|
|
FKG Legislative Report: May 23, 2010
|
|
|
Legislature and Governor Work to Pass Budget Agreement
As the week ended, House and Senate members were struggling to pass revenue bills that would finalize the agreement between the Governor, Senate President Pro Tem and Speaker. If and when the final bills pass, the 2011 budget will amount to $6.7 billion, leaving only $100 million in the State Rainy Day Fund for use next year.
The final component of the agreement (and the toughest to reach) was a compromise on cuts for education. When budget negotiations started, the governor held out for no cuts to education while the Speaker and Pro Tem wanted cuts as high as 7%. In the final compromise, the cuts agreed to were 2.9% for Common and Career Tech Education and 3.3% for higher education. To help fund the education interests, the agreement called for significant cuts to other agencies with some smaller agencies having to absorb as much as a 15% cut.
House and Senate Democrats had threatened to vote against all appropriations bills emergencies unless several revenue-raising measures were passed, most notably the proposed provider fee on state hospitals. But when the agreement was announced, the Democrats caucused and voted to support the budget deal on a “case-by-case basis.”
Once the agreement was announced, both houses began the process of passing the needed legislation to implement it. The General Appropriations bill passed both houses, and the revenue-raising measures (those bills needed to fund the GA bill) were brought to the floor of both houses. It was then that the real debate began as members of the Republican caucus in the House objected to measures that they believed were nothing more than tax increases. One of the tax credit bills passed, but was held on a motion to reconsider, and a bill that would impose a 1% fee on insurance claims also passed. Its emergency failed but was held on a motion to reconsider and will be voted on again early next week. That bill must still pass the Senate where there will be considerable opposition. That bill would provide funds to the Health Care Authority and would be used to fund increased utilization in Medicaid programs and to keep Medicaid provider rates at their current levels. If either the tax credit bill or insurance fee bill fails to pass, it would leave the General Appropriations bill short of the needed revenue to fund agencies at their maximum rates in FY-2011. Opposition to both bills has intensified this weekend and it will be interesting to see how the bills fare next week.
Another part of the overall budget agreement was the passage of SJR 61. This resolution would create an “in lieu of” assessment on Oklahoma businesses relating to intangible property. The bill is designed to correct a situation created by the Oklahoma Supreme Court when it ruled that all intangible property should be taxed. In spite of attempts of some House members to have the bill ruled out of order on grounds that its language was not germane to the original bill, the Speaker ruled that the bill was in order and the bill passed easily.
After announcing the conclusion of budget negotiations, legislative leaders expressed concerns over the agreement, especially its heavy reliance on federal stimulus dollars. But they pointed out that the legislative process depends on compromise and in the end they felt the overall agreement was beneficial to the state because it funded all important services while still leaving $100 for appropriations next year. State Treasurer Scott Meacham said that economic indicators point to renewed growth in the Oklahoma economy. He said he is hopeful those trends will continue, and if they do the state will reap new revenues next year that can help the 2012 legislature pass a balanced budget.
House and Senate leaders have indicated that the state should look at all state assets next year and try to decide if any of them should be sold in order to provide additional funding as opposed to passing further revenue increases. In addition, many Republican lawmakers reaffirmed their commitment to decreasing or completely eliminating the state income tax in order to be able to compete with states such as Texas which currently has no state income tax.
There is now only one week remaining in the session and it promises to be an eventful week. Opponents of the revenue-raising measure will descend on the Capitol in one last attempt to derail the proposed fee increases. Supporters of the budget agreement will try to get the necessary votes to finalize the accord between the Governor and legislative leaders. Failure to pass one or more of the controversial bills could lead the Governor to call the legislature back into session later this summer or fall. Ironically, it may very well be minority party Democrats in the Senate that decide the fate of the final bills. Their unanimous support of the insurance fee bill will probably be needed to assure its passage.
Things will move very quickly at the Capitol this week and FKG will be on the ground providing you frequent updates on all the activity. While the budget remains the most prominent and controversial issue at the moment, there are also many substantive measure that are still waiting to be heard. We are expecting the will be several late nights as lawmakers work to try to conclude their business for the 2010 session.
| | Posted on Sunday, May 23, 2010 | | Return |
|
|
|