiscal impact of legislation factored into their estimates, she added.
Gross production tax collections of $31.8 million were $2.2 million, or 6.5 percent, below the estimate and $9.5 million, or 42.7 percent, above the prior year. Notably, oil collections of $18,700 were $6.6 million, or 99.7 percent, below the estimate and $2.9 million, or 99.3 percent, below the prior year largely due to the timing of the apportionment changes affecting collections and should even out in the next few months, according to OMES report.
Additionally, a transfer of $19.5 million was made to the Oklahoma Higher Learning Access Program (OHLAP).
"There were multiple factors that impacted collections in September, such as the OHLAP payment, the impact of the transfer as directed by HB3712 and a timing issue with the gross production oil estimates," said Northrup. "While a few reporting categories are missing estimates, there is nothing to indicate that estimates will swing to extremes in the coming months."
Major tax categories in September contributed the following amounts to the GRF:
* Total income tax collections of $276.2 million were $21.9 million, or 8.6 percent, above the estimate and $35.2 million, or 14.6 percent, above the prior year. Individual income tax collections of $223.0 million were $131,000, or 0.1 percent, above the estimate and $28.5 million, or 14.7 percent, above the prior year. Corporate income tax collections of $53.2 million were $21.7 million, or 69.1 percent, above the estimate and $6.6 million, or 14.3 percent, above the prior year.
* Sales tax collections of $149.5 million were $475,000, or 0.3 percent, above the estimate and $23.1 million, or 13.4 percent, below the prior year.
* Gross production tax collections of $31.8 million were $2.2 million, or 6.5 percent, below the estimate and $9.5 million, or 42.7 percent, above the prior year. Natural gas collections of $31.8 million were $4.4 million, or 16.0 percent, above the estimate and $12.4 million, or 63.7 percent, above the prior year. Oil collections of $18,700 were $6.6 million, or 99.7 percent, below the estimate and $2.9 million, or 99.3 percent, below the prior year.
* Motor vehicle tax collections of $15.7 million were $1.2 million, or 6.9 percent, below the estimate and $177,000, or 1.1 percent, above the prior year.
* Other revenue collections of $71.9 million were $27.1 million, or 27.4 percent, below the estimate and $18.3 million, or 34.0 percent, above the prior year.
Year-to-date collections through the first three months of the fiscal year total $1.45 billion, according to the Office of Management and Enterprise Services. That is 118.7 million or 8.9 percent more than the same period in FY2018 and $10.4 million or 0.7 percent more than the current fiscal year's estimate.

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