Does Anyone Like This Budget?

Capitol Considerations 

by Senator Micheal Bergstrom

Does Anyone Like This Budget?

We have a budget.

On Wednesday, at about 1:30 in the morning, the Oklahoma State Senate’s Joint Committee on Appropriations and Budget (JCAB) passed a $6.9 billion budget for fiscal year 2018. Then late Wednesday night we passed it again and sent it to the House.

I don’t think anyone is thrilled with it. Why? Well, let’s consider how it is funded.

There’s a $1.50 cessation fee on each pack of cigarettes, which is not a tax.  There’s also an increase to four percent on the gross production tax (GPT) of wells currently paying only one percent.  The bill also contains a 1.25 percent sales tax on vehicle sales, plus a variety of new fees, bonds, and revolving fund cash sweeps.  We also removed a number of tax refunds and rebates.

With the refusal of the Democrats in the House to cooperate and seriously negotiate, we were forced to get creative with funding. It seems that Minority Leader Inman, in his quest for political power, was not interested in helping solve long-term funding issues, so we ended up with an excise tax and a sales tax on new cars and trucks.

What’s in the bill?

One of my top priorities this session was to see that common education was held harmless in this budget. The budget avoids cuts or increases funding for the Department of Education and 16 other agencies. We are going to pass an $18 million trailer bill to make sure common education has no cuts. In fact, this budget provides approximately $21.6 million more for schools than the original FY’17 budget.

The Departments of Public Safety, Health Care Authority, Human Services, Rehabilitative Services and the Office of the Chief Medical Examiner all saw significant increases. Most of the remaining agencies saw a cut of less than five percent.

What’s not in this package of bills?

New wells will continue to pay only two percent GPT for 36 months before the rate rises to seven percent.  A travesty, since after 36 months much of the well’s production will have been depleted and since quite a few in the industry have told me in private conversations that a reduction to 18 months coupled with an increase in the GPT to four or even five percent will NOT have a negative impact on drilling. Also, there is no change in the income tax rate, nor is there a cap on deductions. I argued that reducing the rate further was foolish at this time and though I initially considered the cap on deductions I decided it was bad policy.

There is also no fuel tax increase.

There is no teacher pay raise. While that was a priority for us, fully funding education and crucial services had to take precedence. I’m hopeful we can get this done next year.

So we have a budget.

Nobody is thrilled with it. Still, it does protect our core services, we have eliminated some waste, and we have overcome a massive budget deficit.

It’s not perfect, but it is progress.

I welcome your questions and concerns, so please feel free to contact my office at the State Capitol if you would like to discuss a particular issue or problem.  Our office can be reached by phone at 405-521-5561 or by email at bergstrom@oksenate.gov.   If you visit the Capitol, we are located in Room 527A.

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A few weeks ago I said we were making progress on the Oklahoma state budget. We were, but a candidate for governor keeps derailing the process. Perhaps he's more interested in political posturing than in legislating.

Capitol Considerations: 

A Weekly Column by Sen. Micheal Bergstrom

Who Should You Blame For This Mess?

Oklahoma’s legislature has been struggling with a mess, a fiscal mess, and it has been getting messier as the days and weeks have rolled by.

A month ago, I was optimistic about our chances of getting a quality budget done before the end of session. Today I’m thinking we may end up in a special session. From what we are being told, we will likely remain in session through the weekend and right on through next week, with no days off, which is fine.

So let me tell you about what’s been going on. Those who read my column should have noted that I don’t spill a lot of ink describing the actions or inactions of the Democrats, or, for that matter, of the House of Representatives. Today I think I must.

The House, which is required by the state constitution to start all revenue raising measures, has sent multiple tax increase bills to the Senate. Since I was just elected in November, I can honestly say I wasn't involved in creating the budget hole we find ourselves in, and I have an aversion to raising taxes, but we have a $900 million hole, and we can't cut that much in a $7 billion budget and still maintain essential services. So I have held my nose and voted for some of those taxes.

Every time, after we send those bills back to the House, they have balked and bailed out.

Now part of that is because the Democrats in the House, led by someone who is running for governor and who seems more interested in playing partisan politics than in legislating, have been blocking any effort to solve this.

Another part is that the leadership of the Democrats was not at the negotiating table in the process until this week. In my opinion, they should have been there much sooner.

Possible avenues to solving the budget problem seem to include finding and cutting waste in agencies (though I doubt much will happen in this area), a cigarette tax, an increase in the oil and gas production tax rate, gas and diesel fuel tax increase (which would be dedicated to roads and bridges and would still leave Oklahoma below the regional average), reduction of a variety of business tax credits, an elimination of some oil and gas tax rebates.

Who knows what the final package will look like.

But now it is up to the House and the Democrats to decide if they actually want to fix the budget. Senate Republicans have been consistently pushing good policy. Unfortunately, on the House side and especially in the Democratic caucus, we have too many who are more interested in playing politics than governing and putting our great state’s citizens first.

My hope is that, since we are nearing our budget deadline, the politicking will give way to legislating.

I am interested in feedback from my constituents, so if you have any questions or comments, please email me at bergstrom@oksenate.gov. My office can also be reached by phone at 405-521-5561.

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Oklahoma Senate Making Progress, Hopefully

Capitol Considerations: 

A Weekly Column by Sen. Micheal Bergstrom

Making Progress, Knock On Wood

We do it all the time.

From the sidelines, we want to condemn the coaches, players, managers.

I am a huge Chicago Cubs fan. But those managers? There were some I thought were idiots. Who can argue with me about Leo Durocher during the 1969 season? So many times I yelled at him (through the TV, of course) about his needing to pull Ron Santo out in the clutch situations. I loved Santo, but he just wasn’t cutting it that season.

Cubs should have gone to the World Series that year, but instead, because of Durocher, in my estimation, it ended up being the year of the Miracle Mets.

Admittedly, I was 11 years old and may not have had all the facts.

Don’t we all do that?

We attack folks in the church, the classroom, the legislature.

Well, here in your state legislature we get a lot of that, and sometimes we deserve it.

All I can do is report to you what I’m doing and seeing.

This week I have two bills going to the governor’s desk. Senate Bill 563 makes it easier for school districts to save money when purchasing materials and services. SB 84 makes Student Reading Proficiency Teams (which decide if a student who fails the third grade reading test should receive a probationary promotion to the fourth grade) permanent and requires the collection of data to help us evaluate the success of the program.

Hopefully the governor will sign both bills.

Top concerns for me right now include funding DHS, healthcare, education, public safety and our prisons.

So far this session I have fought to get rid of the tax credits for wind turbines that those in the industry have told me they don't need to be profitable. We got rid of those credits, as far as new credits go, beginning July 1, saving taxpayers over $3 billion down the road. Unfortunately, it doesn’t help with this budget.

We are working on getting rid of some tax rebates to the oil and gas industry which will free up a little under $50 million, which is more than we would get if we raised the oil and gas production tax to 7% as some are calling for, but we won’t see any of that this year.

The Senate passed bills to move about $250 million from road and bridge funds to help fill the nearly $1 billion budget hole, and will replace much of that with revenue from a six cent increase in taxes on gas and diesel fuel, if that bill passes.

We passed a bill to uncouple Oklahoma’s income tax structure from the federal government. It will mean about $4 million in revenue this year, but possibly hundreds of millions of dollars in years to come.

The budget is being worked on continually, and has been the primary topic of discussion in the Republican Senate caucus all session and even before that.

Negotiations have been going on for quite a while between the House, the Senate and the Governor.

We voted in the JCAB committee on the Senate side on Monday on ways to fill a little under half of that budget hole. The House has to be fully on board, or we could be looking at massive budget cuts. Then there’s the Governor.

We are making progress on the budget.

Really, we are.

By the way, the Cubs won the World Series last year. That’s proof that there is always hope and things can turn out well.

Even in Oklahoma City.

I am interested in feedback from my constituents, so if you have any questions or comments, please email me at bergstrom@oksenate.gov. My office can also be reached by phone at 405-521- 5561.

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