General Revenue Funds Shows Big Jump in Corporate Taxes

OKLAHOMA CITY – Corporate income tax collections continued climbing in March, while total collections to the General Revenue Fund (GRF) declined following an aberration in the normal flow of personal income tax receipts and ongoing reductions in natural gas revenues.

"The sharp upward climb in corporate income tax collections is extremely encouraging. Our economy is still expanding, although perhaps at a more moderate pace," said Secretary of Finance and Revenue Preston L. Doerflinger.

Collections to the GRF totaled $413.9 million in March, which is $20.6 million or 4.7% below collections for March of Fiscal Year 2012, and $61.6 million or 13% lower than the official estimate upon which the FY-2013 budget is based.

State Revenue Certified for 2014 Fiscal Year

OKLAHOMA CITY – Revenue figures approved Tuesday by the state Board of Equalization showed an additional $34 million available for appropriation for Fiscal Year 2014 than was used in Gov. Mary Fallin’s executive budget proposal.

In all, an extra $212.6 million in growth revenue is available for Fiscal Year 2014 appropriations than was appropriated for FY 2013, the current fiscal year ending June 30, according to figures approved by the seven-member board, which is chaired by the governor. The board approved revenues for appropriation topping $7 billion for FY 2014.

Secretary of Finance and Revenue Preston L. Doerflinger issued the following statement:

“Three years of impressive economic expansion have Oklahoma back at pre-recession revenue strength. That growth has generated $34 million more for appropriations than we used to build the governor’s proposed budget. Our priority now is to begin immediate work with the Legislature to set an honest state budget that uses these growth revenues to reduce income taxes and boost funding for core services like education and other priorities. Today’s picture is bright, but the looming federal sequester is anything but. There is no doubt it could hit our defense sector hard. Oklahoma’s best path forward is to continue emphasizing fiscal restraint and enacting policies that spur the type of impressive economic expansion enjoyed for these past three years.”

Doerflinger is director of the Office of Management and Enterprise Services, which prepares the revenue estimates the Board of Equalization certifies each year. Highlights of Tuesday’s revenue certification include:

·         The General Revenue Fund will have a surplus of $83.3 million to deposit in the Rainy Day Fund in July, increasing the amount in the state savings account to $660.8 million, an all-time record.

·         Oklahoma’s steady economic growth since the Great Recession has led to total state revenues increasing by 2.6 percent each of the two past fiscal years and projected to rise 3.1 percent next year.

·         Personal income tax collections are projected to generate $2.1 billion for fiscal year 2014, which is $155.2 million more than fiscal year 2013 – a 7.8 percent increase.

·         Sales tax collections are projected to generate $2 billion for fiscal year 2014, which is $106.5 million more than fiscal year 2013 – a 5.5 percent increase.

·         Economic snapshot: Oklahoma has added more than 62,000 jobs in the past two years, resulting in the nation’s sixth-lowest unemployment rate, 5.1 percent, and second-strongest manufacturing job growth rate.

Secretary of State Glenn Coffee Stepping Down

OKLAHOMA CITY – Oklahoma Secretary of State Glenn Coffee today announced that he will be stepping down to pursue opportunities in the private sector. Coffee has held his current cabinet level position in Governor Mary Fallin’s administration since January 2011. Prior to serving as secretary of state, Coffee was the president pro tempore of the Oklahoma State Senate.  Coffee will step down no later than Jan. 31, 2013.

“Serving the state of Oklahoma has been my dream since I was a small boy,” Coffee said. “Being able to serve on such a high level, first as senate president pro tem and then as secretary of state, is truly a dream come true."

“While I am sad to leave my post in the Fallin administration, I could not be happier with the course that Governor Fallin has charted for the state of Oklahoma. For the last two years I have had the great privilege of helping the governor craft policies that will continue Oklahoma’s forward momentum and help to spur job creation for decades to come. My thanks go out to Governor Fallin for giving me the opportunity to serve as secretary of state, and to all of the great men and women who worked with me during my years in public office.”

Fallin said Coffee brought a wealth of experience to the state Capitol.

“Glenn Coffee has been a fixture in Oklahoma politics for over a decade,” Fallin said. “As Senate pro tem, he helped to deliver the first ever Republican majority in the state Senate, setting the stage for unified conservative government. As secretary of state, Glenn continued his good work by helping to craft fiscally conservative budgets, landmark lawsuit reform and workers compensation legislation. His experience and wealth of knowledge will be sorely missed. I wish him the best in his future endeavors.”

The office of the secretary of state serves as a registry of Oklahoma’s official documents, filing and certifying executive orders, appointments and proclamations as well as publishing new statutes.  In addition to his official duties as the head of that agency, Coffee also served as Fallin’s lead negotiator on budget issues and issues related to Oklahoma water rights.

Secretary of Finance Preston Doerflinger will assume Coffee’s responsibilities as Fallin’s lead budget negotiator. The Fallin administration plans to retain Coffee as an outside consultant on water issues, although details of that arrangement have not yet been finalized.

House Studies State Employee Compensation

OKLAHOMA CITY – State Rep. Leslie Osborn said conservative policy should include fair compensation for a quality state employee workforce.

“A well-compensated workforce that is efficient is a reasonable idea for a fiscal conservative to look at,” said Osborn, R-Mustang. “As lawmakers, we are responsible for the recruitment and retention of the highest performing members of the workforce to deliver core state services.”

The Oklahoma Public Employees Association (OPEA) worked with Rep. Osborn in requesting yesterday’s study. According to the OPEA website, “House and Senate leadership as well as the governor’s office all voiced support for this study.”

Oklahoma Secretary of Finance and Revenue Preston Doerflinger said he opposes across-the-board pay increases and longevity-based pay, but supports an appropriate level of compensation based on performance appraisals, and believes it is necessary to recruit high performers.

Doerflinger said lawmakers should strive to pay state employees 75-85 percent of the private sector market value of their position to be competitive.

The State has consistently lost ground on competitive compensation, according to Lucinda Meltabarger, state administrator of human capital management. As of fiscal year 2011, classified state employees are paid about 19.17 percent below market value.

Meltabarger said not all positions are paid equally in relation to the market. For example, IT professionals are paid about $20,000 more at certain local oil companies than at the state, she said.

An ideal turnover rate might be about 5 percent, Meltabarger said. According to Ron Wilson, state director of talent management, the fiscal year 2011 voluntary turnover rate for classified state employees was approximately 10 percent. The state loses $68 million annually due to turnover, he said.

Meltabarger recommended a more thorough study of state benefits to get a sense of their true value to potential employees rather than their cost to the state.

Oklahoma Department of Transportation Deputy Director and Chief Financial Officer Mike Patterson said it is difficult to recruit for the agency’s positions requiring the highest level of training or education. Highly trained agency employees are generally paid between 25-40 percent below the market value of their positions.

Oklahoma Treasurer Ken Miller said his office has trouble recruiting employees. He said as conservative lawmakers continue to reduce the size of state government, some of the savings should be used to recruit quality employees.

Jonathan Small, policy analyst for the Oklahoma Council of Public Affairs, said the state’s retirement system is outdated and encourages early retirement. Small recommended that the state move to a defined contribution plan for all new state employees. Another factor that affects turnover is employment security, especially with unclassified positions.

“I definitely agree that there are a number of jobs and classifications that need pay raises,” said Small. “However, we need to understand that we will never be able to match private sector pay. I think we should try to get close as we restructure our benefit design.”

Small recommended statutory changes that would increase the flexibility agency heads have to provide compensation on a per job, per employee basis; allow for one-time bonuses; modernize the state benefit structure; and remove onerous barriers to compensation systems based on performance.

Small specifically highlighted the need for competitive pay and benefits for corrections employees.

OPEA Executive Director Sterling Zearley noted that entry-level child welfare specialists are paid on average at 23 percent below the market and that corrections officers begin at $11.83 per hour while an oil field worker is generally paid $25 per hour.

Zearley said he believes state employee pay should be 90 percent of market value, partially because benefits have been gradually reduced. He said he agrees with proposals to modernize benefits and move towards a performance-based system.

Ed Lake accepts OKDHS Director Position, Governor Comments

OKLAHOMA CITY – Governor Mary Fallin today applauded the selection of Edward Lake as the new director of the Oklahoma Department of Human Services (DHS).  The DHS Commission announced Lake’s selection at a board meeting on Wednesday.

“I applaud the selection of Edward Lake as the next director of the Oklahoma Department of Human Services,” Fallin said. “With experience at nearly every level of the Tennessee Department of Human Services, Ed understands the challenges of managing an agency that interacts with the public at many levels.  He has proven himself an effective leader who was able to work with the agency and external stakeholder to improve the quality of services delivered to clients. 

“The ongoing reforms at the Department of Human Services, including the implementation of the Pinnacle Plan, will help improve the delivery of child welfare services in Oklahoma.  I’m confident Ed Lake can provide the leadership at DHS to help us ensure the state is providing adequate protection and care to vulnerable Oklahoma children.”

Governor Fallin met in person on Wednesday with Lake.

“As voters consider a state question that would put the governor in charge of selecting the DHS director, I felt it important to meet in person with Ed Lake,” Fallin said. “I came away from that meeting impressed by his quality and character and feel he’s a great choice to lead DHS.”

The governor said if State Question 765 is approved by voters in November, she has no plans to replace Lake as DHS director.

Governor Fallin thanked Secretary of Finance Preston Doerflinger, who had served as interim director of DHS since March.

“I appreciate Preston Doerflinger’s willingness to take on the challenge of serving as interim-director at DHS,” Fallin said. “Preston has been instrumental in my administration’s effort to deliver on the promise of more efficient and effective state government. During his time as interim-director at DHS, he provided leadership at the agency to implement reforms and improvements to move the agency forward.”

Doerflinger will resume his duties as director of the Office of State Finance.

Ed Lake Bio

Edward Lake, from Hendersonville, Tenn., has experience working at almost every level of the Tennessee DHS from 1973 until retiring in 2011. He served as a child welfare caseworker, a food stamp office supervisor, and as both a county and regional director in social services. He served as deputy commissioner of the agency from 1992 until 1996, as assistant commissioner from 1996 through 2003 when he was again named as deputy commissioner until his retirement in 2011. 

Responsible for the day-to-day operations of TDHS, Lake managed the department’s more than 5,000 employees in all 95 counties of the state. The state agency administered programs including Supplemental Nutritional Assistance Programs (SNAP); Temporary Assistance to Needy Families (TANF); Medicaid; adult protective services; child care licensing; vocational rehabilitation, disability determination services; child support; appeals and hearings; as well as several federal community services programs.

Lake has extensive experience with organizational change and oversaw comprehensive restructuring of the agency. He worked to improve client services and build external support of the department’s efforts by working closely with advisory groups of advocates, legal aid staff, and other key external stakeholder groups.

During Lake’s tenure at TDHS, he was among key contributors to the development of the agency’s child welfare caseworker training academy and received a community service agency award for improving the department’s and the community’s child abuse services following a nationally publicized child abuse death. He also provided leadership for the design and implementation of sweeping child care licensing reforms in state statute and policy, including a statewide rated child care licensing system.

Lake led the department’s implementation of the first TANF program and chaired the Governor’s Task Force on Families First (TANF program) to develop comprehensive changes to the program. He provided leadership during the state’s emergency responses to Hurricane Katrina and developed an innovative method for providing immediate financial assistance to relocating victims through the use of “pre-loaded” electronic benefits cards.

Lake holds a bachelor’s degree in social work from East Tennessee University and a master’s degree in Social Work from the University of North Carolina at Chapel Hill.

FY13 General Revenue Collections 0.4% above estimates

OKLAHOMA CITY – Total collections to the state’s General Revenue Fund slowed in August, but sales tax growth remained a silver lining for the Oklahoma economy, Secretary of Finance Preston L. Doerflinger said Wednesday.

"Our overall collections have been diminished by low energy prices in the final months of the last fiscal year, plus refunds made during the first two months of Fiscal Year 2013," Doerflinger said. "And the drought undoubtedly has had some negative effect. But those factors haven’t dampened consumer confidence."

The finance secretary, in releasing his monthly General Revenue Fund report, added: "We’ve also seen lower than expected personal income tax collections, but part of that is related to the timing of the remittance of withholding taxes. This has been overcome largely by sales taxes, which beat prior year collections by double digits over the first two months this fiscal year."

Total collections to the General Revenue Fund for the month of August were $386.4 million, down $28.4 million and 6.8 percent from a year ago. The amount collected for the month was $17 million and 4.2 percent lower than the estimate.

It was only the third time since April, 2010, that monthly GRF collections had been below both prior year receipts and the estimate.

Doerflinger said it is important to note that despite the lull in personal income and oil and natural gas tax receipts, total GRF collections for July and August were still above the estimate by 0.4 percent. Sales tax collections, however, beat the estimate by 4.1 percent in July and by 6.3 percent in August. Sales tax receipts in August also exceeded the prior year by 12.1 percent.

"It’s too early to proclaim a slowdown in the Oklahoma economy, which has had an incredible rebound from the recession over the past two years" he said. "After all, sales tax growth is perhaps the leading indicator of our economic strength, our corporate taxes are up and our 4.9 percent unemployment rate is the envy of neighboring states.

"Gov. Mary Fallin has gained national attention for her job recruiting efforts and for her pro-growth policies that have helped the Oklahoma economy recover. Our constitutional Rainy Day Fund now has a near-record $577 million in it after being completely drained as a result of the recession. In short, the Oklahoma economy appears to have a lot of power and vitality moving forward."

Doerflinger said his only real worry at this point stems from external factors such as financial troubles abroad and the failure of the president and Congress to reach an agreement on the federal budget.

"I hope another national financial calamity does not happen," he said, "but it’s critical to be prepared just in case. I applaud Speaker-designate T. W. Shannon’s plan for a legislative study to develop contingency plans in the event Washington doesn’t gets its act together and that leads to massive cuts in federal funds going to the states.

"At the Office of Management and Enterprise Services, we have requested agencies to notify us as we go through the budget request process of any known impact from the sequestration provision of the federal Budget Control Act. That will give us a sense of which programs will be subject to cuts if the federal budget issues are not resolved and automatic reductions are triggered."

Governor Fallin said, "The latest revenue report paints the picture of an Oklahoma economy that is fundamentally sound. While some collections have slowed, overall revenues in this Fiscal Year continue to be above initial estimates and sales tax revenues continue to grow at a strong clip. Furthermore, other economic indicators – like the state’s 4.9% unemployment rate – remain strong.

"Our recent economic success, however, won’t continue unless we continue our laser-like focus on pro-growth reforms. For Oklahoma to continue its forward momentum we will need to continue to pursue job creating policies here on a state level."

The Governor added that "Oklahoma will continue to be affected by national and international forces that remain outside of our control. Global energy prices, uncertainty surrounding policies from Washington, and the potential for massive military spending cuts under ‘sequestration’ all have the potential to dramatically impact our economy and our revenue collections. As governor, I will continue to advocate for those policies that support Oklahoma job creation and economic growth."

General Revenue collections for the first two months of the new fiscal year were $775.5 million, down $22 million or 2.8 percent from the same two months of FY-2012 but remained $3 million or 0.4 percent above the estimate.

Major tax categories in August contributed the following amounts to the General Revenue Fund:

Office of State Finance Undergoes Name Change

OKLAHOMA CITY – The Office of State Finance is no more—now it's the Office of Management and Enterprise Services, effective Friday, Aug. 24.

"This name change reflects our agency’s expanded role under a 2011 consolidation law that folded four other important agencies into the OSF," said Secretary of Finance Preston L. Doerflinger, who worked with legislative sponsors and the administration of Gov. Mary Fallin on the government modernization effort.

Although the name change did not take effect until Friday, the four agencies became part of the OSF a year ago. They were the Department of Central Services, the Office of Personnel Management, the Oklahoma State and Education Employees Group Insurance Board and the Employees Benefits Council.

"This has been an enormous undertaking that has improved services and saved taxpayers millions of dollars, and we’re just getting started," Doerflinger said. "We have several projects in the works, including those that will improve state government transparency.

"The cornerstone of our efforts is to create an agency that is FAST—flatter, agile, streamlined and technology-driven. We have made many strides toward that objective."

The Office of Management and Enterprise Services, or the OMES, will have eight divisions. The core Administrative Division will continue to be located at the State Capitol, where the OSF has performed budget and revenue reporting functions since it was created in 1947 as the Budget Division of the Executive Branch.

Carol McFarland has been serving as interim director of the OSF since Doerflinger agreed earlier this year to fill in as interim director of the Oklahoma Department of Human Services on a temporary basis. Doerflinger will return to the finance agency when a permanent director of the OKDHS is named.

McFarland was earlier chosen by Doerflinger to be transition project manager for the consolidation project. She said she also is pleased by the streamlining progress.

"We’ve already found millions of dollars in savings, while improving services to the public, state agencies and employees," McFarland said.

Among the divisions of the OMES is the Information Services Division, which also is headed by a cabinet-level official, Alex Pettit, the state's first chief of information technology.

Other sub-groups of the OMES include the Central Purchasing Division and the Division of Capital Assets Management, which formerly were parts of the Department of Central Services.

Also, the Budget, Policy and Communications Division; the Employees Group Insurance Division (formerly the Oklahoma State and Education Employees Group Insurance Board); the Division of Central Accounting and Reporting, and Human Capital Management, which incorporates the former Employees Benefits Council and was formerly known as the Office of Personnel Management.

DHS Officials Comment on Approval of the Child Welfare Pinnacle Plan

Oklahoma City—The Oklahoma Department of Human Services received endorsement today from outside child welfare experts on a bold improvement plan for its child welfare system.

The plan, referred to as the “Oklahoma Pinnacle Plan” is part of a settlement agreement reached in January 2012 in the D.G. vs. Yarbrough class action, civil rights lawsuit. OKDHS agreed in the settlement to make targeted performance improvements related to the way it cares for children in foster care. As part of the settlement agreement, three out-of-state child welfare experts (referred to as co-neutrals) were selected to oversee the state’s improvements. 

“We are pleased to have received endorsement of this plan which outlines very ambitious goals for the agency to achieve over the next five years,” said Preston Doerflinger, Interim Director of OKDHS. “OKDHS is committed to the vulnerable children of this state and to the successful implementation of this plan.”

The plan was first submitted on Mar. 30 to the co-neutrals and since that time the monitors have worked with OKDHS officials and plaintiffs to refine the plan and ensure the initiatives outlined will achieve needed improvements in the state’s foster care system.

“To demonstrate our commitment, we have already implemented some of the initiatives in the plan such as the first of several increases to reimbursements for foster parents and salaries for child welfare specialists,” said Doerflinger. “We have also been working with the co-neutrals on performance targets and baselines which will measure our successful implementation of this plan as we move forward.”

“This is an exciting time for all of us who work in child welfare,” said Deborah Smith, Director of OKDHS Child Welfare Services. “The Pinnacle Plan’s name reflects our goals--to reach the highest point possible in our child welfare program. This plan is the result of a lot of hard work and collaboration by people who are very committed to improving our system that protects abused and neglected children."

"This is an exciting time of great reform at DHS," said Wes Lane, Chairman of the Oklahoma Commission for Human Services. "Rarely before in state history have we seen so many people all pulling the same wagon in the same direction. To our legislators, our Attorney General, our Governor and to the many DHS staff who have worked tirelessly with the Co-Neutrals to put this plan together - the Human Services Commission says a hearty thank you! With this continued unity of purpose, we will be successful and our children the better for it."

Record Rainy Day Fund Deposit Announced

OKLAHOMA CITY – Sales tax revenue climbed by 13.1 percent in June over the previous year as Oklahoma closed out Fiscal Year 2012 collections to the General Revenue Fund with enough money to make a record $306.8 million deposit into the state's Rainy Day Fund, Secretary of Finance Preston Doerflinger announced Tuesday.

"This preliminary report drives home the role consumer confidence has played in Oklahoma's economic recovery in the fiscal year ending June 30," Doerflinger said. "For the year, sales tax collections rose by 9.7 percent over the prior year. In June and at other times during the year, strong sales taxes helped ease energy tax variances due to low prices and tax rebates."

Tuesday’s report shows FY-2012 collections to the General Revenue Fund totaled $5.543 billion. This amount was $405.3 million and 7.9 percent above collections for FY-2011 and $306.8 million, or 5.9 percent above the estimate for FY-2012.

"It's stunning to realize that the Rainy Day Fund contained only $2.02 when Gov. Mary Fallin took office less than two years ago." Doerflinger said. "With this deposit added to last year's $249 million deposit, we now have $556 million in our savings account and have moved within striking distance of the all-time record of $596.6 million reached before the recession."

Gov. Fallin said, "It's great to end the 2012 fiscal year on a high note, as the entire year was a boon for the Oklahoma economy as collections exceeded the previous year by nearly 10 percent. Since January 2011, we've had positive growth over the prior year in 16 out of 18 months, and we've had double-digit growth in 10 months. We’ve also had a net increase of 38,200 jobs in the past 12 months ranking our state second in the nation for job creation. Our pro-business policies are succeeding in growing the economy and providing more opportunities for Oklahoma families.

"Looking ahead to next year, it's important we continue our focus on policies such as workforce development and education reform, government modernization, as well as tax reform that will help us bring even more jobs and investment to the state."

Doerflinger said he is hopeful that energy prices will improve during the new fiscal year, "understanding the impact of the oil patch on the Oklahoma economy. But our recovery has been broad-based, as high-lighted by the Oklahoma Department of Commerce's recent Economic Snapshot.

"That report, among other things, pointed to Oklahoma gaining more than 38,000 jobs since the first of the year, ranking second among the states. We lost a few hundred manufacturing jobs in May, but kept our No. 1 ranking in that area with a growth rate of 6.6 percent.

"I also found it interesting that our unemployment rate dropped to 4.8 percent in May at the same time the number of Oklahomans seeking jobs increased. Other states with low jobless rates have seen their workforce numbers shrink."

Oklahoma's unemployment rate is the fifth lowest in the country and compares to the national rate of 8.2 percent.

OKDHS Releases First Draft of Historic Reform Plan

Oklahoma City -- The Oklahoma Department of Human Services (OKDHS) has submitted a first draft of an improvement plan (.pdf, 84 pp, 3.0 MB) for its child welfare program to a panel of three child welfare experts who will be monitoring the state’s improvements over the next five years. The plan is part of a settlement agreement reached in January 2012 in the D.G. vs. Yarbrough class action, civil rights lawsuit. OKDHS agreed in the settlement to make targeted performance improvements related to the way it cares for children in foster care. 

“We are pleased with this plan and believe it addresses the 15 identified areas of improvement, the anticipated costs, and the agency organizational changes as defined in the settlement agreement,” said Preston Doerflinger, OKDHS interim director.

Since the settlement, OKDHS has been developing the improvement plan with the assistance of the outside child welfare experts (referred to as co-neutrals), Human Services Commissioners, representatives from the Governor’s office and state legislature, as well as key external stakeholders.

“This plan is the result of a historic collaborative effort between OKDHS, the Governor, the legislature, and other partners who have a stake in child welfare services,” said Brad Yarbrough, Chairman of the Human Services Commission. “We look forward to receiving feedback from the co-neutrals on this plan and continuing our work to improve the child welfare system in Oklahoma.”

The development of the plan included holding summits across the state with OKDHS child welfare staff and key external stakeholders to solicit ideas about how to improve the system. 

“Our staff chose to name the plan, “The Oklahoma Pinnacle Plan,” as the term reflects their goals to reach the highest point possible in the state’s child welfare program,” said Deborah Smith, Director of the Children and Family Services Division. “I told our staff to reimagine what our child welfare services could be. The Pinnacle plan was crafted to reach these goals. This is an exciting time for everyone who works in child welfare services.”

The Oklahoma Pinnacle Plan is divided into seven “Pinnacle Points” which relate to the 15 areas of improvement identified in the settlement agreement. Under each Pinnacle Point are strategies and initiatives to achieve the improvements. 

The Oklahoma Pinnacle Plan: An Improvement Plan for Child Welfare services

Doerflinger Addresses Administration Issues at OSF During His Absence

OKLAHOMA CITY – Office of State Finance Director Preston Doerflinger, while assuming a new role as interim director of the Oklahoma Department of Human Services, will remain as secretary of finance in the cabinet of Gov. Mary Fallin.

"I am humbled by my appointment to the DHS position on a temporary basis and determined to make a contribution to improvements in the agency that the Commission of Human Services is charged with overseeing," Doerflinger said. "I feel fortunate that Carol McFarland will be able to step in and continue the progress we have made in government streamlining. She has done a great job as transition project manager since four other agencies were folded into the OSF by legislation enacted last year."

"Working together with the consolidated agencies, we achieved greater savings than the 15 percent mandate in the government modernization law and are on a course to achieve even greater savings in the future," Doerflinger continued.

Under the law, which took effect last August, the Department of Central Services, the Oklahoma Education and State Employees Group Insurance Board, the Employees Benefits Council and the Office of Personnel Management were consolidated into OSF.

"As part of my duties as secretary of finance, I will continue to be in contact with Carol and other key personnel of the consolidated OSF," Doerflinger said. "The fact that we have so many capable people at the OSF was a major factor in my decision to accept this interim position."

Doerflinger held the elective position of Tulsa city auditor when he was appointed to the dual role of OSF director and finance secretary in January of last year.

He said as finance secretary, he would continue to stay abreast of revenue issues and economic conditions and advise Governor Fallin in those areas.

"We just had a drop in unemployment as we continue to outperform other states in recovering from the national recession," Doerflinger said. "The governor is striving hard to advance the state economically and I want to do all I can to help.

I want to stress that this is a temporary appointment and I look forward to my return to the OSF after a permanent director is selected at the Oklahoma Department of Human Services."

Doerflinger informed OSF employees of the developments in an e-mail Wednesday afternoon.

"I won't be gone long and am anxious to continue the work we've started," the finance secretary wrote. "Based on the (legislative) session so far, it looks like there are other exciting opportunities ahead. Carry on in my absence and as the saying goes, 'I'll be back.'"

McFarland echoed Doerflinger's comments about the quality of staff at the OSF and said her challenge is "to maintain the momentum we have going in creating a "FAST" agency -- flatter, agile, streamlined and technology-enabled."

"I will be relying on the experts we have in place in such areas as the budget, state revenue and technology as we move forward and intend to keep Secretary Doerflinger apprised of our progress," she said.

McFarland is a certified public accountant and certified governmental financial manager. She came to the OSF from the Oklahoma Health Care Authority, where she was performance and reporting manager.

DHS Commission Names Doerflinger as New Interim Director

Oklahoma City -- The Oklahoma Commission for Human Services met today in a special meeting and has announced that Preston Doerflinger, Oklahoma Secretary of Finance and current director of the Office of State Finance (OSF), will step in to replace Terri White as interim director for the Department of Human Services.

White, who had been serving in the interim post concurrent to her position as commissioner for the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS), chose to resign as interim director following the discovery that a state statute prohibiting dual office holding was silent about positions that are interim in nature.  Because the statute does not specifically address the issue of interim status, it is uncertain whether or not the statute would apply in this circumstance.  White and the Commission believe that the most appropriate course of action is to be safe since it is unclear as to whether the statute applies.

Doerflinger, who is currently director of the Office of State Finance, has agreed to temporarily resign that position to serve in the OKDHS interim role. He only intends to hold the position until a permanent executive director is announced.  According to the Governor’s Office, he will be reinstated as the OSF director at that time.

White felt that she could not consider a similar action due to the nature of her role at ODMHSAS and the agency’s standing as an integral part of the state’s overall health care system.  The department serves over 70,000 Oklahomans a year in need of mental health and substance abuse treatment.

Brad Yarbrough, chairman of the Commission, said they understand and agree with Commissioner White’s decision to step down as interim so there would be no question of her integrity, or the integrity of OKDHS, although they are still disappointed to be losing her leadership and knowledge.

“The commission, employees and the public were at ease with Terri in a leadership role during this time of transition,” said Yarbrough.  “Although, when Secretary Doerflinger was willing to step in, we knew there would be another proven leader taking the helm.  We are very confident in his abilities to benefit the organization and continue our positive progress.”

White has indicated that she will continue to assist the agency in any manner possible and is expected to maintain a consulting role with Doerflinger and the Commission.

“I want to reiterate my commitment to assist OKDHS as appropriate during this time of transition,” said White.  “The agency and its employees provide vital services to Oklahomans in need every day.  I will certainly do everything I can to assist Preston and the agency.

We already have a great working relationship, and I really look forward to the opportunity to work together in this new capacity.  What he has accomplished at OSF has been tremendous, and I know he will bring the same energy and innovation to OKDHS.”

“Knowing that Secretary Doerflinger and Commissioner White will be working together on behalf of OKDHS during this time, we feel like we have the best of all worlds,” said Yarbrough.

Doerflinger, who has received significant attention for his role in reshaping OSF, says that he welcomes the support and is excited to step into such an important role.

“I greatly welcome the opportunity,” Doerflinger said.  “I have great appreciation for the importance of this position and will do all that I can to capture and maintain the positive momentum that exists.  I also look forward to working with Commissioner White and have great respect for her abilities and experience.”

The Commission expressed both its appreciation for White and confidence in Doerflinger when the announcement was made at the special meeting held today.  Although the change was not planned, it was successfully carried out due to teamwork and partnership by all involved.

“It was a tremendous effort by everyone involved to find a quick and successful solution that benefits the agency and people of Oklahoma,” said Yarbrough.  “The Commission appreciates the efforts by both Terri and Preston, and is thrilled that we will have both of their help over the next several months, as we continue to advance.” 

The Oklahoma Commission for Human Services is actively engaged in a national search to fill the vacant OKDHS executive director position on a permanent basis.   The selection process is expected to be completed by June 30, 2012.

Revenue Collections End Fiscal Year on High Note

OKLAHOMA CITY – General Revenue Fund collections hit a high note to end 2011, recording double-digit growth in December and for the first 6 months of the current fiscal year, Office of State Finance Director Preston Doerflinger announced Tuesday.

"We had the best two months of the 2012 fiscal year in November and December, putting an exclamation point on our recovery from the Great Recession," Doerflinger said as he released the OSF's monthly General Revenue Fund report.

In December, total collections grew by 19.3 percent over the same month a year ago, while beating the official estimate by 16.6 percent.

That came on the heels of November's report showing growth of 22.6 percent and 18 percent, respectively, for that month over November of the prior year and the estimate.

"As we look toward the second half of the fiscal year, it is unrealistic to expect that such dramatic increases in receipts will continue on a month-to-month basis," said Doerflinger, secretary of finance in Gov. Mary Fallin's cabinet. "But all signs point to our economy continuing to outperform other states in our region and the nation as a whole."

"A big reason for this," he continued, "has been the mini-boom in the oilfields, which has generated economic activity throughout our economy and contributed to our growing manufacturing base.

Rainy Day Deposit Estimate Increased by $30 million

OKLAHOMA CITY — General Revenue Fund collections showed moderate growth in July, Office of State Finance Director Preston Doerflinger said Monday. He also announced that the deposit into the state's Rainy Day Fund will be $30 million more than originally expected.

"A final reconciliation of all sources contributing to the General Revenue Fund raised the deposit into the Rainy Day Fund to $249.2 million, compared with last month's estimate of approximately $219 million," Doerflinger said.

"This is really no surprise," Doerflinger said of the more moderate total growth figures. "We fully expected that the growth rate would moderate eventually, simply because collection of some revenue, such as income taxes, can vary greatly from month to month. We're still showing steady growth and I am optimistic that we can maintain that in future months."

Doerflinger, secretary of finance, added: "I'm concerned, of course, by Wall Street's reaction to the debt ceiling debacle in Washington and the downgrading of our country's bond rating. But this should not overshadow the progress we've made economically here in Oklahoma."

Gov. Mary Fallin also had a positive reaction to the latest GRF figures. "Our increasing revenues further show the Oklahoma economy is on the right track," the governor said. "As we begin a new fiscal year, it's also good news to see another significant deposit into our Rainy Day Fund.

Oklahoma can continue to build upon this positive momentum by pursuing the kind of pro-business policies that will attract new jobs and investment, which will lead to continued revenue growth," Gov. Fallin added.

Only time will determine the direction of the national economy, which some economists argue might be headed for another downturn that could dampen Oklahoma's robust recovery from the last recession. But Doerflinger remains hopeful about the state's economic future.

"Consumer confidence has been high in Oklahoma and our revenue collections have been stronger than most states for some time now," he said. "We saw pent-up demand leading to a buying spree by Oklahomans in 2011. While you could expect buying to level off this year, I see no reason for our citizens to succumb to the doom-and-gloom predictions of some economists."

Doerflinger pointed out that the state's unemployment rate held steady at 5.3 percent for 2 months in a row, compared with a national rate topping 9 percent.

"And unlike the systemic weakening of the manufacturing sector across the nation, Oklahoma over a 12-month period added 11,200 manufacturing jobs by June of this year," he said.

"Officials at the Oklahoma Employment Security Commission and in the energy industry attribute much of the gain in manufacturing jobs to a resurgence of activity in the oil patch due to strong oil prices and improved drilling techniques," Doerflinger said.

Many of the manufacturing jobs created in Oklahoma have been in the area of durable goods to meet the demands of the energy sector, officials say.

"While oil and natural gas prices have also taken a hit on Wall Street, some national experts continue to forecast that worldwide demand will cause an uptick in energy prices in 2012," Doerflinger said.

"That would bode well for Oklahoma, as far as state revenue collections go," he added. "But the commodity market has been known for volatility historically, and we'll be watching this area very closely in the months ahead."

The higher deposit into the Rainy Day account is important in case funding emergencies develop in the future. The constitutional reserve fund was drained to $2.03 after it had to be tapped during the last recession to ease huge budget shortfalls. It had reached a record $596.6 million at one point.