Budget Cuts

Reality over Rhetoric

Reality over Rhetoric - December 23, 2018

State Representative David Perryman

When I was about four years old, a family in town had agreed to purchase a full-blood Boxer pup from friends of theirs who had a beautiful female Boxer. However, somewhere along the line the mama Boxer had been visited by a bird dog and the pup looked more like Petey, from the old Little Rascal show than an AKC registered Boxer.

By chance, we were without a dog and the rejected pup came to live with us. We named him Bozo and what we got was truly a faithful friend and companion. He had the heart of Lassie, the adventure of RinTinTin, and the valor of Rex the Wonder Dog. No amount of money could have purchased a better companion for my brother and me as we experienced special times and special places exploring the countryside from one end to the other.

The bond that I had with that mongrel named Bozo helped instill my deeply held conviction that true friends are not normally those from wealth and privilege, but instead are those who may simply need a fair shake, a kind word or a helping hand to boost their confidence and give them a sense of self-worth.

Several years later, Mom and Dad purchased a nicer home with additional land for our cow-calf operation. Cross country, the new place was about four miles from the old one and Bozo who was by then an old dog had a hard time with the move. Every few days, he would disappear. We would drive out to check cattle and there he would be laying on the front porch of the old house coping with his inability to face the reality of our move. Each time we would load him up and take him back to the new place he seemed feebler. Then one day, Bozo just didn’t show up. We searched but could not find him.

In retrospect, it is difficult to imagine the emotional torment that Bozo faced. He could not overcome his rhetorical logic that returning to the familiarity of the old house would bring normalcy. He was unable to face the reality of our move and his new surroundings.

Rhetoric is like that. It causes us to ignore reality.

Oklahoma’s state government is in crisis. Responses based on dogmatic rhetoric present themselves as failed leadership and an inability to address the reality of the issues we face. Instead of properly funding state agencies, our leaders are chronically unable to overcome the rhetoric of the day.

When I was first elected to the legislature, the buzz word was Zero Based Budgeting, defined as the theory that the state would save money and eliminate waste if the budget of every state agency were stripped to zero and each agency were required to justify every dollar requested. When legislative leaders realized that budget requests were justified and state government was woefully underfunded, the call for Zero Based Budgeting quietly dissipated pending renewal by some unwitting future legislator.

The current rhetoric at the Capitol supports granting private entities contracts for expensive audits on state agencies. In reality, the evidence shows that the costs of the audits exceed any minimal waste that may be eliminated. The irony is that the budget of the State Auditor and Inspector who has the constitutional responsibility to perform audits has been repeatedly cut.

As a state this type of rhetoric has moved us away from adequately funding education and roads and mental health and child welfare and veterans’ benefits and host of other agencies.

There is currently a dog that wanders up and down the road near my home, a couple of miles in each direction. He reminds me of Bozo from my childhood. Like the state’s leaders, they both seem to react based purely on raw emotion rather than the reality of the situation.

Economic Development and a Walk in the Park

Economic Development and a Walk in the Park - October 28, 2018

State Representative David Perryman

            President Teddy Roosevelt once said, “Here is your country. Cherish these natural wonders, cherish the natural resources, cherish the history and romance as a sacred heritage, for your children and your children’s children.”

            While Roosevelt is often assumed to have founded U.S. Park Service, Yellowstone, out first national park, was designated by President Ulysses S. Grant, in 1872, when Teddy Roosevelt was just fourteen years old and nearly 30 years before he would become President.

            Frequently, there are philosophical and rhetorical discussions about the wisdom (and expense) of the park system that documentary filmmaker Ken Burns called, “America’s Best Idea.” Oklahoma’s Park system has not been free from similar scrutiny.

            While this article focuses primarily on Red Rock Canyon State Park, near Hinton, Oklahoma, the same issues could apply to any of dozen and a half Oklahoma State Parks.

            Red Rock Canyon provided Cheyenne Indians with a sheltered wintering ground for decades and then in the 1840’s, it became a landmark and campsite on the old California Trail as gold seekers headed west for fame and fortune. The canyon’s rich history and unique qualities make it a special place for Oklahomans and visitors to our state.

            This weekend, a concerned constituent had heard that Red Rock Canyon State Park had been sold to a private entity. While I was not aware of a transfer of ownership, I knew that in early 2017 the director of the Department of Tourism and Recreation had recommended that Red Rock Canyon and 15 other state parks and a state owned golf course be closed and that publication of tourism’s magazine, “Oklahoma Today” be terminated.

            The director’s reason for the recommendation was because the targeted properties were not generating sufficient revenue to pay for their own operating costs. Tourism officials said earlier this year that in Fiscal Year 2017, Red Rock Canyon park revenues were about $140,000 and the annual costs to operate the park was just under $300,000.

            When the priority of the governor is to “run the state of Oklahoma like a business” decisions like closing parks are based solely on the economics of revenue, cash flow and costs of operation. Decisions of a corporation are supposed to be made purely in the best interest of its stockholders. Making money is the sole purpose of a corporation.

            One would hope that the future of a historical site or a recreational area would be based on more than the revenue that the site itself can generate. Perhaps the real culprit is the fact that between 2009 and 2018, the legislature cut Tourism’s budget by 38%, forcing parks to finance their own operations and crippling the state’s ability to properly fund tourism which is Oklahoma’s third largest industry.

Since the inquiry, my research has found that beginning on November 1, 2018, the City of Hinton and a private concessionaire will assume the responsibility of running the park which will henceforth be known as the “Red Rock Adventure Park.”

The move by the City of Hinton to operate the park rather than allow the state to close it was based largely on local economics with consideration given to its historical and cultural attributes. It is doubtful whether the City will be able to make it cash flow but closure as the state’s alternative was not acceptable.

Core function of government; or not? I would like to know your thoughts on this and other issues. Questions or comments, contact David Perryman at 405-557-7401 or David.Perryman@okhouse.gov.

Plans, Plans, Everywhere

Plans, Plans, Everywhere - February 18, 2018

State Representative David Perryman

In 2004, the top Oklahoma Individual Income Tax rate was 7%. Historically, the Gross Production Tax Rate for oil and gas severance was also 7%. At those levels, funding was sufficient for school districts to comply with the class size limitations of HB1017. Teachers were not rolling in dough, but were being paid a fair wage for a hard day’s work. Oklahoma children were being taught from up-to-date school books during a full five day school week.

What has occurred in the intervening dozen years has not been good for students of Oklahoma’s public schools… or persons needing hospital care or mental health treatment… or seniors served through nutrition programs… or the developmentally disabled… or thousands of other citizens of our state, young and old who depend upon critical state services in some form or fashion.

Those are the results of a dozen years of cuts to Oklahoma’s gross production tax rate and income tax rates and the annual $1.4 Billion decrease in state revenues. Not only are Oklahomans desperately feeling the impact of losing those revenues, many, like the state representative who authored income tax cuts and is now running for a statewide office, realize that those cuts were mistakes.

Virtually every citizen, every legislator, every lobbyist and every special interest group has an opinion about what course of action should be taken to right our budget.

While pure logic would tend to indicate that the quickest and best solution would be to undo the cuts that put us in these dire straits. However, the oil and gas industry has invested hundreds of thousands of dollars in the campaign donations to prevent advalorem taxes from being assessed against minerals and to achieve an overall effective mineral/severance oil and gas tax rate of 3.2%.

Those campaign contributions and lobbying efforts have paid off. For the fiscal year ended June 30, 2016, a study funded by the state of Idaho found that an apples to apples comparison showed that while Oklahoma’s effective oil and gas tax rate was 3.2%, Idaho’s was 4%; Utah’s was 6.1%; Texas’ was 8.3%; North Dakota’s was 9.4%; Montana’s was 9.9%; Alaska’s was 12%; Louisiana’s was 13.2%; and Wyoming’s was 13.4%.

Over the past several months, efforts have intensified to stabilize Oklahoma’s budget crisis. In addition to a plan to just reinstate the tax rates on oil and gas companies and high income earners, a number of other plans have been put forth to fill the budget hole and provide recurring revenue so that cuts would not have to be an annually recurring fact.

Unfortunately, when the Democratic president from Missouri, Harry S Truman, said, “It is amazing what you can accomplish when you do not care who gets the credit,” the transverse was true: “NOTHING will get done if all a person cares about is who gets the credit.”

One of the earliest plans was Restore Oklahoma, a Democratic Plan that compromised on a 5% GPT which together with other recurring revenue produced sufficient state revenue to plug the state’s $878 million budget hole, finance a significant teacher pay raise and balance the state’s budget.

A few months later, a bipartisan coalition of Oklahoma groups came together to present the Save Our State Plan with its Blueprint for a Better Budget. It also provided for recurring revenue through a GPT rate of 7% and allowed teachers and state employees to have a raise.

Now, State Auditor Gary Jones has proposed a plan to increase the GPT to 5%, provide a 75 cent cigarette tax and a 3 cent gasoline tax with a 6 cent diesel tax. Auditor Jones plan would also provide a raise to teachers and state employees.

In addition to that Republican plan, there is a plan that has been submitted by the Oklahoma Council of Public Affairs that I and some of the other Democrats might support with a few tweaks. Another Republican plan that 82.2% of the Democrats supported was HB1054 during the first special session. That bill contained enough revenue for a teacher pay raise and to date is the only plan that has garnered the required 75% or more support from a caucus.

The Speaker of the House controls which proposal is voted on and when that votes takes place. The sooner the better and I firmly believe that it will pass so long as it doesn’t shift the tax burden from oil companies and high income earners to working Oklahomans and those citizens who can least afford it.

Thank you for allowing me to serve as State Representative.  If you have questions or comments about this issue or any other matter, please contact me at David.Perryman@okhouse.gov or 405-557-7401.

Shutting Down the Government Oklahoma Style

Shutting Down the Government Oklahoma Style - January 21, 2018

State Representative David Perryman

                The past week has been a display of that seamy underside of government that repulses so many Americans. Political parties are more concerned about who gets the blame for shutting down the government rather than reaching consensus on what is best for our country. Four times in the past 25 years the federal government allowed itself to be shut down.

                The most recent edition of Washington gridlock has occurred because the federal government failed to pass a full appropriations bill prior to the beginning of the fiscal year and now is attempting to piecemeal the federal budget by a series of continuing resolutions. Since keeping the federal government open is theoretically a goal of both the Democrats and the Republicans, each have historically attempted to leverage their positions when a vote is needed.

                In this year’s version, the Republicans are in the majority in both the U.S. House and the U.S. Senate and of course control the White House. Politically, the minority party does not receive much consideration for their version of what is best for America and therefore when someone comes along and wants a legislator’s vote, conventional wisdom and good government would involve a process of bargaining to arrive at a solution that is palatable to all involved.

This past week it became clear that the majority is seeking the minority’s votes and the minority is attempting to initiate the process of negotiation to address the CHIP program and DACA. Without getting in the weeds, the CHIP program is the Childrens Health Insurance Program that provides states with matching funds for health insurance for kids whose families are too poor to afford health insurance coverage. DACA is the program that allows immigrants who were living in the U.S. in 2007, were brought to the Country by their families before their 16th birthday, have lived here continuously, have taken advantage of educational opportunities, have not been in trouble with the law, and re-apply every two years but are barred from applying for citizenship because of their status as a DACA recipient.

                The gridlock has arisen because one party wants the CHIP program and DACA to be voted on and the other party refuses to allow it to be voted on.  While those are federal issues and the federal government does not have a Constitutional provision requiring a balanced budget, Oklahoma is facing a remarkably similar version of gridlock.

Over the past ten years, Oklahoma has adopted budget after budget that contain cuts to agencies and underfunds core services.

Cutting the K-12 Education budget by reducing state aid by 26.9% since 2008 results in 4 day school weeks and the crippling of a school district’s ability to educate children. Cutting the state’s Higher Education budget by 17.8% between 2012 and 2017 results in the inability of the state to produce college graduates and those students who do graduate often do so with a mountain of college debt.

Oklahomans rank third in the nation (22.4%) for affliction of mental illness such as schizophrenia, major depression, bipolar or anxiety disorders. Budgetary cuts have left thousands of patients without services and medication.

 The cuts go on and on and involve health care, hospitals, roads and bridges and virtually every other aspect of state government.

The bottom line is, there is more than one way to shut down a government and Oklahoma shows day in and day out that it is very proficient in doing so on a routine basis.

Thanks for allowing me to serve. If you have any questions or comments, please call or write, 405-557-7401 or David.Perryman@okhouse.gov

Thoroughly Modern Mistake

Thoroughly Modern Mistake - February 7, 2016

State Representative David Perryman

Set in 1922, “Thoroughly Modern Millie,” features Julie Andrews as Millie Dilmount who hails from Salina, Kansas, and heads to New York City with the “thoroughly modern” idea of finding a wealthy husband. Neither love nor long term consequences “interfered” with Millie’s plan and singular goal of wealth and social status through matrimony.

Not unlike Millie, Oklahoma leaders have betrothed themselves to billionaire and multi-millionaire corporations, promising tax cuts, tax credits and tax rebates in return for campaign contributions, junkets and future corporate board positions and have sacrificed the health and education of our citizens, allowed our roads, bridges and other infrastructure to crumble and failed to protect the earning capacity of hard working Oklahomans.

The Revenue Failure that we are currently experiencing means that State Revenue is too low to meet the state’s obligations under the 2016 Budget. In addition to this budget year, we will likely be facing a $1 billion budget hole next year.

These budget problems did not occur overnight. According to a November 2014 article in Oklahoma Watch, Oklahoma has more than 400 Corporate Tax Credits, Subsidies and Direct Payments with the 24 largest paying out more than $750 Million per year and an August 2014 Tulsa World article mentioned that the New York Times had reported that Oklahoma was responsible for about $2 Billion in incentives that year. In two of the past three months, the Oklahoma Tax Commission has paid out more in corporate rebates and credits than it received in corporate income tax, making these subsidies unsustainable.

Last session I co-authored House Bill 2182, The Incentive Evaluation Act, which established a bipartisan commission to evaluating all state Tax Credits. I had hoped that the study would produce recommendations before this year’s session. However, Governor Fallin failed to make the required appointment to the Commission and Senate President Pro Tem Brian Bingman (R-Sapulpa) delayed in the appointment of a member until about two weeks ago. These delays mean that the subsidies will continue.

Another reason for our situation is that, according to the Oklahoma Policy Institute, state income tax cuts since 2005 have decreased annual state revenue by $1.022 Billion, but have only given median Oklahoma households an income tax cut of $19 per month. I joined several legislators in asking the Governor to delay the January 1, 2016 income tax cut, but instead, she left it in place and is looking at ways to increase sales tax revenue through the elimination of sales tax exemptions and taxing more types of sales.

Governor Fallin calls this “MODERNIZING the way sales tax is collected” and in her State of the State Address said that she hoped to increase sales tax revenue by $280 Million.

Oklahomans should watch this very carefully.

She wants the legislature to help her find $80 Million by eliminating sales tax exemptions. The current list of sales tax exemptions includes purchases by churches and non-profits, merchants, tuition, rural electric cooperatives, farmers, disabled veterans and cities, towns and schools as well as things purchased for resale.

She is looking for the other $200 Million to be increased revenue from sales taxes that will be imposed on things that are not currently taxed. A list of transactions that do not currently have sales taxes added are things like Veterinary Services, residential water, electricity, sewer and natural gas, insurance services, abstracts, bank service charges, haircuts and laundry services, tax preparation, advertising, carwashes, towing, professional services, surveying and labor charges.

It may be “thoroughly modern” to shift the tax burden from corporations to hardworking families by increasing sales tax revenue but it seems to be far from fair unless income tax cuts, credits and incentives are reviewed also.

Questions and comments are welcome. David.Perryman@okhouse.gov or 405-557-7401.

Stop Digging

Stop Digging for the Common Good - April 12, 2015

State Representative David Perryman

My Dad and his cousins learned at an early age not to get between their Grandpa Davis and his spittoon. Likewise, Will Rogers warned “Never slap a man who’s chewing tobacco.”

Unfortunately, slow learners abound. Will explained it this way: “Some people learn by reading, some by observing, but some simply have to pee on the electric fence to find out for themselves.”

Today, legislators emulate Will’s definition of a ‘slow learner’ by putting our state in a world of hurt. Tax cuts and credits have caused a budget shortfall in excess of $611 million.

Cash strapped agencies face additional budget cuts. Fewer dollars means roads, education, health care and public safety are no longer adequately funded. Teachers subsidize the public education system by accepting low wages and using personal funds in the classroom.

Earlier this session, as a “last resort, last choice” option, I proposed that teachers receive an income tax exemption to give the average teacher a few hundred dollars more per year since there was no talk of a pay increase. I had hoped that option might help keep teachers in the state.

Charter schools, private schools and others quickly sought similar tax exemptions. What began as a small incentive to public classroom teachers quickly had the potential to springboard into a justification to eliminate the entire state income tax code.

I remembered Will’s famous quote: “If you find yourself in a hole, stop digging.” We are in a hole created by millions of dollars in tax cuts and tax credits. We no longer have the ability to properly fund essential infrastructure and services needed by Oklahomans. Eliminating the state income tax would be a final blow.

Oklahoma tax policy is being driven by legislators who are annihilating the state’s revenue stream and pitting department against department in vicious competition for scarce dollars.

Teachers by nature are builders of opportunity and have the God given talent to open doors of knowledge.  They, by nature, are constructive and that is why they continue to perform at high levels even with substandard pay. That is also why Oklahoma should be ashamed of its treatment of teachers and Oklahoma’s educational system.

What we need is revenue. Not additional tax cuts. Oklahoma teachers need and deserve a pay raise now, but cutting taxes is not the correct path. Rep. Earl Sears, a Republican from Bartlesville, is truly one of the most honest and respected members of the state legislature.  He serves as the Chairman of Appropriations and Budgets and is doing his best to protect key services upon which Oklahomans depend. Unfortunately, tax cuts and tax credits make his task nearly impossible.

The legislature’s time and attention should be spent solving issues like making Oklahoma’s water available to all Oklahomans and addressing ways to facilitate the installation of truly high speed internet to all four corners of this great state. Instead, “slow learners” in our legislature diminish revenue, appeal to our base instincts of jealousy and greed and sidetrack the debate by maintaining that 49th in teacher pay is good enough.

I am convinced at this time that the best interest of Oklahoma will be served if we focus not on tax cuts, but on restoring Oklahoma’s ability to meet the needs of all Oklahomans. Step one is for all Oklahomans to engage as voters and elect legislators who are committed to doing the same so that every person and every business will pay their fair share of taxes and allow the debate to focus on matters like water and technology across Oklahoma.

Thank you for allowing me to serve as State Representative.  If you have questions or comments about this issue or any other matter, please contact me at David.Perryman@okhouse.gov or 800-522-8502.