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FKG Legislative Report: May 1, 2010
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Legislature, Governor Turn Attention to FY-2011 Budget
With only four weeks remaining in the 2010 legislative session, leaders of the House and Senate this week began serious negotiations with the Governor on the FY-2011 budget. Although there has been a great deal of progress to this point in the writing of agency budgets, the final hurdles to an acceptable compromise will be the hardest to jump. Final decisions must be made on which, if any, of the governor’s revenue enhancement ideas will be accepted by the House Speaker and the Senate President Pro Tem. Getting agreement between the state leaders might end up being the easiest part of the task. If fee increases are used to balance the budget, rank and file House and Senate members might balk, not wanting to raise fees right before they go home to campaign for reelection.
The ability to reach an acceptable budget compromise seems to be turning on a few points. First, a final agreement must be reached on the amount of revenue that will be spent this year. Leaders will be looking at the General Revenue Fund, the state’s Rainy Day Fund and Federal Stimulus monies when they make their final determinations. On top of that, the governor’s new revenue enhancement suggestions could add anywhere from $1 million to $1 billion in new money. No one expects all of the governor’s ideas to be agreed to by the legislature, but if even half of them are used, the revenue picture could improve by as much as $500 million for the coming year.
As of this writing, the governor seems determined to hold common education funding harmless…meaning he does not want any further cuts in the common school budgets in the coming fiscal year. That presents a problem for all other state agencies due to the huge amount of funds the common education budget consumes. Legislative leaders have pushed for a modest reduction in the common school appropriation in order to protect the budgets of the other agencies in the state.
So the most crucial compromise that must be reached concerns two questions ― how much additional revenue can be gained through new revenue enhancements? And how much will the common education cuts be……if any?
The issue of whether to take the cap off the existing nursing home Quality of Care Fee is still being considered. The legislature placed a QCF on all facilities in 2000 and the homes have lived off the fee for the past decade. A cap was placed on the fee four years ago. One idea to generate more revenue has been to abolish the cap and let nursing facilities benefit from the increased amount of Medicaid that would be generated. At that point, the state would simply follow federal law as to the amount that could be generated each year. The QCF issue along with a possible look at a hospital provider fee will part of the budget discussions for the remaining four weeks of the session.
To date, the Governor has vetoed eight bills this legislative session. Two of those vetoes have already been overridden, and it appears there could be additional override attempts made this week. The House and Senate last week overrode the vetoes on to two abortion-related bill. On Tuesday, the governor vetoed another bill, this one proposing the exemption of Oklahoma-manufactured guns from federal regulations.
Other issues still on the front burner are a solution to the intangible property tax problem precipitated by a State Supreme Court ruling last fall, workers’ compensation reform, expanding the ability to create charter schools, common education deregulation, and providing loan repayment assistance to physicians serving rural and underserved areas of the state.
The working group on the intangible tax issue continues to meet each week and reportedly an agreement has been reached regarding a solution to the issues created by the Supreme Court decision. Watch for special tax alerts from FKG on this issue.
Several bills dealing with workers’ compensation reform are making their way to conference committee. It is our understanding there will be one major reform bill that will be ultimately considered by the legislature. At this point it appears that bill will be SB 1973.
On the education front, HB 2753, which modifies the Oklahoma Charter Schools Act has moved to conference committee. It adds language allowing a school district that has a school site listed on the school improvement list under No Child Left Behind to sponsor a charter. It also allows a technology center school district to sponsor a charter only if it is located in a districted served by the technology center and only if the school district has a site listed on the school improvement list.
As always seems to be the case this time of year, there is some talk of a special session sometime this summer to address budget issues not resolved during the regular session. Members of both parties want nothing to do with that idea because they want to be able to concentrate on their reelection campaigns, but if a compromise is not reached before May 28 they will have no choice but to come back and finish their work.
Now that both houses have finished their deadlines for considering bills from the opposite house, the focus of the session turns to conference committee work. It is there that differences between the House and Senate on many pieces of legislation will be resolved. Conference committees are usually very small and do not hold formal meetings. Because of that, the first time most people see bills coming out of conference committees is when they show up on the floor of the House and Senate. Some bills, of course, were not heard before the last deadline. Those bills are probably dead for the session, although it must be pointed out that some of the language in those bills could wind up in other bills still to be considered. One bill that didn’t meet the deadline was Senate Bill 1597 that would have established term limits for members of boards and commissions. The House refused to hear the bill on the floor and, therefore, it is now considered dead.
FKG will be following the activity on legislation still alive at this point and will advise you of any significant language that shows up in any conference committee report. We will be watching very closely for langue that previously “died” but ends up being added to a bill in conference.
| | Posted on Sunday, May 02, 2010 | | Return |
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