House Votes to Provide State Employee Performance Incentive

OKLAHOMA CITY – Legislation that would make state jobs more competitive with the market was approved by the Oklahoma House of Representatives.

“The intent of the legislation is to address understaffing due to low pay in areas such as corrections, public safety and child welfare,” said Osborn, R-Mustang. “My legislation creates a one-time bonus of $1,000 as an incentive to help retain critical employees such as those who man our corrections facilities and haven’t received a raise since 2006, but it’s the study this bill authorizes that is really going to help create a market-based system that will address the need to make salaries more competitive.”

House Bill 1717, by state Rep. Leslie Osborn, would authorize a $1,000 performance-based bonus to state employees and initiate a study of state employee compensation for fiscal years 2013-2014. 

According to the Oklahoma Public Employees Association, 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.

“The state can’t keep jails adequately staffed at the current level of pay,” said Osborn. “We have to start making those salaries more competitive with the other job opportunities that are available for potential employees.”

House Bill 1717 was approved by a vote of 94-4 and now advances to the state Senate.

State House Republicans, Democrats Differ on States’ Rights Committee

OKLAHOMA CAPITOL – This week House Democrats made a barrage of statements condemning the House States’ Rights Committee created by House Speaker T.W. Shannon.

House Democrats complained that the “Committee entertained as fact internet myths and tinfoil hat fantasies” during a meeting of the Committee last Tuesday.

House Republican Caucus Unveils Pro-Growth Strategic Plan

OKLAHOMA CITY – The House Republican Caucus today unveiled their 2013 legislative agenda, which included a three-point plan addressing economic development, education reforms and infrastructure funding and maintenance.

Speaker T.W. Shannon

“Oklahomans have spoken loud and clear this year by voting in the largest Republican majority in Oklahoma history,” said House Speaker T.W. Shannon, R-Lawton. “They want overreaching regulations that limit their freedom repealed. They want policies enacted that protect their rights, that encourage job growth and prosperity and that improves our education system so their children can have a brighter future.”

On infrastructure, Speaker Shannon proposed an eight-year, pay-as-you-go plan to directly fund the upkeep and repair of infrastructure.

“In the past, the model has been to neglect infrastructure to the point of decay and then to take out bonds to repair those needs,” said Shannon. “Our plan will be similar to the eight-year transportation plan we introduced last year that allows us to prioritize projects based on need and to pay our way as we go without adding more debt onto the backs of hardworking Oklahomans.

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.

House won’t take up any bill that raises taxes

OKLAHOMA CITY – House Republicans on Wednesday advanced a new income tax reduction measure that ensures Oklahomans receive either an income tax reduction or no tax change at all.

HB 3038 was signed out of the House General Conference Committee on Appropriations on Wednesday. The Senate now must act to advance it from the Senate General Conference Committee on Appropriations in order for it to be heard by both chambers.

“The House has kept this issue alive and it’s now up to the Senate to deliver tax relief for working Oklahomans,” said House Speaker Kris Steele, R-Shawnee. “The next step is for the Senate to hear the bill in their committee. I hope they pass this plan and uphold the commitment we’ve all made to the people of Oklahoma to lower their taxes. The ball is in their court.”

If House Bill 3038 is implemented, a large majority of taxpayers would receive tax reductions, a small amount would see no change and no taxpayers would experience a tax increase, according to the Oklahoma Tax Commission. 

HB 3038 proposes three growth triggers that would reduce the top personal income tax rate to 4.5 percent within three to ten years, dependent upon revenue growth. Each trigger would result in a .25 percent reduction. In order for the trigger to take effect, there must be a 5 percent annual growth in collections of motor vehicle taxes, use taxes, sales taxes, income taxes and corporate taxes apportioned to the general fund (for details, see attached bill and attached summary document).

“This plan is a lot like the tax reductions Oklahoma Republicans have enacted consistently for nearly 15 years in order to lower the rate from 7 percent in 1998 to 5.25 percent today. It allows us to continue down that path in a responsible, methodical manner that won’t cause any taxpayers to pay more,” Steele said.

The new plan keeps the current tax bracket structure and personal exemption intact. The tax bracket structure change and personal exemption modification proposed in HB 3061 – the bill supported by Senate leaders – are among the reasons why some taxpayers would see a tax liability increase under HB 3061.

“The House won’t take up any bill that raises taxes. Raising taxes isn’t what conservatives stand for, it’s not what Republicans stand for and it’s not what the House stands for,” Steele said.

Rep. Leslie Obsorn, R-Mustang, said HB 3038 is a responsible way to continue the economic momentum Oklahoma has experienced in recent years.

“This is a simple, straightforward way to lower taxes without having to raise anyone’s taxes,” said Osborn, the principal House author of HB 3038. “It’s not overly complicated. It doesn’t pick winners and losers, like the previous plan. It just says when government revenues grow, tax reductions should occur. That’s what we fundamentally believe as Republicans.”

HB 3038 would not affect the proposed fiscal year 2013 state budget because it does not mandate a tax reduction in fiscal year 2013.

“It won’t cost us a cent next year,” said Rep. Earl Sears, R-Bartlesville, chairman of the House Appropriations and Budget Committee. “It’s a win-win deal. Tying these triggered tax cuts to actual growth makes them far easier to pay for because they won’t go into effect unless the state has far more revenue than it did the previous year.”

New income tax cut plan proposed by House Republicans

New proposal contains no tax increases

OKLAHOMA CITY – House Republicans plan to introduce a new income tax reduction measure Wednesday that ensures Oklahomans receive either an income tax reduction or no tax change at all.

“We came here to lower taxes for hardworking Oklahomans we’re going to do exactly that with this new plan,” said House Speaker Kris Steele, R-Shawnee. “We’re excited about this plan, we believe in this plan and we’re going to pass this plan along to the Senate. Anyone who is for lower taxes should be for this plan.”

The new plan proposes three growth triggers that would reduce the top personal income tax rate to 4.5 percent within three to ten years, dependent upon revenue growth. Each trigger would result in a .25 percent reduction. In order for the trigger to take effect, there must be a 5 percent annual growth in collections of motor vehicle taxes, use taxes, sales taxes, income taxes and corporate taxes apportioned to the general fund. The criteria for the triggers are the same criteria used for the trigger in HB 3061, the previous income tax reduction proposal.

The new income tax plan will be contained in an amended version of HB 3038 that will be introduced during the House General Conference Committee on Appropriations meeting at 1:30 p.m. Wednesday.

Speaker Kris Steele

“This plan is a lot like the tax reductions Oklahoma Republicans have enacted consistently for nearly 15 years in order to lower the rate from 7 percent in 1998 to 5.25 percent today. It allows us to continue down that path in a responsible, methodical manner that won’t cause any taxpayers to pay more,” Steele said.

The new plan keeps the current tax bracket structure and personal exemption intact. The tax bracket structure change and personal exemption modification proposed in HB 3061 are among the reasons why some taxpayers would see a tax liability increase under HB 3061.

“This House cannot fully embrace that plan because it would raise the tax liability of too many Oklahomans,” Steele said. “While the bill as a whole does represent a net tax decrease, we just can’t embrace the portion of it that leads to a tax increase. We had serious discussions about this matter and have come out more determined than ever to reduce taxes for all Oklahomans.”

House Republicans rallied in support of the new plan.

Rep. Leslie Osborn
R-Mustang

“This is a simple, straightforward way to lower taxes without any having to raise anyone’s taxes,” said Rep. Leslie Osborn, R-Mustang, the principal House author of HB 3038. “It’s not overly complicated. It just says when government revenues grow, tax reductions should occur. That’s what we fundamentally believe as Republicans.”

The new plan would not affect the proposed fiscal year 2013 state budget because it does not mandate a tax reduction in fiscal year 2013.

“It won’t cost us a cent next year,” said Rep. Earl Sears, R-Bartlesville, chairman of the House Appropriations and Budget Committee. “It’s a win-win deal.”

The earliest possible trigger would be for fiscal year 2014. Preliminary Tax Commission estimates show the cost of the first trigger as $120.5 million, $152.3 million for the second trigger and $172.9 million for the third trigger. The cost of each trigger would be spread across two fiscal years due to the difference between tax years and fiscal years.

“Tying these triggered tax cuts to actual growth makes them far easier to pay for because they won’t go into effect unless the state has far more revenue than it did the previous year,” Sears said.

Lawmakers outline $853 million in unnecessary government spending

OKLAHOMA CITY – Over $853 million in unnecessary state government spending of taxpayer dollars was outlined today by a group of lawmakers who want to use the savings to make Oklahoma a no-income-tax state.

The group is advancing a proposal to phase out Oklahoma’s personal income tax over 10 years.

“We believe Oklahoma should be the state where people keep more of the fruits of their labor than anywhere else,” said state Rep. Leslie Osborn, R-Mustang. “This will make us a magnet for job creators and set us on a path of vibrant economic growth and long-term prosperity.”

The group’s proposal aims to achieve full phase-out of the tax without raising other tax rates, negatively affecting core state government services, or harming retirees, senior citizens or veterans.

To do so, the lawmakers say their proposal requires a total of $525 million in total reductions in state government outlays that must be found over a two-year period. Because the savings can be found over two years instead of just one, annual savings found for Fiscal Year 2013 could also be counted again in Fiscal Year 2014 toward the total savings necessary.

In offering a list of $853 million in total savings options over the next two budget years, the lawmakers maintain there is plenty of room to reduce wasteful, unnecessary state spending while avoiding cutting core services, and still put Oklahoma on track to become the tenth state in the nation without a personal income tax.

“We can make these reductions and not touch one dollar of actual core spending in education, transportation, public safety, or the safety net for the truly needy,” said state Rep. David Brumbaugh, R-Broken Arrow. “In return, we can repeal our state’s income tax in a responsible amount of time and see an influx of new jobs and investment in Oklahoma at levels we’ve not seen before.”

The list of $853 million over two years includes savings from three areas: wasteful, inefficient or unnecessary state expenditures; corporate tax credits that have not exhibited a high enough return on taxpayer investment; and modernization, consolidation and technology reforms within state government bureaucracy that are still in the process of being implemented.

“Some of our colleagues may feel uneasy about eliminating taxpayer subsidies for things like golf courses or rodeos that may be in their home district,” said state Rep. Tom Newell, R-Seminole. “Or they may think it’s inconvenient to make state agencies operate efficiently. But our constituents sent us to the Capitol to use common sense and fix what needs fixing. And they don’t deserve for their hard-earned tax dollars to be spent wastefully.”

Newell said the goal in releasing the list was to compile credible savings ideas from several sources. Working from this list, the lawmakers hope to encourage their colleagues to build a consensus around which areas of nonessential state spending could be trimmed over the next two years.

One source lawmakers credited was the work in recent months by state Rep. David Dank, chair of the House Appropriations & Budget Subcommittee on Revenue & Taxation, and state Sen. Mike Mazzei, chair of the Senate Finance Committee, to bring attention to ineffective corporate tax credits.

Another acknowledged source was a recently released list of state budget reduction ideas from the Oklahoma Council of Public Affairs (OCPA), a free-market think tank.

State Rep. Charles Ortega said he and his colleagues, when examining the savings recommendations from these and other sources, adopted some and left others for another day.

“The goal here is to put together good ideas from several different places and start reaching a consensus on what’s possible, both politically and practically, in order to find enough savings to phase out our income tax,” said Ortega, R-Altus. “We have great respect for the ideas put forward in recent weeks and months by Chairman Dank, Chairman Mazzei, groups like OCPA and others. Some of these ideas have legs right now, and some may not. We believe repealing Oklahoma’s income tax is essential for our state, so we’re asking our colleagues to work with us to determine where we can reduce unnecessary taxpayer expenditures in order to make it happen.”

Click here to see a list of suggested cuts

Lawmakers Study Privatization of State Parks, Golf Courses

OKLAHOMA CITY (September 1, 2011) – Public-private partnerships like those used by the U.S. Forestry Service could be the model for Oklahoma to run state parks more efficiently, the fiscal policy director for the Oklahoma Council of Public Affairs told lawmakers today.

Jonathan Small
Fiscal Policy Director
Oklahoma Council of Public Affairs

Jonathan Small, OCPA fiscal policy director and a certified public accountant, said privatizing some park operations is one of the few things the federal government has done right.

“One of the things the federal government has done right is outsource the complete operation of many U.S. Forestry Service federal parks,” Small said. “The U.S. Forestry Service has approximately 300 private concession contracts fully operating hundreds of parks throughout the United States. In many cases, these privatization arrangements have resulted in savings of millions of dollars to states and the federal government.”

Rep. Leslie Osborn
R-Mustang

State Rep. Leslie Osborn said with legislative efforts to reduce the size of state government, privatization is a good tool to avoid elimination of a program or state-owned asset.

“The private sector can run these state parks better than our state government and save taxpayers money that they would probably put to better use,” Osborn said. “I think our state needs to move towards public-private partnerships to run its parks.”

More than 11 million people visited state parks in 2010 and more than 79,000 rounds of golf were played at state golf courses, according to the Oklahoma Tourism and Recreation Department’s presentation.

The study also focused on the location of state parks. After Oct. 1, 2011, there will be 35 state-run parks. Ten of these parks are located west of Interstate 35, while 25 parks are located east of the interstate. Only six of the parks are located in the six most populous Oklahoma counties. The state ranks 22 out of 50 states in parks per capita.

State golf courses are 81 percent self-sufficient, but the tourism agency is working to make them 100 percent self-sufficient.

Deby Snodgrass
Director, Oklahoma Tourism &
Recreation Department

Osborn and Small both praised current Oklahoma Tourism and Recreation Department Director Deby Snodgrass for her efforts to make the operation of state parks more efficient.

“I appreciate the steps Director Snodgrass has taken to reduce costs,” Osborn said. “With Director Snodgrass’s strong leadership, it should be easy for lawmakers to work with her in finding ways to improve the efficiency of the state park system.” 

“Director Deby Snodgrass and the OTRD should be commended for their leadership and effort to operate state parks in an efficient manner that minimizes the use of taxpayer dollars. Increased privatization can add to the success and stewardship that is taking place at the OTRD thanks to the new leadership of Director Snodgrass,” Small said.