Wednesday, June 27, 2007
Monday, June 25, 2007
24 June 2007
One of the biggest road blocks to government reform is the approximate 7 billion dollar liability that exists in the Teachers' Retirement System. The problem is, these are benefits that the state does not currently have to give. We have this problem because liberal big-spending politicians have irresponsibly increased benefits without paying for them.
Since 1991, the Legislature has increased the unfunded liability in the Teacher Retirement System fourteen times. The increase in the unfunded liability, due to legislation from 1991 to 2005, has been $1.3 billion. The result is that the Oklahoma Teachers' Retirement System is the third most poorly funded public pension system in the country.
This year liberal politicians sponsored at least ten bills to increase benefits without finding new ways to dedicate resources or reform the system.
In order to deal with attempts to raid the retirement system, the House has implemented the Oklahoma Pension Legislation Actuarial Analysis Act (OPLAAA). OPLAAA establishes three criteria that bills amending the retirement system must meet. First, benefits cannot be increased by the Legislature without paying for them. Second, actuarial investigation of the bill is required to provide the true cost of proposed legislation. And third, a one year delay mechanism is established that allows more time to assess the merits of retirement legislation. This forces fiscal impact legislation to lay over for a year before it can be considered. This way politicians and special interests should not be able to drum up sentiment in the heat of the moment to generate enough votes to raid the retirement system.
It appears there were no new successful raids on the Teachers' Retirement System this year and legislation was passed to increase funding in order to begin drawing down the amount of the liability.
However, I believe teachers' retirement will always be a problem as long as the government remains in the business of managing retirement funds.
For one thing, government pension fund managers, in their efforts to maximize investment, have made questionable investments in foreign companies which invest in terrorist sponsoring nations.
Also, the OPLAAA law can be changed at any time. Liberal politicians can amend OPLAAA in the same bill by which they are proposing to raid the retirement funds. Until OPLAAA is placed into the state's constitution (which can only be amended by a vote of the people) it will guard the retirement fund much like a bulldog without teeth.
It is my belief that state government should get out of the retirement business and allow new enrollees in the state retirement plans to have ownership of their own retirement accounts.
Known as a defined-contribution plan, these retirement accounts would be entirely controlled by their owners who could invest as they see fit, instead of the government having control of their money. This means that teachers who want a different job could take their retirement plan with them in the form of a 401k. No longer would they be trapped in a job they do not like just because they have state retirement. Also, since the state would be forced to make its contribution directly to that teacher's 401k, the politicians would be unable to raid the account because the teacher would own the money. And, with a 401k, there would arguably be greater inheritability and survivability benefits for the owner of the account.
Under this system, the government would gradually get out of the retirement business and save the cost of having to manage the billions of dollars it controls in retirement funds. And, people in the retirement system would be empowered with the ability to invest their own accounts.
I believe this plan would shrink the size of government while giving control to the people. I am strongly committed to this reform and as always, appreciate your feedback at 557-7350 or www.housedistrict31.com .
Tuesday, June 19, 2007
An important concern of local voters is to reverse the way state government diverts millions of dollars of motor vehicle taxes (monies we pay when we register our vehicles) into general government spending instead of transportation funding.
Because of these concerns and the needs faced by our district, I requested the Speaker of the House to appoint me to the House Transportation Committee. Serving as a member of the committee allows me to work closely with the Oklahoma Department of Transportation, specialize in the area of transportation policy and support the current House leadership with their goal of ensuring that the money which should be used for paving roads is indeed used for that purpose.
Currently, over 40% of the money generated from vehicle registration fees is diverted for non-transportation purposes. However, beginning in July 2007, county roads will be eligible to receive an additional 5% of motor vehicle taxes. This should amount to around $28 million in new funding. In 2008, counties roads will receive 10% of motor vehicle taxes and then 15% beginning in the summer of 2009. This is money that was previously used for non-transportation purposes. Once fully implemented, county road projects will receive about $85 million per year in new revenue as a result of recent funding reforms.
State funding for all roads and bridges has nearly doubled since 2005, increasing from about $205 million per year to $395 million this year.
Just a few years ago, state road funding averaged around $200 million per year with approximately $70 million going to bond payments. That left relatively little cash for actual road maintenance. It is obvious that past legislatures raided what should have been transportation funds and used the money for other purposes, such as legislative pork projects.
One area where the impact of this new funding will be felt is in South Logan County, where County Commissioner Mark Sharpton has received approval for over 3.6 million dollars to be used for paving five miles of Coltrane Road from Waterloo to Seward. This improvement will be the first time in many years that a major south county section line road will be upgraded from dirt to pavement. The potential economic impact to the area should be substantial.
In North Logan County, County Commissioner Monty Piercy won approval from the Department of Transportation for using the same funding method to expend $950,000 to build a new county bridge over Skeleton Creek. And, in Guthrie, the Department of Transportation is expected to expend about 5 millon dollars to replace the Guthrie viaduct in the next several years.
I believe this new funding should just be the first step in the effort to ensure that all the money from motor taxes is applied to roads. Senator Patrick Anderson and I have put together a strategy to advocate for both a House and a Senate bill to see that even more of the motor tax money currently used for non-transportation related purposes is applied to improving transportation in growth areas such as Logan County. The implementation of this policy would allow ODOT to oversee the upgrading of section line roads in counties which experience rapid growth.
In the future I will continue to support these and other transportation reforms. I look forward to providing additional updates with specific information on the transportation challenges and improvements in Logan and Oklahoma counties. I receive a number of calls from constituents with transportation related concerns and am always happy to help as I can. You can reach me at 557-7350 or www.HouseDistrict31.com.
Wednesday, June 13, 2007
Hello again, everybody! It has been an interesting process learning how to work in a Senate divided evenly between Democrats and Republicans.
That split has a financial cost. Because things were shared evenly by both parties, it cost the Senate more than $600,000 to level the playing field between both parties. That money ensured that the Democrats and Republicans have equal staff working for them and equal space in which to do the people’s business.
In fairness, that probably is the way it always should have been. Every senator, regardless of his or her party affiliation, represents approximately the same number of people. We are a body of equals because whatever power we have really belongs to the people we serve.
Partisan affiliations do not change that and should not impact the ability of any senator to do the work they were sent to the Capitol to do. Despite the financial cost, the outcome of a tied Senate has been positive for the people of this state. It has required, however, all 48 of us to learn to do things differently than they were done in the past.
For example, a bill I introduced this year to set up a website on which you could search through all expenditures of taxpayer dollars was duplicated by one of my colleagues on the Republican side of the aisle.
Rather than fight it out over whose bill would move forward, he and I agreed to co-sponsor the same bill. That probably would never have happened in a Senate in which one party has control.
As a result, ego-driven things such as which senator is listed first among the authors became much less important. The result of the bipartisan work between Senator Randy Brogdon and me was Senate Bill 1, “The Taxpayer Transparency Act.”
The measure is based on federal legislation passed by U.S. Sens. Tom Coburn, R-Oklahoma, and Barak Obama, D-Illinois. The measure creates an online database, which will be up and running by 2009, to show exactly how your tax dollars are spent. Both the Senate and House passed the bill unanimously.
Oklahomans deserve to see where their money is spent and on what programs. This bill will preserve that as a right. The Office of State Finance will be in charge of maintaining the searchable website to let citizens see how state dollars are spent.
The worst scandals relating to state dollars come when those in power try to hide how they are spending your money. By providing openness, we are empowering you with an even better tool to hold us accountable, and engendering trust in government – a cornerstone for a free society.
Thanks again for reading the “Senate Minute,” have a great week, and may God bless you all.
Monday, June 11, 2007
12 June 2007
Last week the Governor signed into law Senate Bill 1 (SB-1). I was privileged to co-sponsor this bill and believe it to be one of the most exciting pieces of government reform legislation this year. The Governor signed the bill despite unexpected last minute resistance from the State Chamber of Commerce.
As demonstrated by the pork spending in House Bill 1278 which I referenced in last week's legislative update, one of the biggest obstacles we face in trying to downsize government is finding inefficiencies, inappropriate spending and corruption. Once these are exposed, it will be hard for elected officials to continue to vote to fund unnecessary programs since the public will demand that such funding be discontinued.
The problem we are forced to deal with is that state government spending (now in excess of $7,000,000,000 in state appropriations alone) is not readily exposed to the scrutiny of the people. Even many legislators rarely have direct access to the items on which taxpayer money is spent. Most of the information presented to legislators only concerns requests for new spending, with little oversight over current and past agency spending. You can only imagine the temptation for abuse of public dollars when taxpayers and their elected representatives do not have easy access to how and where money is spent.
As you may recall, SB-1 calls for the creation of the website OKOpenBook.gov which will be online by the end of the year and will allow taxpayers to search government expenditures. As the website evolves, it should include easy to use tools which allow taxpayers to track exactly how and where government money is spent. This offers the average citizen much more oversight than legislators currently have. Some of the items to be included online include grants, contracts, subcontracts, tax credits, payments to businesses under the various business incentive laws, as well as expenditures from the Rainy Day Fund.
This idea was initially proposed by state Republican Senator Randy Brogden and Republican State Representative Paul Wesselhoft after a similar concept was initiated by Oklahoma U.S. Senator Tom Coburn and approved at the federal level.
I appreciate the fact that the Governor chose to sign this bill despite opposition to it. In opposing the bill, the State Chamber stated their concerns that the public would find out about tax credits that are granted to private businesses by the state government.
The expenditure of government largess to private entities seems to be taking on a variety of forms. Whether it is through the issuance of tax credits or the direct expenditure of government funds for private organizations, directly from the state treasury, the expansion of "Corporate Welfare" is making it difficult to shrink the size of government. If the Chamber's fears come to fruition, it will be possible for citizens to know exactly how these entities are benefiting off the taxpayer.
I believe SB-1 may, in the end, be the impetus for many spending reforms in state government. But this important tool will only be effective if the people will use it. I encourage everyone to bookmark the site www.OkOpenBook.gov for future reference.
As always, please do not hesitate to contact me if I can be of assistance at 557-7350 or www.housedistrict31.com. Your feedback is appreciated.
Wednesday, June 6, 2007
By Senator Jay Paul Gumm, D-Durant
Most Oklahomans believe a good proposal should stand on its own, earning support of lawmakers and leaders just because it is good for our state. One of those is the “All Kids Act” – the bill I wrote about last week to extend Medicaid coverage to as many as 42,000 Oklahoma children without insurance. It deserved to pass on its own merits.
Even so, its fate was put in doubt during the final hours of the legislative session because of political gamesmanship. Republican leaders in the House insisted that one of their bills pass before they would pass the “All Kids Act” 2007 as the session neared its end.
The disheartening thing is the bill they tied to “All Kids” was a bill that cynically proved the old saying that it is better to look good than to do good. House Republicans would not pass “All Kids” until the Senate passed House Bill 1270.
HB 1270 directs the Oklahoma Department of Commerce to do what it is already doing, except calling that effort the “2nd Century Entrepreneurship Center.” The reason for the change is that it center’s title is the same as the name given by House Republicans to their legislative agenda for 2007, making it sound like some kind of sweeping change.
When HB 1270 was up before the Senate budget committee, I asked a very simple question of its author. “What does this bill do other than require a sign be placed in the Department of Commerce and changing some letterhead?”
His response told every Oklahoman everything we needed to know about this bill. After a pause, he said, “That’s a good question.”
The 2nd Century Entrepreneurship Center bill was completely unnecessary except for the fact its passage convinced House leaders to do the right thing and pass the “All Kids Act.” In that regard, it was a fair trade – but it should not have to be that way.
Bills coming before us should live or die based on their own merits. On its merits, the 2nd Century Entrepreneurship Center deserved to die, and “All Kids” deserved to pass on its own without being tied to an effort to look good rather than do good.
It is hard for me to imagine why anyone would put at risk a bill to cover thousands of children with health insurance just so one political party could claim a legislative victory by passing a different bill that does nothing. In a word, that is unconscionable, and the people of Oklahoma certainly deserve better.
Monday, June 4, 2007
Voting Against Pork
In my legislative update published May 8, I wrote about the way inappropriate government spending is passed through the Legislature in a last minute budgeting process at the end of session.
I talked about how the process is used to benefit politicians and used an example of how this spending sometimes hits close to home. I referenced how hard to trace "pass through" appropriations were used to buy a train from a company in which State Senator Gene Stipe had an interest. I explained my commitment to trying to recognize and oppose this type of spending this year in the legislature. In the process, I researched past appropriations bills.
I should not have been surprised when at 8:49 PM on Monday night, May 23, House Bill 1278 made its way to the House Floor Calender where it was to be considered on the following day.
On the surface, HB 1278 was just an appropriations bill for the Oklahoma Tourism Department. But with research it become obvious that Senate budget negotiators had loaded up the bill with pork. The bill included several hundred thousands of dollars of "pass through" spending. Pass through spending is spending that does not really go to the appropriated entity but is "PASSED THROUGH" to an outside organization. It included a 1.2 million dollar appropriation in a line item titled only as multi-county organization and thousands more for a Shakespeare event, Red Earth, the Greenwood Cultural Center, the Summer Arts Institute, the Oklahoma Film and Music Commission and the Pollard Theatre in Guthrie. One of the most controversial provisions was an appropriation of $200,000 for a line item known only as "A Pocket Full of Hope."
Democrat Representative Terry Harrison of McAlester debated against the bill. Harrison expressed his disbelief that such bizarre projects would be funded. He referenced a Gene Stipe scandal by suggesting that we were better off investing in a dog food plant in McAlester. Harrison stated that in order to find out about "A Pocket Full of Hope" he had googled that name on his computer and was led to the website of a Chicago, Illinois based company.
I shared this disbelief. Were we as legislators really supposed to spend $200,000 of the taxpayers money with the only guidance as to what we were spending this money on being a five word line item known as "A Pocket Full of Hope?"
The legislator responsible for presenting the bill to the House acknowledged that the bill had problems. He appealed to us to vote for the bill, not based on the merits of it, but because the House negotiators had reached a deal with the Senate and we needed to honor that agreement.
It was obvious from the start that the bill faced the possibility of defeat. Twice, efforts to stop debate on the bill were voted down. When it came time for a procedural vote in order to accept the negotiated language, only 38 Representatives voted in the affirmative. This presented a potential problem as in order for the bill to pass, there needed to be 51 yes votes. Since the bill faced possible defeat, it appears as if both the House Republican and Democrat leadership went to work to whip their members into line in order to preserve the negotiated deal between the House and the Senate. In the end, 54 Representatives voted for the bill, which gave it three more votes than the margin needed to pass. There were 31 Representatives who simply did not vote at all. I don't believe I have ever seen final action on a bill where so many Representatives chose not to vote.
As you might imagine, this sparked a bit of debate in our Republican caucus. I believe a number of Republicans were not at all happy about having to insure the passage of pork spending, but neither did they want to throw a last minute monkey wrench into the budget deal between the House and Senate. In other words, a good number of conservative Republicans were victimized by the process of negotiating with a Senate which is partly controlled by Democrats.
While I can understand the position my colleagues faced, I personally felt it was important to stand on principle. I did not agree with the concept of wasting thousands of taxpayers' dollars simply because of politics. There was never any doubt in my mind on how I would vote on this bill. I have voted against a number of appropriations bills which I felt contained inappropriate government spending, but never had I seen a bill which contained such obvious pork as did HB 1278. So in spite of the fact that part of the funding in HB 1278 was headed to Guthrie, I felt I should honor my commitment to vote against pork and did so by voting no.
Following the vote, Representative Paul Wesselhoft provided a press release giving HB 1218 his "Skunk Master" of the year award. Each year Representative Wesselhoft awards this honor to the smelliest bill of the year. In his press release, Wesselhoft announced that he was also awarding clothes pins to the 15 courageous representatives who opposed the senatorial pork. Wesselhoft provides the pins so that Representatives can close their noses when dealing with the bill.
Saturday, June 2, 2007
There was a new political dynamic – a popular Democratic governor, new leadership in the Republican House of Representatives, and a Senate divided evenly between Democrats and Republicans.
The split power led many to predict fewer bills would become law than in years past. That appears to have been a solid prediction; hundreds of bills with good ideas were left by the wayside.
Despite the difficult political environment, we passed some positive legislation. The biggest for me, of course, was passage of the “Back to School” sales tax holiday, a cause I have championed since I was first became your senator.
This year, Oklahoma families will not have to travel to Texas to enjoy a sales tax holiday on school clothes during the first weekend in August. This common-sense proposal will help our families, our retailers and the entire Oklahoma economy.
Another law that will make a huge difference for Oklahoma’s children is the “All Kids Act.” The law will increase the number of children eligible to receive health care through Medicaid by closing the gap between those children presently receiving Medicaid benefits and those covered under private insurance held by their parents.
We have a real problem in Oklahoma because so many parents do not make enough to afford health insurance but make too much to be eligible for Medicaid. This legislation will provide a bridge, giving these children access to quality health care and allow them to lead healthy, productive lives.
The “All Kids Act” will increase Medicaid eligibility for children from 185 percent of the poverty level to 300 percent – the maximum allowed by the federal government. That will enable the state’s Medicaid program to provide coverage for as many as 42,000 additional children.
Currently in Oklahoma, children whose parents make $37,000 or less a year are eligible for Medicaid. The “All Kids Act” would increase that income ceiling to $60,000 a year.
State costs to provide the additional coverage are estimated at $8 million, allowing the state to draw down nearly $30 million in federal matching funds. The program will be funded by revenue from the state’s tobacco tax, which was increased by voters in 2004.
This was a huge step for a healthy future for our state. A healthy beginning for children leads to healthy adults and a brighter future for us all.
Over the next several weeks, I will write about successes and missed opportunities of the 2007 session. As difficult as it was to find common ground on a number of issues, our success on the two issues in this week’s column shows we can reach common ground. All it takes is hard work and a willingness to look at issues from all sides.
Thanks again for reading the “Senate Minute,” have a great week, and may God bless you all.