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.

Strong Income Tax Receipts, September Collections Resume Rise

OKLAHOMA CITY – Revenue collections ticked up in September, pushed by strong income tax remittances, State Treasurer Ken Miller announced this week as he released the monthly gross receipts to the treasury report.

Total collections were almost three percent higher than in September of last year. Three of the four major tax categories were positive, with income tax leading the way up almost 16 percent. Sales tax and motor vehicle receipts also showed growth.

Collections from the gross production tax on oil and natural gas remained well below prior year totals, down almost 40 percent, but off their low of 54 percent below the prior year in August, indicating we may have turned a corner, Miller said.

“Oklahoma’s economy continues to climb up the expansion side of the business cycle in spite of low prices for natural gas,” Miller said. “After two years of sharp growth in revenues, collections have leveled off over the past half year as we close in our all time high from December 2008.”

The positive turn on gross receipts comes after collections dropped below the prior year during three of the past seven months, including August. However, oil and natural gas production collections have been consistently lower than the prior year for 10 months.

“Sales tax collections, generally viewed as a measure of consumer confidence, are up almost six percent in September,” Miller said. “This is obviously a good sign, even though sales tax has been growing by double digits for much of the past year.”

Tribal gaming fee growth slowing

Oklahoma State Capitol - After experiencing several years of extensive growth, state collection of fees on tribal gaming are showing signs of leveling off.

While fees paid to the state by tribal nations for use of electronic and card games covered by compacts has grown from $14.2 million in Fiscal Year 2006 to $123.9 million in Fiscal Year 2012, officials believe collections could be at or near their peak.

Read more in Treasurer Ken Miller’s Oklahoma Economic Report released last week.

June Revenue Collections Fall Below Prior Year

OKLAHOMA CITY – Oklahoma finished the fiscal year well into the black, but the last month saw the largest decline of the year in gross production tax collections, State Treasurer Ken Miller announced today as he released the gross receipts report for June and fiscal year 2012.


Total collections in June were pushed negative compared to the same month of the prior year due to a 42 percent drop in gross production collections. It was also the seventh consecutive monthly decline in gross production tax collections from the same month of the last year. June marked only the second month in the fiscal year where total collections dipped below the prior year.

“Reductions in gross production and personal income tax collections combine to set our monthly number back, but other economic indicators, such as sales receipts, low unemployment and solid corporate profits, point to continued expansion,” Miller said.


June collections are down by 0.6 percent from June of last year, Miller said. That compares to average growth during FY 2012 of 7.7 percent, including a 10.3 percent increase in income tax collections.


Natural gas prices and timing

Miller Issues June Economic Report

State Treasurer Ken Miller released his June Economic Report over the weekend.


Miller says in the report:

"States have less than six months to prepare for the first set of consequences of Washington’s inability to reach agreement on reducing the national debt. The last battle over raising the federal government’s debt limit resulted in the Budget Control Act of 2011 that mandates $1.2 trillion in spending cuts over 10 years, beginning January 2013.

"One likely place federal spending will be reduced is in payments to state governments for operation of mandated programs."

Click here to read the full report 

Total Collections Grow in May as Gross Production Continues Slide

OKLAHOMA CITY – Even though natural gas and crude oil prices are lower than expected, Oklahoma’s total revenue collections continue to rise, driven primarily by income and sales, State Treasurer Ken Miller said today as he released the monthly gross receipts report for May.

Ken Miller

“With incomes climbing and sales tax collections on the rise, Oklahomans continue to show confidence in the economy in spite of renewed global uncertainty and a pullback in U.S. job growth,” Miller said.

May collections are up by 5.8 percent from May of last year, Miller said. That compares to average growth over the past 12 months of 9.2 percent.

Watching natural gas and oil prices

Two-year Revenue Growth Streak Ends as Collections Fall

OKLAHOMA CITY – Oklahoma’s two-year revenue growth streak has come to an end as total revenue collections in March fell slightly lower than collections from the same month last year, State Treasurer Ken Miller said last week as he released the March gross receipts report.

Total collections for the month were $920.6 million, down by about $2.6 million or 0.3 percent from March of last year. Miller said the biggest drop among the major sources of revenue came from the gross production tax, which fell by more than one-third.

Income tax collections were lower for the first time in eight months with negative corporate income tax collections weighing down the slightly positive personal income tax receipts.

Sales tax receipts are the only major revenue source that outperformed the previous year with collections surging 15 percent compared to March 2011.

Watching the energy sector

“In the coming months, we will closely watch the energy sector as it is a leading sector of Oklahoma’s economy,” Miller said.

Gross production collections were down in March for a fourth consecutive month, reflecting the impact of low natural gas prices. On Monday, the spot price of natural gas closed at its lowest point for the year, below $1.90 per thousand cubic feet (mcf), at the Henry Hub in Louisiana, the primary marketplace for Oklahoma-produced natural gas.

“While one month does not a trend make in overall revenue collections, four continuous months of decreasing gross production collections is getting trendy,” Miller said. “And due to the timing of gross production collections, March receipts reflect market activity from January. We should expect a period of shrinking natural gas tax collections until prices rebound, especially if the price triggers a lower extraction tax rate.”

Miller said state financial authorities will keep a close eye on natural gas prices.

“Next year’s official revenue estimate reflects natural gas at $3.64 per mcf,” he said. “In addition, state law mandates the currently assessed tax rate of seven percent be lowered to four percent if the average monthly price falls below $2.10 per mcf.”

Miller said the energy sector, which helped bolster Oklahoma’s recovery from the national recession, is tied to approximately one-third of the state’s economic activity.

“Undoubtedly, the strong price of crude oil is helping to compensate for the downturn in natural gas prices,” he said.

The exact percentage of gross production revenue generated by natural gas in March is not yet calculated, but the trend over the past several months has been downward. In October, it was 51 percent. In February, it was 35 percent.

Some positive news

Oklahoma Economy Celebrating 22 Consecutive Months of Growth

OKLAHOMA CITY – Oklahoma’s economy quickened the pace of its recovery during 2011, State Treasurer Ken Miller said yesterday as he released the state’s monthly gross receipts report.

“December was 11.1 percent better than the prior year, the fourth quarter was 10.5 percent ahead of the final three months of 2010, and total year collections surpassed the previous year by 9.6 percent,” Miller said. “We saw healthy growth each month ranging from four to 16 percent with an average at the double-digit mark.”

Miller said December was the fifth time in the past eight months that collections rose by more than 10 percent over the prior year and marked the 22nd consecutive month of growth.

“Twelve-month collections now stand more than $1.3 billion higher than in February of 2010. Since we hit the trough almost two years ago, more than 68 percent of the revenue lost from our peak in December 2008 has been recovered,” he said.

Miller said sales tax collections indicate a happy holiday shopping season in Oklahoma. December collections, reflecting sales between mid-November and mid-December, were $20.42 million or 6.3 percent higher than the last Christmas shopping season.

Looking forward

National and state-specific forecasts point toward continued economic improvement.

Recent Bureau of Labor Statistics data list Oklahoma with year-over-year employment growth of three percent, surpassing all surrounding states. The closest competitor was Texas with growth of 2.2 percent.

A U.S. Chamber of Commerce report shows Oklahoma with the nation’s fourth lowest unemployment rate, adding jobs 3.5 times faster than the national rate in 2011.

During the past 12 months, figures from the Oklahoma Employment Security Commission and Bureau of Labor Statistics show the number of jobs grew by almost 16,500, while the labor force grew by just more than 3,000. During that time, the unemployment rate dropped from 6.9 percent to 6.1 percent.

Nationally, The Conference Board reports consumer confidence grew in December from the month before and now stands at levels not seen since April. Closer to home, the Creighton University Economic Forecasting Group anticipates Oklahoma in 2012 will have the second highest growth in gross state product in the nine-state Mid-America region at 4.6 percent. North Dakota is forecast to grow at 6.8 percent.

December collections

Board of Equalization funds OHLAP, but designates use of agency reserve

By Patrick B. McGuigan at CapitolBeatOK.com (Published: 20-Dec-2011) 

The Oklahoma Board of Equalization (BOE), chaired by Governor Mary Falllin, met today (Tuesday, December 20) to fulfill statutory requirements to give preliminary certification to general revenues available for appropriation during the 2012 Legislature. The seven-member panel fulfilled its required function at its regularly-scheduled gathering, but also unexpectedly boosted anticipated funds available for general appropriation by $6 million. 

Mid-way through the meeting, during what was expected to be a routine discussion as prelude to BOE approval of $63 million for “Oklahoma’s Promise” scholarships administered by the Higher Regents, Treasurer Ken Miller asked staff about the program reserve fund. That’s when members of the Board were told the reserve was about $15 million.

(The Office of State Finance later confirmed the precise figure is $14,530,300.85, a sum that should increase when additional dollars are transferred shortly.) 

The information provoked discussion and introspection among members of the board. Legal counsel for the state government confirmed the BOE could approve less than the $63 million requested, but fully fund the program request by specifying that some of the reserve could be used for the difference. 

Miller and others on the board made it clear they supported “full funding.” At the same time, Miller articulated a view, apparently shared by every member, that “a more rational reserve balance” seemed in order. It was clarified in discussion with staff and counsel that the reserve may only be used for scholarship awards, and not for other purposes. 

In the end, state Auditor & Inspector Gary Jones moved, and Treasurer Miller seconded, a motion to fulfill the $63 million request for funding of the higher education scholarships, directing $57 million from general revenue and the remaining $6 million from the OHLAP reserve. 

Oklahoma Has Regained Nearly 60% of Pre-Recession Revenue

OKLAHOMA CITY – In spite of external threats, volatile markets and global instability, Oklahoma’s economy is rising above the chaos, State Treasurer Ken Miller said today as he released the state’s monthly gross receipts report.

“With yet another month of healthy collections, it appears Oklahoma’s economy is hitting its stride,” Miller said.

October collections were 7.4 percent higher than in October of last year, showing steady improvement in the state’s economy. Collections over the past 12 months are up almost nine percent from the previous 12 months.

Treasurer Ken Miller

Miller said gross revenue, a reflection of the state’s economic performance, has grown for 20 consecutive months.

“We have regained almost 60 percent of the revenue that disappeared during the recession,” he said. “We saw a more than $1.9 billion drop in 12-month receipts between December 2008 and February 2010. Since then, we have seen an increase of more than $1.1 billion.”

Oklahoma: A positive example

As world financial markets react to uncertainty in Washington, Europe and the Middle East, Miller said Oklahoma’s economy is setting a positive example.

“Oklahoma’s two major revenue streams, income tax and sales tax, are showing remarkable resilience,” he said. “Income tax collections – up by almost 12 percent this month – show Oklahomans are making more money, and sales tax collections – up by almost nine percent – show we are also gaining confidence.”

Miller said the latest Business Conditions Index for Oklahoma continues to reflect a positive outlook for the state’s economy. The index for October shows anticipated growth for the next three to six months.

Oklahoma Economic Report Released for October

State Treasurer Ken Miller has released the October edition of the Oklahoma Economic Report. 

Stories this month include:

• Guest commentary by Governor Mary Fallin
• Tax reform brewing
• Oklahoma economy shows steady growth
• First quarter general revenue exceeds estimate
• Gross receipts vs. General Revenue Fund
• Economic Indicators

Oklahoma Economy Shows Steady Growth in September

Treasurer Miller says external threats to economy were “kept at bay”

Treasurer Ken Miller

OKLAHOMA CITY – More than 18 months after revenues began climbing from the depths of the Great Recession, the Oklahoma economy is again showing steady growth across all sectors, State Treasurer Ken Miller said today as he released the state’s monthly gross revenue report.

September collections were 7.1 percent higher than in September of last year, a more moderate growth rate than what was recorded in June and August of this year when year-over-year growth topped 15 percent each month.

Miller said collections over the past 12 months total $10.43 billion, the highest level in 27 months when12-month collections in June 2009 totaled $10.57 billion.

It’s a good thing

Oklahoma Economy Hot in August

OKLAHOMA CITY – Oklahoma’s economy matched the temperatures in August, as revenue collection grew at a double-digit pace in spite of concerns of a worldwide slowdown, State Treasurer Ken Miller said today as he released the state’s monthly revenue report.

 August collections were 15.2 percent higher than in August of last year, nearly matching the year-over-year growth of 15.5 percent recorded in June. Monthly collections moderated slightly in July at 6.8 percent growth from the prior year.

Miller said collections over the past 12 months total $10.37 billion, the highest level since July 2009 when 12-month collections totaled $10.402 billion.

“During the prolonged recession, 12-month collections in Oklahoma dropped by more than $1.9 billion between December 2008 and February 2010,” he said. “As of August, we have recovered $1 billion, or more than 50 percent of that lost economic activity.”

State economic signs remain positive

Miller said other recent data signal a positive economic outlook for Oklahoma, albeit somewhat subdued.

The August Oklahoma Business Conditions Index shows expected growth in the coming months. However, the index at 56.8 is down from July’s rate of 61.9, showing consumer confidence has waned. A number above 50 indicates economic growth, while a lower number anticipates contraction.

“Understandably, people are concerned about what they’re hearing on the news about the credit downgrade, sovereign debt problems, geopolitical events and volatility in the stock market,” Miller said. “However, many Oklahomans recognize that the economy here has performed much better than elsewhere.”

July statewide unemployment rose to 5.5 percent, or by one-tenth of one percent from June, while county-by-county unemployment rates dropped in all but five of Oklahoma’s 77 counties.

Gross production taxes on oil and natural gas are showing the biggest gains in revenue collections, measured both over the past 12 months and for August, but some slowdown is expected in the coming months.

Gross production taxes, also known as severance or extraction taxes, are paid two to three months after the production occurs. Three months ago, crude oil was selling for 10 to 15 percent more than today’s prices, which means gross production collections in August are reflective of those higher prices.

Treasurer Ken Miller

“While natural gas prices have remained steady over the past several months, the drop in crude oil prices is expected to be reflected in state collections,” Miller said. “Unless crude oil production volume was increased when the price dropped, less gross production revenue will be paid to the state during the next quarter.”

August collections boom

The revenue report for August shows gross collections at $842.86 million, up $111.26 million or 15.2 percent from August of last year.

Gross income tax collections, a combination of personal and corporate income taxes, generated $238.63 million, an increase of $44.63 million or 23 percent from the previous August.

Personal income tax collections for the month are $233.57 million, up $44.37 million or 23.5 percent from the prior year. Corporate collections are $5.06 million, an increase of $0.26 million or 5.4 percent.

Sales tax collections, including remittances on behalf of cities and counties, total $323.53 million in August. That is $18.11 million or 5.9 percent above August of last year.

Gross production taxes on oil and gas generated $101.33 million in August, an increase of $29.71 million or 41.5 percent from last August. Compared to July reports, gross production collections are down by $1.48 million or 1.4 percent.

Motor vehicle taxes produced $60.27 million, up by $6.21 million or 11.5 percent from the prior year.

Other collections, consisting of about 60 different sources including taxes on fuel, tobacco, horse race gambling and alcoholic beverages, produced $119.1 million during the month. That is $12.6 million or 11.8 percent higher than last August.

Twelve-month collections demonstrate growth

School readiness partnership plans to make recommendations to Governor Mary Fallin

By Patrick B. McGuigan at www.CapitolBeatOK.com (Published: 19-Aug-2011) 

At a Thursday afternoon meeting in Oklahoma City, leaders of several organizations in early childhood education advocacy or services gathered to read (and, in the end, endorse) policy recommendations that will be forwarded to Governor Mary Fallin this fall. As the recommendations were discussed, however, a new public opinion poll documented that many voters are dubious about further expansion of government programs to provide early childhood education.

The recommendations come from the Oklahoma Partnership for School Readiness (OPSR), a group established in 2003. The partnership's mission is described as “to lead Oklahoma in coordinating an early childhood system focused on strengthening families and school readiness for all children.” The organization's vision is characterized as seeking to assure “ that all Oklahoma children will be safe, healthy, eager to learn and ready to succeed by the time they enter school.”

Since 2010, OPSR has carried on the duties of the State Early Childhood Advisory Council (SECAC). 

The 2012 policy recommendations remain in draft stage, and can be read on the website of Smart Start Oklahoma. Leaders of Smart Start Oklahoma told CapitolBeatOK the draft document will include comments made at Thursday's meeting, and that the text of the recommendations will not be finalized until August 31. 

Crisis of Confidence: State Treasurer Still Optimistic About Economy

By State Treasurer Ken Miller (Aug. 19, 2008)

OKLAHOMA CITY - It is widely understood that a free market economy has many variables on which growth is dependent. Less understood is the impact of the intangible determinant called confidence – how people feel about their financial situation, business and the direction of the country.

Lately, there has been a great deal of attention focused on this translucent and sometimes irrational economic variable. Such discussions center on how recent events affect public confidence. 

The consensus is that insufficient fiscal policies, the credit downgrade, debt problems here and abroad, geopolitical events and volatility in the stock market have lessened consumer, producer and investor confidence and have contributed to anemic GDP and job growth.

An economist from Moody’s rating agency blamed the current economic malaise on a “crisis of confidence.” The fear is that the negativity will create a self-fulfilling prophecy resulting in a vicious downward cycle and another recession.

July Revenue Shows Moderated Economic Growth

OKLAHOMA CITY – July revenues show moderate economic growth as collections continue to beat the prior year, although collections have pulled back from the double-digit numbers seen last month, Treasurer Ken Miller said earlier this week as he released the state’s monthly gross revenue report.

“July collections were up by 6.8 percent from July of last year and 14.4 percent above July 2009,” Miller said. “With year-over-year growth last month exceptionally strong at 15.5 percent, it is not surprising to see growth moderate some this month.”

Miller said collections over the past 12 months totaled $10.259 billion; the highest level since July 2009, when 12-month collections totaled $10.402 billion.

Read the full report by clicking http://nelsone.ws/o2W824

Treasurer's Commentary: It's the spending, stupid!

By State Treasurer Ken Miller

Ken Miller

While recent reports show state economic prospects heating up, no recovery is guaranteed. Oklahoma is not immune from macroeconomic conditions or bad decisions made in our nation’s capitol. Unfortunately, the current Washington stalemate threatens our economic recovery just as it’s catching fire.

With the federal government borrowing 40-cents of every dollar spent, much focus is on the US debt crisis. In the last 10 years alone, the gross federal debt has ballooned about 150 percent from $5.8 trillion to $14.3 trillion. This is an increase from 56 percent of GDP in 2001 to more than 100 percent today. The cause is simple – it’s the spending, stupid!

June Revenue Shows State Economic Growth Accelerating

Treasurer warns Washington inaction on debt could harm state recovery

Oklahoma’s economy is expanding at an accelerating pace, Treasurer Ken Miller said yesterday as he released the revenue report on total tax commission collections in June.


“Now entering the third year of the cyclical expansion, Oklahoma’s double-digit revenue growth last month shows our state’s economy is clearly regaining its strength while the national economy continues its rather anemic growth.” Miller said.


“Gross receipts, reflecting a cross-section of the state’s economic activity, are encouraging from top to bottom,” he said. “Again this month, every major category shows growth with earnings and consumption especially strong.”


June collections compared to a year ago surged by more than 15 percent, the report from the state treasurer’s office shows. Collections for the past 12 months are almost eight percent above the trailing 12 months, according to the report. “Month after month, the Oklahoma economy gains steam,” Miller said. 


External Threats


Click here to read the full report

State Treasurer Posts June Economic Report

Treasurer Ken Miller

The June edition of the Oklahoma Economic Report from the State Treasurer's Office is now available.
Click here to read it.

The report is also available at the Treasurer's web site: www.treasurer.ok.gov

Stories this month include:

• Cash in the attic
• Treasurer’s Commentary: Zero tolerance
• Revenue collections reach recovery milestone
• Larger Rainy Day Fund deposit expected
• Capital markets snapshot & Economic Indicators

Twelve-Month Receipts Top $10 Billion

The State Treasurer’s May revenue report shows Oklahoma’s economy has made up more than one-third of the dollars lost during the Great Recession, State Treasurer Ken Miller said today.


Milestone Reached
Twelve-month receipts ending in May are $10.071 billion, marking the first time since August 2009 that the 12-month total has topped $10 billion.

Treasurer Ken Miller

“Oklahoma’s economy has made great strides in the past year,” Miller said. “We see improving health in virtually every economic sector measured by revenue collections. The latest report on unemployment also brings good news. With April’s preliminary rate set at 5.6 percent, the report shows that our private sector continues to add much needed jobs as we try to get back to full employment.”


The last time Oklahoma’s unemployment rate was lower was in February 2009, when it was 5.5 percent. The lowest unemployment rate for Oklahoma in the past 35 years is 2.8 percent recorded in December 2000.


Revenue collections peaked in December 2008 with a 12-month total of $11.283 billion. Totals dropped steeply during the next 13 months, bottoming out in February 2010 at $9.364 billion. Each month since then, receipts have increased at a slightly accelerating pace.