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 Saturday, September 04, 2010
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FKG Legislative Report: May 15, 2010
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Partisan Bickering Slows Process
The Legislature and Governor have reached that point in the session when the Speaker, Pro Tem and State Treasurer (on behalf of the Governor) are trying to find common ground on the last of a series of agreements that will allow them to finalize the 2011 budget. They have settled into a routine of meeting for an hour or two, and then breaking so their staffs can run new numbers and so legislative leaders can meet with their respective caucuses. While the majority party works with the Governor, the Democrats have been holding a series of press conferences in an effort to push the Pro Tem and Speaker into supporting various new revenue enhancements. A lot of this is nothing but political posturing, of course, but it is the process that members go through each session as they wind down to sine die adjournment.
In one of the press conferences House and Senate Democrats endorsed the idea of placing a provider fee on state hospitals in order to raise a significant amount of new money. Early indications were that the Governor supported the fee and House members were at least willing to give it serious consideration; but Senate Republicans, led by Pro Tem Glenn Coffee, continued to oppose it. There is a question of whether the hospital measure would be considered a “tax” as described in the Constitution. The answer to that question is important because tax increases must either be approved by a vote of the people or receive a three-fourths vote in each house of the legislature. Sen. Coffee has maintained that it would be a tax increase and says that he doesn’t believe there are enough votes in the Senate to reach a super majority approval. Democrats, on the other hand, do not believe it would qualify as a tax increase and say that it would only need a simple majority to pass. Sen. Coffee points out that even if the Democrats are correct, it is almost certain that there would be a lawsuit filed to resolve the issue, in which case the issue could remain unresolved for some time.
It was interesting to note that at the press conference, the Democrats said they were “united in support of the provider fee to offset cuts to education, health care and other areas.” The fact that they propose utilizing the fee to help fill cuts planned in education causes many legislators (and health care providers) concern that the fee would be placed on hospitals and siphoned off to fund other areas of state government. In addition, many Republicans now oppose dealing with the issue because the Democrats have threatened to shut down government unless the hospital fee is passed. It has become a classic partisan standoff.
In a related issue, some legislators have suggested that the cap on the state’s Quality of Care Fee (the provider fee on nursing homes initially passed in 2000) should be lifted. That action would also raise additional money. But nursing home interests want to be assured that the revenue would help their homes and that they would not be strapped with yet another fee without realizing the benefit of the new revenue. Nursing home industry leaders have told legislators that they want to know where the QCF funds would go before they lobby to take the cap off. Nursing home leaders are withholding their full support until they see what cuts are being planned for the Health Care Authority. Discussions with the Health Care Authority will be held early next week to try to determine how the agency would utilize any new revenues generated by lifting the Quality of Care fee.
At the end of last week, the Governor and legislative leaders were $1.1 billion short when trying to balance the budget. However, they have apparently agreed on further uses of Stimulus monies, Rainy Day funds and a few non-controversial revenue enhancements, the result being that they have narrowed the gap to under $300 million. While that is still a sizeable amount, it is a far cry from the $1.1 billion they originally faced. Of course, the use of the additional money will put more pressure on next year’s budget when most of the Rainy Day Fund and Stimulus dollars have been spent.
On the state revenue front, it appears the state’s economy is turning around, but there is still a long way to go before the lost revenue to the state is recouped. April revenue collections showed that personal and corporate income tax collections generated $249 million. That figure is 11.5% less than the prior year’s collections and 21.5% below state estimates. But sales tax collections are up 6.4% over last year and gross production tax revenues are 65.8% higher than last year.
The budget situation is very fluid. The leadership and Governor could very well reach agreement early next week or the impasse could go on for some time. It is possible that House and Senate Democrats will vote against the emergency provisions of many appropriations bills until they get more revenue enhancements passed. And a special session remains a possibility. If a special session is required, it would likely mean that negotiations between the Governor and legislative leaders would continue in June. Those negotiations would almost certainly be held behind closed doors. When an agreement was reached, the legislature would return for anywhere from one to five days to finalize the 2011 budget. We’ll report on that and any other issue that surface in the next few days.
To date, only one revenue enhancement bill has come out of the budget negotiations. SB 1590 proposes a moratorium on two tax credits and was approved by both the House and Senate general conference committees on appropriations during the week. The measure establishes a moratorium on tax credits for qualified investments in small business capital companies and qualified investments in small business ventures from June 1, 2010, through Dec. 31, 2011.
Leadership continues to say there will be additional revenue enhancements that will be part of any budget agreement. We are told there is a fairly significant list of other tax credits being considered for moratoriums. We also understand that, at least at this point, before a measure impacting an enhancement will be heard in GCCA, there must be an agreement to pass the bill from both sides of the rotunda.
Other activity this past week included the Senate’s approval of the Statistical Abortion Reporting Act, requiring the Department of Health to collect certain information on women who obtain abortions. HB 3284, passed 32 to 11 and is headed to Governor Henry's desk for his consideration. The bill mirrors language approved in 2009 that was later found unconstitutional because it violated the “one subject” rule.
Also moving this past week was a bill to limit insurance coverage for abortions.
Over objections that the language provided inadequate exceptions for certain medical situations HB 3290 passed the House.
Last Tuesday, the House attempted an override of the Governor’s veto of a bill that would have prohibited the use of radio frequency identification tags on driver’s licenses. HB 2569, would prohibit the Department of Public Safety from applying any radio frequency identification tag or ink to any driver license or identification card. The override motion failed in a vote of 69 to 19. A three-fourths vote was required because the bill has an emergency clause. In his veto message, the Governor stated it was not in the best interest of the state or its citizens to ban the use of a specific technology that could provide benefits in the future.
On Friday the Governor vetoed two additional bills, one allowing for open carry of firearms and the second authorizing a lawsuit involving federal health care legislation. Lawmakers are threatening to attempt an override on both bills.
Citing the high cost of potential litigation, Governor Henry vetoed HJR 1054 which amended Oklahoma Statutes to prohibit a resident of the state from being required to obtain or maintain a policy of individual insurance coverage. It also would have authorized the Senate President Pro Tempore and House Speaker to employ legal counsel to file a lawsuit against the U.S. Congress, the President and the Secretary of the U.S. Department of Health and Human Services to prevent the provisions of the Patient Protection and Affordable Care Act from taking effect. The veto message states that the bill would have prohibited the state from abiding by federal law and engaged the state in a legal battle it can’t win. A veto override will require a two-thirds vote in each chamber, or 68 votes in the House and 32 votes in the Senate. A similar measure is making its way through the process – SJR 1059 would take the issue to a vote of the people, bypassing the Governor.
Highlighting public safety concerns, Governor Henry also vetoed HB 3354. The measure, which passed 74 to 24 in the House and 33 to 15 in the Senate, would have allowed persons possessing a valid handgun license to carry concealed or unconcealed handguns into certain places.
Among the bills signed by the Governor last Friday:
• SB 1919 allows a tax credit for tax years beginning after Dec. 31, 2010, for any taxpayer who makes a donation to a cancer research institute. The bill takes effect Jan. 1, 2011.
• SB 1998, by Sen. Dan Newberry, R-Tulsa, and Rep. Fred Jordan, R-Jenks, allows boards of county commissioners to construct, improve, repair or maintain any streets of a municipality with a population of less than 5,000, subject to an agreement between the county and municipal governing bodies, without regard to whether the municipality has passed a sales tax with proceeds earmarked to construct, improve, repair or maintain any of the streets or roadways of the municipality.
• SB 2210, by Sen. Cliff Branan, R-Oklahoma City and Rep. Daniel Sullivan, R-Tulsa, prohibits the spouse of a package store license holder from holding another license provided for pursuant to the Oklahoma Alcoholic Beverage Control Act, except a package store license. The bill also allows package stores to remain open on election days and authorizes the sale of alcoholic beverages by the drink on election days, provided the election day does not occur on a day when such sales would otherwise be prohibited.
There are two weeks remaining in the session and all indications are the Legislature will not adjourn sine die until the constitutionally mandated 5:00 pm on May 28th. Many bills are still in conference and will we will see a large number of Conference Committee Substitutes emerge this week. FKG will be at the Capitol following all the activity and will provide immediate updates as new language becomes available.
| | Posted on Sunday, May 16, 2010 | | Return |
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