Tag Archives: tax consumers

Pro-779 ad makes false, blatantly misleading claims

This week, the group Oklahoma’s Children, Our Future unveiled an ad supporting State Question 779, the permanent, 1% statewide sales tax on the Nov. 8 ballot in Oklahoma.

Together, the ad and an accompanying post on the group’s website make four claims, three of which are most certainly false, while the fourth is blatantly misleading.

Claim #1: 60% of the 779 tax money “will go toward teachers.”

The Facts: It’s shocking that 779’s supporters are trying to present as a positive that 40% of the money from 779’s sales tax increase – 40 cents of every dollar taken from working Oklahomans – would not be spent on teachers.

The reality, though, is even worse: only 39% – not 60%, as the pro-779 ad suggests – of the 779 tax money would be required to go to teacher salaries or benefits. It’s possible, though not guaranteed, this number could ultimately be higher, but there is nothing in 779’s fine print requiring more than 39% of the 779 tax money to go to teacher compensation.

Let’s clarify how we calculated 39%. Proponents of 779 say the measure will bring in $615 million in new tax money each year, via 779’s sales tax increase on working Oklahomans. According to the National Education Assoc. and the Oklahoma State Dept. of Education, there are approx. 42,027 public school classroom teachers in Oklahoma. To provide each with a $5,000 salary increase, factoring in a multiplier of .17 for FICA and other employment-related costs, would cost $245 million.

A simple division calculation reveals that the cost of providing the $5,000 teacher salary boost – $245 million – is 39% of the total 779 is projected to generate – $615 million.

245 / 615 = 39%

After the teacher pay raise dollars are taken out, this particular pot of 779 money – one of five different pots detailed in 779’s fine print – would have $123.9 million remaining.

In 779’s fine print, the only requirement for this $123.9 million is that it be spent to “otherwise address and prevent teacher and certified instructional staff shortages in the manner most suited to local district circumstances and needs.”

That’s it. No requirement to hire more teachers. No requirement to spend the money on teacher salaries, benefits or other compensation.

Experience suggests that, while some local school district officials would use these extra funds to hire more teachers or further increase teacher compensation, others would not.

Verdict: The claim by Oklahoma’s Children, Our Future is false. Only 39% of the 779 tax money is required to go to teacher compensation.

Claim #2: “Every single penny” of the 779 tax money has annual audit requirements built in.

The Facts: In its descriptions of the five different pots of 779 tax money, 779’s fine print only includes audit requirements for two of the pots – the pot from which the teacher pay raise funds will be drawn, and the pot designated for “programs, opportunities, or reforms” to improve reading, boost high school graduation rates, and “increase college and career readiness.”

The other three pots – the $118.3 million lump sum for Higher Education, the $19.9 million lump sum for Career Tech, and the $49.2 million lump sum for the State Dept. of Education – feature no audit requirements whatsoever.

After everything is tabulated, 70% of the 779 tax money will include audit requirements, while 30% will not.

Verdict: The claim by Oklahoma’s Children, Our Future is false. Only 70% of the 779 tax money includes audit requirements.

Claim #3: The 779 tax money cannot be spent on “administrative overhead.”

The Facts: From 779’s fine print:

“None of these monies distributed from the (779 fund) to common school districts may be used to add superintendent positions or increase superintendents’ salaries.”

That’s it. No restrictions on adding positions or increasing salaries for assistant superintendents, administrative assistants, principals, vice-principals, assistant principals, curriculum directors, IT support staff, coaches, program directors, communications officers, chiefs of staff, athletic directors, etc.

Verdict: The claim by Oklahoma’s Children, Our Future is false. Portions of the 779 tax money may be spent on administrative overhead.

Claim #4: Since 779 would be locked into the Oklahoma Constitution, the 779 tax money would be kept out of “the meddling hands of politicians.”

The Facts: Disparaging politicians and their “meddling hands” is a time-honored American tradition, practiced with great wit by Mark Twain, Will Rogers and other luminaries.

In this case, however, it’s merely a ploy to distract voters away from the fact that 779 will: (a) require all Oklahomans, regardless of income, to pay the highest permanent sales tax burden in the nation, and (b) provide state government bureaucrats and school administrators with the constitutional protection to spend up to 60% of the 779 tax money on stuff other than teacher compensation.

Ultimately, whether 779 is approved or rejected on the ballot may come down to Oklahoma voters determining which group they trust the most … or, perhaps, distrust the least: publicly-elected politicians at the state Capitol, or un-elected state government bureaucrats and school administrators.

For many Oklahoma voters, that may be a tough call. Either way, the claim by Oklahoma’s Children, Our Future is blatantly misleading.

Re-branded, ObamaCare’s Medicaid expansion still wrong for Oklahoma

A top priority for OCPA Impact has been for Oklahoma to hold firm on not implementing the optional expansion of Medicaid prescribed by the Affordable Care Act (“ObamaCare”).

To her credit, Gov. Mary Fallin has maintained Oklahoma will not adopt Medicaid expansion (link).

As pointed out by the Oklahoma Council of Public Affairs (link), Medicaid expansion would cost Oklahoma taxpayers hundreds of millions in additional dollars, as thousands of able-bodied, childless adults with income under 133% of the federal poverty level would be added to this federal entitlement.

Unlike most federal entitlements, Medicaid, while funded in part by the federal government, is primarily administered by state governments.

A recent piece in the Wall Street Journal (link) is a stark reminder that states that have accepted the ACA’s Medicaid expansion to increase enrollments have seen billions of dollars in unanticipated cost overruns.

Now, state government bureaucrats in Oklahoma want to use the current $1.3 billion state government budget shortfall as an excuse to squeeze in a re-branded version of the ACA’s Medicaid expansion (link).

The Oklahoma Health Care Authority, the state’s Medicaid agency, is pushing what it calls its “Medicaid Rebalancing” plan. A proposed 150% tax increase on cigarettes (link), which OCPA Impact opposes (link), is intended to fund the plan.

In a recent Journal Record column (link), OCPA’s Jonathan Small stated that the OHCA’s “Rebalancing” plan is, in fact, ObamaCare’s Medicaid expansion:

“With this attempt, OHCA bureaucrats have tried to box policymakers in by using a set of public relations tactics. First, the OHCA warned the Medicaid program may end. Then, the OHCA declared Medicaid (a taxpayer-funded entitlement program) the largest health insurer in the state. Then, the OHCA warned of cuts to the program, by way of provider cuts of 25 percent. Of course, the media ran with that story, stoking frenzy.”

More:

“Nearly 27 percent of Oklahomans were enrolled in the Medicaid program during the most recent fiscal year according to the OHCA. If they get their way with their plan, then nearly 33 percent of Oklahomans will have their health care paid for nearly in full by government. This wouldn’t even take into account Medicare.

“Without the ACA Medicaid expansion, Oklahoma’s spending on Medicaid has grown largely because of the number of people on the program and previous expansions proffered by OHCA.

“Now, to swindle policymakers into a proposal that will incentivize people to decrease work and drop private health care coverage to gain subsidies, OHCA bureaucrats say their plan should be tried because they will release some currently on the Medicaid program to the treacherous, federally funded Obamacare exchange.

More:

“Expanding government health care or welfare programs is bad policy and short-sighted whether oil is $100 a barrel or $30 a barrel. This is just a planted and dangerous distraction from lawmakers prioritizing spending in a tough budget year and providing the pay raise for teachers that they should by the end of this legislative session.”

Still, serious concerns exist about possible closures for health facilities located outside Oklahoma’s metro areas.

Unfortunately, the response from state bureaucrats has been to propose increasing the number of Oklahomans dependent on government for their health care and increasing our state’s dependency on federal dollars.

The OHCA’s “Rebalancing” plan is not intended to merely maintain Oklahoma’s current Medicaid levels. Rather, it would increase by at least 175,000 the number of Oklahomans enrolled in government-funded health care.

Thankfully, other routes are available. OCPA Impact has already helped successfully promote reforms, proven elsewhere — including in Florida and Louisiana — to reform Medicaid in Oklahoma. The goal should be to bring down the cost curve for taxpayers and increase sustainability without reducing quality of service for people eligible for the program.

OCPA Impact’s 2015 legislative scorecard (link) featured House Bill 1566, which Gov. Fallin signed into law to begin these reforms in Oklahoma. But the OHCA has been slow to implement the measure.

An additional option would be for Oklahoma lawmakers to use a portion of the investment earnings from the Tobacco Settlement Endowment Trust (TSET) to provide stopgap funding for health facilities outside the metro areas that are truly in need in Oklahoma’s current economic climate.

OCPA Impact will continue working to help keep ObamaCare’s costly Medicaid expansion out of Oklahoma.

Tax consumers working to prevent union dues reform

As the push for smaller government and greater economic freedom in Oklahoma continues, tax consumers don’t like it.

A notable success on behalf of taxpayers during Oklahoma’s 2015 legislative session was passage of House Bill 1749. The measure was a Scott Walker-style reform, enacting paycheck protection to safeguard taxpayers from government-sector unions that collectively bargain against state government agencies or school districts. (More on the reform here.)

Following the law’s passage, the Tulsa World reported the state’s leading teachers union was advising school districts that HB 1749 was unenforceable, and districts needed to continue processing union dues payments.

Now, however, it appears the unions are truly concerned the new law is enforceable. So they are taking legal action to try and stop it.

On Aug. 19, The Oklahoman reported the unions have filed a lawsuit in Oklahoma County District Court seeking to throw out the law.

Attorney General Scott Pruitt is now responsible for defending the new law, which is set to take effect Nov. 1.

Oklahoma Labor Commissioner Mark Costello summed up the paycheck protection issue well in a Feb. 18 Tulsa World piece:

“One of the major reforms adopted in Wisconsin under the leadership of Gov. Scott Walker was to get government out of the business of collecting union dues. Oklahoma has a chance to follow Walker’s lead. . . . What union officials should not expect is for Oklahoma taxpayers to prop them up by using state and local government as their dues collection agency.”

For years, Oklahoma government unions were happy to let taxpayers facilitate their funding streams. Now, they don’t want the good times to end.

But Oklahoma taxpayers aren’t forced to facilitate membership dues to the National Rifle Association for an employee of state government or of a school district. Nor are they required to facilitate monthly tithes to an employee’s church.

In the same way, Oklahoma taxpayers should not be forced to facilitate dues payments for unions that aggressively lobby for more taxpayer money.