Archive for the ‘CAP’ Category

Introducing the Oklahoma Policy Institute

May 6, 2008

We received an email from David Blatt yesterday. Mr. Blatt, who was formerly with the Community Action Project of Tulsa, is now the Director of Policy for a spin off organization from CAP called the Oklahoma Policy Institute. According to Blatt, the mission of the Oklahoma Policy Institute is to “advance policies aimed at alleviating poverty, promoting fiscal responsibility, and expanding economic opportunity.”

From the email:

“To that end, we will conduct objective analysis of state policy issues to position Oklahoma to become a more prosperous, better educated, healthier, and increasingly equitable state. Our work spins off from the public policy department of Community Action Project of Tulsa County (CAP), but with an independent Board and new leadership.

Although their positions are a little left of center from ours, we nevertheless wish them all the best!

Related:

OKPolicy.org: Issue Brief: On the Brink: Oklahoma Families Are Already Facing Tough Times (May 2008)

CAP: New Revenues from “Sin Taxes” Erased by Tax Cuts; Long-Term Funding Gap Widening

December 10, 2007

(Tulsa, OK) – The three new “sin taxes” that Oklahoma voters approved in the fall of 2004 to boost funding for education and health care have generated less revenue than was initially anticipated, according to a new report released today by Community Action Project (CAP). Moreover, the revenue gains from the new funding streams have been nullified by revenue losses from tax cuts enacted in recent years.

“We feel it is important for policymakers and the public to have a more complete and accurate picture of the impact of the lottery, gaming compacts and increased tobacco taxes that were approved three years ago,” said David Blatt, the report’s author and CAP’s Director of Public Policy. “In particular, we believe that this an opportunity to examine these new funding streams in the context of other revenue decisions of recent years.”

The report shows that the state collected $241 million in the last fiscal year from the lottery, gaming compacts, and increased tobacco taxes. At the same time, the major tax cuts approved between 2004-06 decreased last year’s state revenues by some $333 million. Over time, this gap will widen to the point that by FY 2010, the lost revenue from tax cuts will more than double the additional revenues from lottery, gaming and tobacco.

“The net impact of increasing sin taxes while cutting the income tax is to make the tax system less able to fund essential public services and achieve the collective goals Oklahomans care about in the areas of education, health care and public infrastructure,” stated Blatt. “Voters may be more inclined to support “sin taxes” than broad-based revenue increases, but this is not a sustainable or responsible approach to funding services. With structural budget deficits looming on the horizon, it will be up to policymakers, advocates and ordinary citizens to propose and support better policy choices if we are to avert a major fiscal train wreck.”

In addition to weakening the adequacy of the revenue system, swapping sin taxes for income taxes puts more of the responsibility for funding public services on those who are less well off, since lower-income households spend a greater share of their income on tobacco and gambling than upper-income households.

Among the report’s main findings are that:

* The lottery generated $71.4 million in FY ’08, while gaming compacts brought in $56.8 million;

* While lottery and gaming revenues did generate new funds for education, the share of state appropriations for the major education agencies has fallen in recent years. Common education, in particular, has received a declining share of total state appropriations in recent sessions, as legislators have shifted General Revenue dollars to other priorities;

* Collections from the new tobacco taxes totaled $112.4 million in FY ’07, some $38 million below what was projected when the measure was approved. Most of the shortfall is attributable to a shift of tribal tobacco sales to the lowest cigarette stamp rate of 5.75 cents.

Community Action Project is a Tulsa-based anti-poverty agency that conducts policy analysis and advocacy on behalf of low-to-moderate income Oklahomans. The full report, titled “Three Years Later: Gambling and Tobacco Taxes Provide Small Boost to Revenues but Fail to Close Long-Term Funding Gap”, along with 1-page factsheets on each of the new revenue sources is available on CAP’s website at: www.okpolicy.org

Related:

NewsOk.com: Minimal budget growth seen for fiscal year 2009

Experts Warn that Vital Public Programs are at Risk

September 28, 2007

FOR IMMEDIATE RELEASE
September 27, 2007
For more information contact:
David Blatt, Public Policy Director
Community Action Project
918.382.3228

OKLAHOMA CITY – If the fiscal policies of reducing revenue continue, state government will lack the resources necessary to properly fund vital programs on which Oklahomans rely. According to members of the Alliance for Oklahoma’s Future, dramatic funding cuts in state services such as education, public safety, and state pension programs are inevitable if further reductions in state revenue occur this coming legislative session.

“Because of recent decisions enacted by the Legislature, Oklahoma’s revenue growth has slowed dramatically and we are facing long term budget shortfalls,” said David Blatt, Alliance chairman. “Costs for the state’s existing programs are increasing faster than revenues and this situation will further put the squeeze on those priorities that matter most to Oklahomans.”

The Alliance was called today to speak to members of the House Revenue and Tax Committee regarding changes to Oklahoma’s tax structure. The Committee chair posed the question, “Should Oklahoma cut taxes and if so, which ones?”

“With a grossly underfunded education system, increasing poverty rates among Oklahoma’s children, crumbling roads and bridges, and a crowded prison system, we believe these are the wrong questions for the committee to be asking,” said Blatt. “First and foremost, we need to guarantee that we are meeting our goals as a state to achieve an adequate tax system that provides every Oklahoman opportunity, prosperity and security.”

The Alliance proposed the following recommendations to the Committee:

• Take a breather from further tax cuts;
• Evaluate the current tax structure’s capacity to adequately fund the state’s goals;
• Develop long-term budget forecasts;
• Modernize Oklahoma’s tax system;
• Maintain a balanced tax structure; and
• Preserve and ensure equity in the state income tax.

Further testimony by Elizabeth Hudgins, Senior Policy Analyst for the Center on Budget and Policy Priorities, a national nonpartisan policy research organization, pointed out that Oklahoma’s taxes are already among the lowest in the nation. “Oklahomans pay among the least in the country in state and local taxes, ranking 43rd nationwide,” said Hudgins. “Policymakers should consider their state’s goals and priorities and ensure a tax system that works for all Oklahomans.”

Interpreting HB 1804: A Guide to Understanding Oklahoma’s New Immigration Bill

August 17, 2007

A new issue brief from Community Action Project (CAP) examines Oklahoma’s new immigration bill, HB 1804, which is slated to take effect November 1st.

The brief offers a section-by-section analysis of the bill and explores how its provisions relate to current law and practice in such areas as public benefits, identity cards, employment and law enforcement. It is designed to assist public and private stakeholders in the immigration issue understand how the bill applies to them.

Among the issue brief’s key findings:

Many sections of HB 1804 may either duplicate or mirror what is already in state or federal law or simply put into statute what is already occurring in practice in Oklahoma.

The bill does not challenge the constitutionally-guaranteed right of all children to attend school and receive all educational services, regardless of legal status.

While the bill requires verification of legal status for those applying for “public benefits”, the established definition of public benefits in state and federal law is limited to certain well-defined government programs, which already are unavailable to unauthorized immigrants.

Read entire brief here.

Interpreting HB 1804: A Guide to Understanding Oklahoma’s New Immigration Bill

August 17, 2007

A new issue brief from Community Action Project (CAP) examines Oklahoma’s new immigration bill, HB 1804, which is slated to take effect November 1st.

The brief offers a section-by-section analysis of the bill and explores how its provisions relate to current law and practice in such areas as public benefits, identity cards, employment and law enforcement. It is designed to assist public and private stakeholders in the immigration issue understand how the bill applies to them.

Among the issue brief’s key findings:

Many sections of HB 1804 may either duplicate or mirror what is already in state or federal law or simply put into statute what is already occurring in practice in Oklahoma.

The bill does not challenge the constitutionally-guaranteed right of all children to attend school and receive all educational services, regardless of legal status.

While the bill requires verification of legal status for those applying for “public benefits”, the established definition of public benefits in state and federal law is limited to certain well-defined government programs, which already are unavailable to unauthorized immigrants.

Read entire brief here.

Budget Update: State Revenue Growth Showing Early Signs of Slowdown

August 3, 2007

Another doom and gloom economic forecast from the Community Action Project.


By David Blatt
Director of Public Policy, Community Action Project

Oklahoma enters a new fiscal year amidst signs that state revenue collections may be entering a slowdown. As legislators grapple to address new responsibilities, rising costs and unmet needs, this revenue slowdown sends a signal of budget challenges on the imminent horizon.

I. Revenue Trends

The most recent state fiscal year, FY ‘07, marked the fourth consecutive year of revenue growth in Oklahoma. General Revenue (GR) tax collections, which represent approximately 72% of all state tax revenues, increased by 4.2% in FY ‘07 compared to FY ‘06. Since emerging from the steep downturn of 2002-2004, GR has grown at a robust annual rate of 9.2%. Also for the fourth consecutive year, actual GR collections came in well above certified estimates, allowing for a substantial end-of-year deposit to the state’s Rainy Day Fund, which has now reached $571.6 million. Read more…

CAP Study Shows Public Investment Best Way to Stimulate State Economy

May 1, 2007

Community Action Project urges using proven fiscal tools over tax cuts to grow Oklahoma’s economy

Economic research shows that policymakers who want to grow Oklahoma’s economy should invest more in education, health and infrastructure rather than cut taxes, according to an issue brief released today by Community Action Project (CAP).

The issue brief according to CAP, is based on a thorough review of economic research, historical data and comparative studies with other states and nations. The brief considers a broad array of fiscal policy tools available to state policymakers for growing Oklahoma’s economy. It finds that public investment in education, health and infrastructure are the most effective ways to spur economic growth. Such investments stimulate the economy by lowering business costs and raising labor productivity.

“This brief clearly demonstrates that we can encourage stable, long-term economic growth in the state by investing in the priorities needed to support Oklahoma’s families, businesses and communities,” said David Blatt, Director of Public Policy for CAP, a Tulsa-area anti-poverty agency.

“Investing in public services helps those who run businesses that depend on a skilled workforce and functioning infrastructure. By helping to decrease significant business costs and improve the environment for revenue generation, Oklahoma policymakers can encourage business investment and entrepreneurial growth, significantly impacting Oklahoma’s economic growth rate.”

In contrast, the study finds that tax cuts are an extremely inefficient fiscal tool for achieving economic growth. In one study cited by the brief, researchers found that 96% of the revenue given up by a typical tax cut is wasted money, going to firms whose investment decisions were not affected by taxes.

“Research has found that public services, especially those dealing with education and infrastructure, are key determinants to business location and investment decisions,” said Jim Alexander, a policy analyst at CAP and the brief’s author.

“Likewise, policy that improves the health and the opportunity for greater educational attainment of all Oklahomans creates a more productive, better-skilled workforce that attracts businesses and high- skilled workers.”

CAP Releases Children’s Health Insurance Issue Brief

April 4, 2007

Expanding access to health insurance for Oklahoma’s children would have significant, far-reaching impacts that benefit all Oklahomans, according to a new issue brief released today by Community Action Project, a Tulsa-area anti-poverty agency that conducts policy analysis on issue affecting low- and moderate-income Oklahomans.

The issue brief cites research that shows that children with health insurance are more likely to receive early, preventive health care, are less likely to visit emergency rooms or be hospitalized, are less likely to be absent from school, and are more likely to perform better academically.

The brief was released in conjunction with a press conference at the State Capitol urging the Legislature to support SB 424, a bi-partisan measure that would extend eligibility for publicly-subsidized health insurance to children in families with income between 185% and 300% of the federal poverty level.

Currently in Oklahoma, about 130,000 children, or 15 per cent, have no health insurance, the 6th highest rate in the nation. The moderate-income households targeted by SB 424 are a “gap population” that often experience the greatest obstacles to obtaining coverage, earning too much to qualify for Medicaid but too little to be offered or be able to afford family coverage through their employers.

Under the SCHIP program, the state would be eligible for an enhanced federal matching rate of $3.48 for every state dollar spent on health care costs for children between 185% and 300% of poverty.

CAP Releases Children’s Health Insurance Issue Brief

April 4, 2007

Expanding access to health insurance for Oklahoma’s children would have significant, far-reaching impacts that benefit all Oklahomans, according to a new issue brief released today by Community Action Project, a Tulsa-area anti-poverty agency that conducts policy analysis on issue affecting low- and moderate-income Oklahomans.

The issue brief cites research that shows that children with health insurance are more likely to receive early, preventive health care, are less likely to visit emergency rooms or be hospitalized, are less likely to be absent from school, and are more likely to perform better academically.

The brief was released in conjunction with a press conference at the State Capitol urging the Legislature to support SB 424, a bi-partisan measure that would extend eligibility for publicly-subsidized health insurance to children in families with income between 185% and 300% of the federal poverty level.

Currently in Oklahoma, about 130,000 children, or 15 per cent, have no health insurance, the 6th highest rate in the nation. The moderate-income households targeted by SB 424 are a “gap population” that often experience the greatest obstacles to obtaining coverage, earning too much to qualify for Medicaid but too little to be offered or be able to afford family coverage through their employers.

Under the SCHIP program, the state would be eligible for an enhanced federal matching rate of $3.48 for every state dollar spent on health care costs for children between 185% and 300% of poverty.

Community Action Project Urges Long-Term Budget Forecast and Pause on Tax Cuts

March 14, 2007

In a press release today, Tulsa based Community Action Project proposed raising taxes in Oklahoma’s slowing economy. Click here for the issue brief titled: “Cutting Deep: New Projections of Sluggish Revenue Growth Suggest that Tax Cut Impact May Be Felt More Deeply and Quickly than Anticipated”

Full text of release:

Tulsa, OK: New Oklahoma budget projections show that tax cuts enacted in recent years are having a more immediate and dramatic impact on the state’s fiscal outlook than initially expected, according to a budget brief released today by Community Action Project, a Tulsa-area anti-poverty agency.

“We are now seeing that the tax cuts are running headlong into our ability to invest in the priorities needed to support Oklahoma families, businesses and communities,” said David Blatt, CAP’s Director of Public Policy and the brief’s author. “The trade-off for pushing ahead with further tax cuts may be felt directly by those who attend public schools and colleges, run a business that depends on a skilled workforce and functioning infrastructure, or need help with health care and social services.”

The new budget projections, certified in February by the State Equalization Board, see general revenue collections growing by just 1.5% during the current fiscal year and by a paltry 1.0% next year. This is well below the 25-year average of 5.4% annual growth in general revenue, and would mark the first time revenues have grown by less than 2% in a non-recessionary year.

“This study provides a wake-up call for what happens when the state slashes its tax base during an oil boom,” noted Alexander Holmes, OU Regents Professor of Economics and the former State Finance Director under Governor Henry Bellman. “We’ve been down this same road before, but it appears that we failed to learn the lesson that tax cuts in good times can have painful consequences in bad times”.

The issue brief shows that sluggish revenue collections are a direct result of the tax cuts passed over the past three legislative sessions. Tax cuts are estimated to have a revenue impact of over $560 million for the upcoming budget year. The vast majority of the tax cuts affected state personal income tax collections, which are projected to decline by 9% between state fiscal year 2006 and 2008.

These projected stagnant revenues come at a time when the state is already struggling to deal with billions of dollars in unfunded liabilities in the state teachers’ retirement system, as well as upholding commitments to raise teachers’ salaries, expand access to higher education, repair roads and bridges, and bolster the health care system.

“If revenues come in as projected by the State Board of Equalization in February, the state will be extremely hard-pressed to meet its funding obligations, especially since additional rounds of tax cuts are currently scheduled to take effect over the next three years”, said Blatt. “Given what we are now learning about the bleak budget picture ahead, legislators should take the opportunity to consider calling a time out.”

The brief also points to a serious flaw in the budget process itself, which fails to provide lawmakers with any long-term baseline budget forecast that could give them a framework for their decisions. Reforming the budget process to provide additional and more accurate forecasting could help lawmakers make more fiscally responsible and sustainable decisions.

“This report is an excellent addition to a small but important set of recent analyses warning of future difficulties for state government finance in Oklahoma,” commented Dr. Larkin Warner, OSU Regents Professor Emeritus of Economics. “The Governor and the Legislature owe it to the state’s citizens to prepare long term projections of state revenues and demands for state services.”