FY-2013 Proposed State Budget

OCPA BUDGETA STATE BUDGET THAT RESPECTS YOUR FAMILY BUDGET

Submitted by the

Oklahoma Council of Public Affairs, Inc.

To the Taxpayers of the State of Oklahoma

and Their Elected Officials

PROPOSED STATE BUDGETFOR THE FISCAL YEAR ENDING JUNE 30, 2013

About OCPA

The Oklahoma Council of Public Affairs (OCPA) is an

independent, nonprofit public policy organization—

a think tank—which formulates and promotes public

policy research and analysis consistent with the

principles of free enterprise and limited government.

Guarantee of Quality Scholarship

OCPA is committed to delivering the highest quality and most reliable research on policy issues.

OCPA guarantees that all original factual data are true and correct and that information attributed to

other sources is accurately represented. OCPA encourages rigorous critique of its research. If the accu-

racy of any material fact or reference to an independent source is questioned and brought to OCPA’s

attention with supporting evidence, OCPA will respond in writing. If an error exists, it will be noted in an

errata sheet that will accompany all subsequent distribution of the publication, which constitutes the

complete and final remedy under this guarantee.

Table of Contents

Budget Message ................................................................................................................................................ 1

Government-Wide Reforms .............................................................................................................................. 5

Summary of FY-2013 OCPA Budget ................................................................................................................ 8

FY-2013 OCPA Budget Recommendations

Education ............................................................................................................................................ 10

General Government ......................................................................................................................... 19

Public Health ....................................................................................................................................... 25

Human Services ................................................................................................................................. 28

Natural Resources .............................................................................................................................. 31

Public Safety ....................................................................................................................................... 38

Judiciary .............................................................................................................................................. 41

P R O P O S E D S TA T E B U D G E T F Y- 2 0 1 3 1

Budget Message

Oklahoman had finally earned enough money to be

able to pay the federal, state and local tax collectors.

This tax burden is inappropriate for a free people.

Regardless of whether Oklahoma’s tax burden

ranks first or 50th in 50-state comparisons (and here’s

hoping we can one day get to 50th), the burden is too

heavy.

Accordingly, the OCPA budget provides for a sig-

nificant reform of the Oklahoma personal income tax

code by eliminating all loopholes, individual-income-

tax deductions, exemptions, and credits. This reform,

coupled with much needed spending reductions in

areas that are not core functions of government, al-

lows for a significant reduction in Oklahoma’s indi-

vidual income-tax rate from 5.25 percent to 2.25 per-

cent—another step toward eliminating the tax alto-

gether and replacing it with nothing. This will put

money back into the hands of Oklahoma’s private

sector, thus spurring economic activity and even pro-

viding some offsetting revenues for the state. But

make no mistake, the goal is not to be “revenue neu-

tral.” The OCPA budget provides what Oklahomans

This budget provides what Oklahomans want:

lower taxes and a more efficient, effective govern-

ment.

It returns government spending to pre-spending-

spree levels while providing much-needed tax relief

for Oklahoma families.

It allows private businesses and families the oppor-

tunity to use more of their hard-earned money accord-

ing to their priorities, not state government’s priorities.

In short, it’s a state budget that respects your family

budget.

Now you may have noticed that our friends on the

Left like to say Oklahoma is a “low-tax state.” To which

one must reply: By what standard? University of Okla-

homa historian J. Rufus Fears has pointed out that “the

American public pays an amount of taxes that no des-

potic pharaoh in antiquity would have ever dreamt of

imposing upon his people.”

The average Oklahoman was forced to work more

than three months last year before he was able to en-

joy the fruits of his own labor. “Tax Freedom Day” ar-

rived on April 2, 2011—that’s the day the average

Spending data are from the Oklahoma Office of State Finance, FY-2010 Comprehensive Annual Financial Report, pp. 152-153, and FY-

2011 Comprehensive Annual Financial Report, pp. 164-165, http://www.ok.gov/OSF/Comptroller/Financial_Reporting.html.

Parties in

Control

When

Spending

Approved

2 O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

want: a smaller government that is more efficient and

effective.

In light of the irresponsible spending spree of FY

1996 to FY 2002 (wherein state appropriations in-

creased more than $1.9 billion—or 49 percent) and

the irresponsible spending spree of fiscal year (FY)

2004 to FY 2010 (wherein state appropriations in-

creased more than $2.1 billion—or 41 percent), the

OCPA budget returns government spending to a level

more appropriate for a state with Oklahoma’s level of

capital, job creation, and population.

This is necessary. For despite legislative and execu-

tive branches filled with professed conservatives,

Oklahoma government spending is at an all-time high

(as the nearby chart indicates). According to the Of-

fice of State Finance, total state expenditures have in-

creased every year from FY 2001 ($9.6 billion) to FY

2011 ($16.64 billion). Policymakers at 23rd and Lincoln

do not have a revenue problem.

What they have is a spending problem, which is in

part a bureaucratic-overhead problem. According to

a 2012 publication of The State Chamber’s research

affiliate, Oklahoma’s government bureaucracy is

among the nation’s largest. Among the 50 states,

Oklahoma ranks 14th in the number of state and local

government employees as a percent of the population.

For all the talk of “maintaining core services,” what

policymakers are actually maintaining is bureau-

cratic bloat. And they’re doing so on the backs of the

hardworking taxpayers who elected them to do other-

wise. It’s clear that they have more than enough

money for their state budget. Now is the time to show

some concern for their constituents’ family budgets.

The 9 R’s of Fiscal Responsibility

What is the core mission of government? This, of

course, “is the debate at the heart of government bud-

geting,” says the John Locke Foundation (JLF), a free-

market think tank in North Carolina. “What should

government do? What does the constitution allow it to

do? What does it do well? What can it reasonably

hand off to other sectors of society?”

Government is like Microsoft before broadband,

handing down a proprietary operating system (law)

for everyone with little ability to fix bad lines of code. It

assumes that a few people running “government-

modified organizations (GMOs)” can make better de-

cisions than the natural, organic interaction of millions

of service users and providers. This setup results in,

among other things, a Medicaid program that pro-

vides less health care than promised, schools that

graduate half of African-American males, colleges

and universities that graduate less than a quarter of

their students in four years, and targeted tax incen-

tives that fail to create or keep jobs.

How did Oklahoma manage to pile up $16.6 billion

worth of government? “In good times, I do think that

it’s true that government is subject to ‘mission creep,’”

former state treasurer Scott Meacham once ob-

served. “When the revenue is flowing maybe there’s a

trend to drift into areas that are outside of the core

mission or missions of government. What happens

when things are going well is that things that are ‘nice

to do’ become new programs, but in hard times or

tight times, it’s time to look at maybe pruning the tree

of government.”

Oklahoma, with 3.75 million people and a Gross

Domestic Product of $148 billion, is too complex for

149 legislators and several thousand bureaucrats to

manage. Oklahoma has a vibrant private sector, and

it makes more sense, as JLF points out, to leave more

activities in the hands of “individuals and companies

who can be contractually bound to produce results,

instead of spelling out the methods to state employees

and allowing them to choose the results they will

achieve.”

Government exists to secure our rights to life, lib-

erty, and property. It does not exist to own and operate

a third-rate motel chain, to bribe poor women to leave

the fathers of their children, to give people food stamps

with which to buy cigarettes, or to provide employment

for termed-out state legislators. If policymakers focus

on providing core services, government can be

smaller and taxes can be lower.

In crafting a state budget, the analysts at JLF have

developed what they call the “9 R’s of Fiscal Responsi-

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3 3

bility” (reprinted below, adapted for Oklahoma).

Reform Entitlement Programs. State programs to

provide cash assistance, medical care, or other ser-

vices to the disadvantaged exist to provide a basic

“safety net.” Even philosophers of limited government

have justified such programs as needed to ensure or-

der and protect public assets and spaces. But these

programs must be carefully structured to minimize

dependency and encourage personal responsibility.

When the state pays nursing home bills for the parents

of the middle class, subsidizes the daycare expenses

of affluent families, and perpetuates social patholo-

gies such as out-of-wedlock births, it strays far from its

constitutional moorings. One of the biggest contribu-

tors to Oklahoma’s budgetary problems is rapid

growth in the state’s Medicaid program. The counter-

cyclical nature of this program leads to lawmakers

expanding Medicaid programs (such as the Advan-

tage Waiver program) to provide new entitlements

(and create new dependents) in good economic times

that cannot be sustained when downturns in the

economy occur. According to the state’s FY 2011 Com-

prehensive Annual Financial Report, total state

spending on social services has grown from $1.59 bil-

lion in FY 2005 to $2.25 billion in FY 2011—an increase

of 41.7 percent in six years. Total state spending on

health services has grown from $3.13 billion in FY 2005

to $4.85 billion in FY 2011—an increase of 54.3 percent

in six years.

Require More User Responsibility. It is inappropri-

ate to require those who receive core state services,

such as law enforcement or public education, to cover

a significant share of the cost of those services. But for

many other state agencies, their programs or services

are not constitutional entitlements or responsibilities.

If the state is to continue involvement in these

enterprises, it would be appropriate to ask those who

benefit to shoulder more of the responsibility of paying

for them. Services for which this budget recommends

additional user responsibility include state museums,

historic sites, parks, costs of regulation for particular

industries, and other non-core functions of government.

Redirect Spending to Higher-Priority Uses. Ac-

cording to Article II, Section 2 of the Constitution of

Oklahoma, “All persons have the inherent right to life,

liberty, the pursuit of happiness, and the enjoyment of

the gains of their own industry.” Thus, it is incumbent

upon Oklahoma politicians, when formulating tax and

budget policies, to secure the people’s right to enjoy

“the gains of their own industry.” The state is obligated

to perform its basic functions efficiently while leaving

to the people as much of their hard-earned money as

possible. During a time in which policymakers find it

difficult to fund obligations already in place, it makes

little sense to incur new ones. Another way to apply

this principle is to sort out which expenditures within a

given department or agency are central to the core

mission and which are not.

Reorganize State Government. Even assuming

that current fiscal obligations could continue into the

next year, there remain different ways of organizing

the departments that carry them out. There is unnec-

essary duplication of core functions throughout Okla-

homa state agencies. In short, there are more efficient

methods of organizing the various departments. For

example, the Oklahoma Scenic Rivers Commission

provides mainly tourism and recreation-related activi-

ties by its offering of trails or canoe rides in the Illinois

River, yet is a stand-alone agency from the Oklahoma

Tourism Department. Following on the heels of the

2011 consolidation of administrative agencies in the

Office of State Finance, policymakers should continue

to reorganize state government.

Revive Free Enterprise. Responding to Oklahoma’s

economic challenges, some policymakers have con-

cluded that state government should take a more ac-

tive role in attracting investment and guiding develop-

ment through additional tax credits, cash subsidies,

and other incentive programs. This is a mistake. The

available public policy research on state economic

development does suggest that overall tax rates,


especially the marginal rates on individual and corpo-

rate income, do have a measurable impact on state

economic growth rates. By eliminating individual-in-

come-tax programs, marketing subsidies, and other

encroachments on free enterprise, we can reduce

marginal income tax rates. These tax changes will im-

prove economic competitiveness across the board. By

eliminating all individual-income-tax exemptions, de-

ductions, credits, and loopholes—and lowering the

individual-income-tax rate to 2.25 percent—this bud-

get puts more than $275 million (for FY 2013) back in

the hands of taxpaying Oklahomans to invest and

spend as they choose.

Restore Civil Society. Nonprofits and charities form

a “third” or “independent” sector that delivers impor-

tant services and benefits that neither governments

nor profit-seeking businesses can deliver as effec-

tively. The state should be careful not to supplant

these institutions of civil society.

Remove Advocacy, Waste, and Race-Based Pro-

grams. Laws and programs that invoke racial or eth-

nic discrimination violate a basic principle of moral

government. All such programs should be ended im-

mediately. Similarly, state funds should not be used to

subsidize groups that advocate policies or ideas be-

fore government bodies. Taxpayers should not be

forced to pay for the propagation of ideas with which

they may disagree. For example, state law requires

the state to administer and process payroll deduc-

tions for purposes unrelated to employment benefits.

This must end. Government is instituted solely for the

good of the whole, not for special interest groups that

use taxpayer money to advance their agendas.

Reshape the State-Local Government Relation-

ship. Local control of local revenues should be a cen-

tral theme whenever possible in the relationship be-

tween state and local government. The diverse demo-

graphic nature of our state leads to problems in appli-

cations of some state programs.

Reduce Biases in the Tax Code. Like most states,

Oklahoma has developed its state personal income

tax code in a piecemeal fashion rather than using tax

reform principles to build a coherent and efficient sys-

tem. This budget provides the spending discipline that

will allow for reductions in individual taxes for every-

one, thus reducing the need for these individually tai-

lored tax breaks.


Government-Wide Reforms

Telecommunications Efficiency Audits. Policymak-

ers should require audits of state telecommunications

and data communications utilization. Independent IT

efficiency firms, for a flat fee or on a contingency ba-

sis, can be employed as a negotiator and reviewer of

charges from telecommunications and data commu-

nications companies used by state agencies. Highly

successful Oklahoma companies have used these

firms and seen significant savings. Some private-sec-

tor companies have reduced from 25 to 50 percent the

amount spent annually on telecommunications and

data communications.

Savings FY 2013 and thereafter: $3 million (annually)

Mandatory Performance Evaluations and Hiring

Reform. Policymakers should require all state agen-

cies to implement and use rigorous semi-annual per-

formance evaluations for employees. These evalua-

tions would include private-sector-like evaluations of

employee computer and Internet time management,

benchmarks and requirements for employee output to

hours worked, performance and incentive pay for

work that leads to the reduction of full-time equivalent

employees (FTEs), and so on. Agencies would then be

able to make retention decisions based on the results

of these initiatives. Some agencies have started these

evaluations and discovered startling information

about the low workload and low output of some of their

employees. In some agencies, more than 6 percent of

the FTEs were grossly underperforming their required

duties, and contributed little to the completion of tasks

at the agency. These evaluations have allowed agen-

cies to reward and reassign duties to performing em-

ployees, and separate non-performing employees,

thus saving hundreds of thousands of dollars in em-

ployee expenses.

As noted in the preceding budget message, the

state has too many employees; therefore, it is time to

reduce FTE authorizations. Many decisions were

made during the 2011 legislative session to adjust to

reduced appropriations. As with most organizations,

State Employee Health Insurance Reform.

Policymakers should implement the reforms of SB

2052, which was passed by the legislature in 2010 but

vetoed by former Governor Brad Henry. The reforms

include consolidation of duplicative administrative

functions of the state Employee Benefits Council (EBC)

and the Oklahoma State and Education Employees

Group Insurance Board (OSEEGIB), which is esti-

mated to result in an administrative savings of $2 mil-

lion to $3 million annually. Non-appropriated revenue

of OSEEGIB and EBC is derived from state appropria-

tions for health-benefit payments for employees, so

any spending reductions at EBC and OSEEGIB equals

savings for state-appropriated agencies. Other fea-

tures of the reform include implementation of a “win-

ner take all” competitive bidding process for HMO

benefits that are offered by the state to employees

(this is how most private-sector firms choose health

insurance products). This reform, coupled with the

stabilization of the benefit allowance for state employ-

ees, would result in savings of more than $70 million

annually.

In addition, the state should reform the OSEEGIB

HealthChoice plan so that the insurance offering for

state employees is a Health Savings Account plan.

With the current generous benefit allowance (which

pays well over the costs of health benefits) and imple-

mentation of health insurance incentive reforms, all

state employees can be converted to Health Savings

Accounts without a reduction in the quality of health

benefits available to state employees. As a final part

of this reform, the state needs to evaluate the cost of

continuing to operate its own self-insured plan

(HealthChoice), compared to available private health

insurance options. If significant long-term savings can

be achieved without impacting core health care options

for employees, the state should consider this option.

Savings FY 2013: $37.8 million (half a fiscal year)

Savings FY 2014 and thereafter: $75.6 million

(annually)


when cuts are necessary, this will result in reduced

FTEs. Every agency that has experienced FTE reduc-

tions to accommodate available revenue should have

its agency FTE authorization reduced to its current

FTE level, the new lower level as a result of this past

session’s spending reduction, or reductions in the up-

coming 2012 session, whichever is lower. Further, to

add much-needed accountability to the hiring pro-

cess, all state-appropriated agencies should be re-

quired to notify the Office of State Finance, Division of

Personnel Management, and the Governor’s office

before any new hires are made. Once the agency has

provided a detailed notification and justification for

filling the position, the Governor’s office or the Divi-

sion of Personnel Management will have 30 days to

approve or disapprove the new hire. This will prevent

future growth in personnel expenses without careful

consideration and approval of the Legislature and the

Governor.

Savings FY 2013: $5.4 million (half a fiscal year)

Savings FY 2014: $23.4 million


Continued Pension Reform. Policymakers enacted

significant pension reforms in 2011, but the work is

not done. During the 2012 session, the legislature

should implement a defined-contribution (DC) plan

(effective July 1, 2012) for all new state (OPERS-eli-

gible) employees.

Adhering to the first rule of holes (“when you’re in

one, stop digging”), this plan stops the practice of

adding new liabilities for new employees. The plan

would pay 4 percent of annual salary immediately, in-

creasing to 7 percent of annual salary after 4 years of

service. (The state would contribute 4 percent of sal-

ary to the employee’s 401(k) beginning when the em-

ployee is hired.)

The plan would take the difference between the

new DC plan contribution and the old DB (defined-

benefit) plan contribution and inject it into the system,

using it to pay down the debt over time.

Savings: Long-term elimination of state pension

liabilities and future obligations

Major Asset Sales. The state owns many assets that

are not related to core functions of government or are

not being utilized. These assets can be sold. The state

should privatize or sell assets such as the Grand River

Dam Authority, the state’s interest in goodwill and sur-

plus value in CompSource, and multiple other assets.

These one-time funds should be used to phase out the

state’s income tax.

Savings FY 2014: $50 million to $200 million

(mutualize or privatize CompSource)

Savings FY 2014: $25 million (asset sales)

Savings FY 2015: $25 million (asset sales)

Savings FY 2014: $300 million (privatize GRDA)

Agency, Board, and Commission Reform. Whether

it is the Oklahoma Health Care Authority board’s indif-

ference to a high director’s salary and ballooning

Medicaid costs, or past Department of Human Ser-

vices (DHS) commissioners’ indifference and destruc-

tive performance, it is time to hold board members ac-

countable. This can be done by making all gubernato-

rial appointments at the will of the governor. Despite

Oklahoma voters’ mandate for right-sizing govern-

ment, “old guard” board appointments in some cases

will outlast a governor, even a governor elected to two

terms. This explains in part why higher-education re-

gents allow tuition increases of more than 100 percent

in just nine fiscal years, why other boards approve the

hiring of lobbyists with taxpayer funds, and why still

other boards grant completely undeserved salary in-

creases. Making gubernatorial appointments coin-

cide with the term of the governor provides for ac-

countability, because the governor will be watching

(knowing that the citizens generally hold the governor

accountable).

In the longer term (as OCPA first recommended

early in the Brad Henry administration), we must em-

power the governor even further by eliminating many

of these boards and commissions altogether.

Oversight of Federal Funding. As mentioned

above, Oklahoma government spending is at an all-

time high. The most significant driver of state spending


growth is federal funds, or what tax consumers like to

think of as “free” money. It is the federally induced

welfare programs, such as Medicaid, that require

ever-increasing state funding matches for the pro-

grams’ exploding costs. Again, according to

Oklahoma’s latest Comprehensive Annual Financial

Report (CAFR), total state spending on social services

has grown from $1.59 billion in FY 2005 to $2.25 billion

in FY 2011—an increase of 41.7 percent in six years.

Total state spending on health services has grown

from $3.13 billion in FY 2005 to $4.85 billion in FY

2011—an increase of 54.3 percent in six years.

Based on this enormous growth, lawmakers must

take a serious look at state programs operated with

federal funds. In particular, oversight of state agencies’

application for federal funds, and operation of pro-

grams using federal funds, must begin immediately.

The current budget review process is inadequate.

There are simply too many programs being operated

by state agencies, and too much money being spent.

Just as lawmakers have established committees specifi-

cally for certain policy issues needing intense review

(e.g., DHS), it is time to form an oversight committee de-

signed specifically to review and make recommenda-

tions for all state programs utilizing federal funds.

The current unchecked growth in state government

spending is irresponsible. It is time for policymakers

to take fiscal federalism seriously, and chart a new

course towards economic freedom.

Privatization of State Services. Many of the ser-

vices currently provided by state agencies—the Tour-

ism Department, the Department of Corrections, the

Office of Juvenile Affairs, and the Department of Hu-

man Services come quickly to mind—can be per-

formed at the same or better quality and at lower cost

by the private sector. It is unjust to require taxpayers to

support overpriced services—especially when many

of these taxpayers are small-business owners being

forced to subsidize their own competitors.

In the 2012 session, lawmakers should establish a

joint committee, comprising both public and

nonpublic sector appointees, specifically tasked with

evaluating current services provided by government

that are also provided by the private sector. This com-

mittee should create a comprehensive list of services

that can be privatized, and then lawmakers should be

required to take formal action accepting or denying

the list of services to be privatized prior to the end of

the 2012 session.

Savings FY 2013: $47 million

Savings FY 2014: $52 million



OCPA FY-2013 Budget RecommendationFY-12 Appropriation FY-13 Appropriation $ Change % Change

EDUCATION COMMITTEEArts Council $ 4,010,087 $ 0 $ -4,010,087 -100.00%Career and Technology Education $ 133,742,618 $ 130,320,973 $ -3,421,645 -2.56%Board of Education $ 2,278,158,382 $ 2,277,776,621 $ -381,761 -0.02%Educational Television Authority $ 3,822,328 $ 0 $ -3,822,328 -100.00%Regents for Higher Education $ 945,260,277 $ 729,260,277 $ -216,000,000 -22.85%Land Commission $ 7,109,000 $ 7,046,799 $ -62,201 -0.87%Department of Libraries $ 5,898,633 $ 5,880,208 $ -18,425 -0.31%Physician Manpower Training Commission $ 4,379,254 $ 0 $ -4,379,254 -100.00%Board of Private Vocational Schools $ 167,194 $ 165,548 $ -1,646 -0.98%School of Science and Mathematics $ 6,332,274 $ 5,141,343 $ -1,190,931 -18.81%Center for Science and Technology $ 17,811,449 $ 14,791,483 $ -3,019,966 -16.96%Teacher Preparation Commission $ 1,526,179 $ 0 $ -1,526,179 -100.00%

GENERAL GOVERNMENT AND TRANSPORTATION COMMITTEEAuditor and Inspector $ 4,706,986 $ 4,579,403 $ -127,583 -2.71%Bond Advisor $ 143,112 $ 140,918 $ -2,194 -1.53%Department of Central Services $ 17,313,301 $ 17,022,559 $ -290,742 -1.68%Election Board $ 7,805,808 $ 7,781,893 $ -23,915 -0.31%Emergency Management $ 651,179 $ 623,863 $ -27,316 -4.19%Ethics Commission $ 523,129 $ 517,315 $ -5,814 -1.11%Office of State Finance $ 19,179,440 $ 18,985,488 $ -193,952 -1.01%Governor $ 1,980,594 $ 1,952,401 $ -28,193 -1.42%House of Representatives $ 14,574,682 $ 14,308,875 $ -265,807 -1.82%Legislative Service Bureau $ 4,892,835 $ 4,883,401 $ -9,434 -0.19%Lieutenant Governor $ 506,591 $ 497,705 $ -8,886 -1.75%Merit Protection Commission $ 490,967 $ 484,166 $ -6,801 -1.39%Military Department $ 10,247,997 $ 9,870,843 $ -377,154 -3.68%Office of Personnel Management $ 3,639,606 $ 3,595,503 $ -44,103 -1.21%Secretary of State $ 0 $ 0 $ 0 N/ASenate $ 11,171,789 $ 11,010,528 $ -161,261 -1.44%Space Industry Development Authority $ 394,589 $ 0 $ -394,589 -100.00%Tax Commission $ 46,915,944 $ 46,089,562 $ -826,382 -1.76%Department of Transportation $ 106,737,039 $ 205,795,533 $ 99,058,494 92.81%Treasurer $ 3,629,873 $ 3,567,343 $ -62,530 -1.72%

PUBLIC HEALTH COMMITTEEHealth Care Authority $ 983,085,563 $ 895,601,670 $ -87,483,893 -8.90%Health Department $ 60,083,682 $ 57,795,857 $ -2,287,825 -3.81%J.D. McCarty Center $ 3,740,338 $ 3,480,565 $ -259,773 -6.95%Mental Health and Substance Abuse $ 187,151,517 $ 185,187,311 $ -1,964,206 -1.05%University Hospitals $ 38,446,391 $ 38,437,615 $ -8,776 -0.02%Department of Veterans Affairs $ 34,698,752 $ 32,276,652 $ -2,422,100 -6.98%

HUMAN SERVICES COMMITTEECommission on Children and Youth $ 2,027,167 $ 2,018,017 $ -9,150 -0.45%Office of Disability Concerns $ 317,607 $ 310,806 $ -6,801 -2.14%Human Rights Commission $ 531,270 $ 517,886 $ -13,384 -2.52%Department of Human Services $ 537,136,664 $ 503,419,142 $ -33,717,522 -6.28%Indian Affairs Commission $ 192,306 $ 190,112 $ -2,194 -1.14%Office of Juvenile Affairs $ 96,187,205 $ 90,339,372 $ -5,847,833 -6.08%Department of Rehabilitation Services $ 30,149,232 $ 29,050,681 $ -1,098,551 -3.64%

NATURAL RESOURCES COMMITTEEDepartment of Agriculture, Food and Forestry $ 25,610,247 $ 25,019,362 $ -590,885 -2.31%Department of Commerce $ 29,073,210 $ 25,064,675 $ -4,008,535 -13.79%Conservation Commission $ 9,561,684 $ 8,615,247 $ -946,437 -9.90%Consumer Credit Commission $ 331,730 $ 0 $ -331,730 -100.00%Corporation Commission $ 11,324,427 $ 10,854,904 $ -469,523 -4.15%


FY-12 Appropriation FY-13 Appropriation $ Change % Change

NATURAL RESOURCES COMMITTEE (CONT.)Department of Environmental Quality $ 7,557,973 $ 6,858,845 $ -699,128 -9.25%Historical Society $ 12,502,546 $ 12,336,238 $ -166,308 -1.33%Horse Racing Commission $ 2,072,167 $ 0 $ -2,072,167 -100.00%Insurance Department $ 1,871,937 $ 0 $ -1,871,937 -100.00%J.M. Davis Memorial Commission $ 306,009 $ 0 $ -306,009 -100.00%Department of Labor $ 3,081,160 $ 2,985,391 $ -95,769 -3.11%Department of Mines $ 779,139 $ 743,815 $ -35,324 -4.53%Scenic Rivers Commission $ 271,315 $ 255,518 $ -15,797 -5.82%Department of Tourism and Recreation $ 21,803,003 $ 19,572,246 $ -2,230,757 -10.23%Water Resources Board $ 5,499,671 $ 5,407,851 $ -91,820 -1.67%Will Rogers Memorial Commission $ 740,486 $ 0 $ -740,486 -100.00%

PUBLIC SAFETY COMMITTEEABLE Commission $ 3,140,334 $ 3,095,137 $ -45,197 -1.44%Department of Corrections $ 459,831,068 $ 421,249,454 $ -38,581,614 -8.39%Fire Marshal $ 1,796,764 $ 1,768,680 $ -28,084 -1.56%State Bureau of Investigation $ 13,848,059 $ 13,488,019 $ -360,040 -2.60%Law Enforcement Education and Training $ 3,682,560 $ 3,635,717 $ -46,843 -1.27%Board of Medicolegal Investigations $ 4,698,281 $ 4,618,418 $ -79,863 -1.70%Narcotics and Dangerous Drugs $ 3,616,418 $ 3,489,055 $ -127,363 -3.52%Department of Public Safety $ 84,894,790 $ 70,326,271 $ -14,568,519 -17.16%

JUDICIARY COMMITTEEAttorney General $ 13,228,141 $ 13,064,028 $ -164,113 -1.24%Court of Criminal Appeals $ 3,334,631 $ 3,304,024 $ -30,607 -0.92%District Attorneys Council $ 32,887,258 $ 31,655,968 $ -1,231,290 -3.74%District Courts $ 56,100,000 $ 55,413,817 $ -686,183 -1.22%Indigent Defense System $ 14,699,353 $ 14,575,390 $ -123,963 -0.84%Council on Judicial Complaints $ 75,000 $ 72,806 $ -2,194 -2.93%Pardon and Parole Board $ 2,217,454 $ 2,177,084 $ -40,370 -1.82%Supreme Court $ 17,300,000 $ 17,106,157 $ -193,843 -1.12%Worker’s Compensation Court $ 4,197,166 $ 4,118,620 $ -78,546 -1.87%

MISCELLANEOUS AGENCIES/APPROPRIATIONSRural Economic Action Plan (REAP) $ 11,532,469 $ 0 $ -11,532,469 -100.00%OSU Medical Center $ 5,000,000 $ 5,000,000 $ 0 0.00%

Government-wide reforms (not included in individual agency adjustments)

Telecommunications efficiency audits $ -3,000,000 $ -3,000,000 N/AHiring reform $ -5,400,000 $ -5,400,000 N/A

Total Appropriations Including Misc. Approp $ 6,505,937,280* $ 6,138,188,975 $ -367,748,305 -5.65%

Appropriation savings (FY-2012 appropriations less OCPA recommendations) $ 367,748,305FY-13 growth in appropriation authority over FY-12 appropriations $ 73,814,873Cash Flow Reserve Fund transer to Special Cash $ 116,000,000

Total surplus funds $ 557,563,178

Estimated FY-2013 revenue decline from income tax cut (excluding ROADS fund) $ -243,000,000

Offsets for estimated FY-2013 revenue decline from income taxcut to ROADS fund (transfer to ROADS fund) $ -32,000,000

Total income tax cut impact $ -275,000,000

Surplus funds to carry forward for FY-2014 $ 282,563,178

*Agency appropriations were derived from OSF, House, and Senate fiscal documents. This total excludes non-recurring supplemental funding.

EducationArts Council

This budget recommends that the Arts Council op-

erate solely from donations and self-generated funds,

without receiving state appropriations. Promotion of

the arts is a nonprofit interest, which should not be

advantaged over other nonprofit efforts that do not re-

ceive state appropriations. State government has

core functions which are neglected when limited re-

sources are diverted to philanthropic interests such

1 0 O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3

as promotion of the arts. Removing state funding for

the Arts Council would not be a unique reform at-

tempted only by Oklahoma. Kansas eliminated such

funding in 2011, providing a great example for all

states of wisely using taxpayer funds.

Require more user responsibility

Redirect spending to higher-priority uses

Restore civil society

Career and Technology EducationA major source of revenue for school districts and

technology centers is the ad valorem tax, or property

tax, which is allowed by Article 10 of the Oklahoma

Constitution. The level of support technology centers

receive from property-tax sources varies based upon

what was approved for the technology centers

through a vote of the people in the district. Support

from property tax is capped at five mills for the gen-

eral fund (a mill = 1/10th cent), five mills for the incen-

tive fund for operations, and five mills for the building

fund, although not all technology center districts have

voted the full millage levy.

The use of building funds is generally limited to

“erecting, remodeling or repairing buildings and for

purchasing furniture.” Partially because of this provi-

sion, and because of economic growth in several ar-

eas of the state, total CareerTech building fund carry-

forward balances have increased from $36.8 million in

FY 2001 to $106.1 million in FY 2011. This enormous

fund growth—161 percent adjusted for inflation—has

resulted in technology centers across the state being

forced to make building purchases or improvements

that they do not need, while other potentially worth-

while expenses are neglected. This is like a family be-

ing forced to use a savings account to buy a new

home, when dad just lost his job and the family needs

to buy groceries.

CareerTech does not need increased state appro-

priations. What is needed is a constitutional amend-

ment and statutory changes allowing technology cen-

ters to use the existing local-district voting process to

reallocate the total millage for technology centers as

their local citizens and their elected officials see fit.

This allows for local control and removes the need for

more state funding. Then CareerTech can adjust its

state allocations to local technology centers, saving

millions of dollars in state appropriations and allow-

ing for wiser use of local property taxes.

This budget recommends that CareerTech receive

the same appropriation provided for FY 2012, less sav-

Arts Council

FY-2012 $ 4,010,087

Not a core function of government; eliminate appropriation $ (4,010,087)

$ -

Total Savings $ 4,010,087

FY-2013 $ -

O C P A P R O P O S E D S T A T E B U D G E T F Y- 2 0 1 3 1 1

ings from the implementation of the state employee

health insurance reform, less appropriations to

CareerTechs in large MSA’s that have sufficient local

revenue to support their operations, and less targeted

funding.

Board of EducationOver the long term, lawmakers in Oklahoma must

address the ever-growing cost of common education,

which has been accompanied by results that remain

flat at unacceptably low levels. According to the

state’s FY 2011 Comprehensive Annual Financial Re-

port, total state spending on education has grown

from $3.53 billion in FY 2005 to $4.57 billion in FY

2011—an increase of 29.4 percent in six years. Ac-

cording to Dr. Greg Foster, federal data indicate that

“only half of Oklahoma’s public education employees

are teachers. The bureaucracy is now so big, it takes

up half the system.”

According to a new report from the research affili-

ate of The State Chamber, Oklahoma public schools

spend $9,121 per pupil. This per-pupil expenditure

significantly exceeds the cost associated for alterna-

tives to public education.

Cost-saving alternatives (such as vouchers and

Education Savings Accounts, for example) need seri-

ous attention from lawmakers.

This budget recommends that the Board of Educa-

tion receive the same appropriation provided for FY

2012, less savings from the implementation of the state

employee health insurance reform.

Career and Technology Education

FY-2012 $ 133,742,618

Savings from state employee health insurance reform $ (321,645)

Reduce state subsidy for technology centers with sufficent local revenues

to support operations without state funding (Metro, Francis Tuttle, Tulsa) $ (3,000,000)

Eliminate targeted funding for Kiamichi Technology Center $ (100,000)

$ -


FY-2013 $ 130,320,973

Board of Education

FY-2012 $ 2,278,158,382


$ -

Total Savings $ 381,761

FY-2013 $ 2,277,776,621


Oklahoma Educational Television Authority

“Public broadcasting is a wonderful resource, pro-

viding quality programming that is cherished by

many,” Virginia Gov. Bob McDonnell has correctly

noted. Nevertheless, he recommended eliminating

state funding for public broadcasting. “In our modern

media world,” he said, “there are thousands upon

thousands of content providers operating in the free

market. They compete with each other, and viewers

and listeners have their choice as to what to tune into

or turn on. Simply put, it doesn’t make sense to have

some stations with the competitive advantage of being

funded by taxpayer dollars. The decision to eliminate

state funding of public broadcasting is driven by the

fundamental need to reestablish the proper role of

government, and budget accordingly.”

Similarly, in Florida last year Gov. Rick Scott vetoed

the state’s $4.8 million appropriation for public

broadcasting.

Broadcasting is not a core function of government.

According to the Oklahoma Educational Television Au-

thority (OETA), as of FY 2012, 17 states are not provid-

ing state funding for public broadcasting. Consistent

with the principles of free enterprise and limited gov-

ernment, this budget removes all state appropriations

from OETA and recommends that all OETA assets, in-

cluding any bandwidth rights, be assigned to the non-

profit OETA Foundation, giving OETA a firm footing to

continue operations without any taxpayer funding.

Oklahomans who wish to support OETA may send a

donation to the OETA Foundation, P.O. Box 14190,

Oklahoma City, Oklahoma 73113.




Regents for Higher EducationJeff Sandefer, a successful entrepreneur and former

University of Oklahoma professor, recently wrote:

The truth is that over the next decade, many uni-

versities may bankrupt themselves by clinging to

an educational approach that confuses lecturing

with learning and protects highly paid, tenured

faculties and administrators from a tsunami of tech-

nological change that soon will deliver transforma-

tional learning at a fraction of today’s costs.

There’s a word for business models that have high

and increasing fixed costs, and are faced by dis-

ruptive strategies that offer better results at a

lower price. That word is “doomed.” ...

The real problems in higher education are

more fundamental than tuition increases alone:

1. A public that increasingly questions the value

of a college degree. …

2. High and rising fixed costs from tenured fac-

ulty, bloated administrative staffs, and expensive

new buildings at a time when tenured-faculty

teaching productivity is falling ...

3. A tsunami of technologically enabled educa-

tional change promises to deliver transforma-

tional learning at a fraction of today’s costs.

These problems exist in Oklahoma. Since the Leg-

islature granted the State Regents authority to ap-

Educational Television Authority

FY-2012 $ 3,822,328

Not a core function of government;

eliminate appropriation $ (3,822,328)

$ -


FY-2013 $ -


prove tuition and fee increases in 2003, undergradu-

ate resident tuition and fees have increased by 100.59

percent during the last nine fiscal years, according to

the State Regents. During the same time period, infla-

tion has only increased by approximately 25 percent,

while private earnings rose only about 45 percent.

During that time, when comparing each year of

Higher Ed appropriations to FY 2004, even after ad-

justing for inflation and including budget cuts, the Leg-

islature has maintained total appropriations to higher

education and in several years substantially ex-

ceeded that level.

Tuition at the University of Oklahoma and Okla-

homa State University during that time period is even

more alarming:

Oklahoma State University (including the Tulsa

campus) – Undergraduate Resident Tuition and Man-

datory Fee Increases:

• FY 2003 – $100.83 main campus tuition and fees per

credit hour


credit hour

• 134.95% – main campus tuition and fee increases

over last 9 years

• 25% – inflation over last 9 years

• $2,069.40 – increase per 15-hour semester

University of Oklahoma – Undergraduate Resident

Tuition and Mandatory Fee Increases:


credit hour


credit hour

• 144.17% – main campus tuition and fee increases

over last 9 years

• 25% – inflation over last 9 years

• $2,103.30 – increase per 15-hour semester

Analyzing the State Regents data, tuition increases

are not just based on enrollment growth. In the fall of

2003 the full-time equivalent enrollment was 96,856

and by 2009 had grown by 2,05,9 or 2.13 percent.

Meanwhile, over the same period, average under-

graduate resident tuition and mandatory fee in-

creases grew 69.51 percent for research universities

and 52.19 percent for regional universities. Inflation

over this period of time was 17 percent and the private

earnings of Oklahomans grew 35.03 percent over this

same period.

In 2010, Oklahoma ranked 13th in per capita higher

education appropriations but ranked 37th in bachelor’s

degree attainment. For Oklahoma public four-year in-

stitutions, only 19.97 percent of students graduate

within 4 years, and 55 percent of Oklahoma’s students

fail to graduate within even six years.

In an investigative review last year of Oklahoma

college and university budgets, Peter J. Rudy of Okla-

homa Watchdog reported:

Spending at state colleges and universities this

year is 66% higher than it was just 10 years ago

according to data obtained by Oklahoma Watch-

dog through Open Records requests. The Educa-

tion and General (E&G) budgets of the 25 state

colleges and universities grew from $1.29 billion in

FY2003 to $2.13 billion in the current fiscal year. …

[W]hile Oklahoma suffered two economic down-

turns during that period, spending never de-

creased at state colleges and universities.

The last three years, Oklahoma has experi-

enced a revenue failure and two budget shortfalls,

yet Higher Ed spending increased by 2.5%, 2.8%

and 3.9% in those years. The 3.9% increase this year

comes despite state lawmakers decreasing state

appropriations to Higher Ed by 5% in the budget.

Colleges and universities have other sources of

revenue, primarily tuition and fees, which allowed

spending to rise. Every state college and univer-

sity raised tuition and fees this year.

According to the State Regents, total student

(headcount) enrollment at public colleges and univer-

sities was 228,249 for 2002-03 (FY 2003). Allocating the

FY 2003 budget to enrollment for 2002-03 equals an

E&G budget of $6,028.83. The headcount for 2011-12

(assuming the average of growth the last 3 years) is

262,413. Allocating the FY 2012 budget to enrollment

for 2011-12 equals an E&G budget of $8,116.97. Ana-

lyzing these data, public colleges and universities in

Oklahoma have increased the E&G budget per


student by $2,088.14 or approximately $547.9 million in

nine years.

Low productivity among professors is also a problem

in Oklahoma. For example, in a 2002 study conducted of

a non-medical and non-engineering division of an Okla-

homa research institution (see nearby table), it was

found that multiple professors were paid salaries ex-

ceeding $100,000 a year, taught in some cases as little

as one class per year, and taught few students compared

to non-tenured professors and graduate assistants.

Concerning the number of colleges and universities

in Oklahoma (25) and the total number of “higher edu-

cation” centers (52), it is time for the administrative and

“back office” functions of the colleges and universities to

be consolidated into the two research universities.

These larger institutions have achieved economies of

scale, and their far superior graduation rates are just

one example of why it is time to end the political patron-

age approach to the number of colleges and universi-

ties in Oklahoma and their control. It is also time for the

State Board of Regents and lawmakers, in coordination

with the two research institutions, to consolidate many of

the regional and community colleges to vertically

achieve efficiency, cost savings, better degree quality,

and better graduation rates. One need only to look at

the salaries of the college and university presidents, and

the corresponding graduation rates, to see these re-

forms are needed.

It is time for Oklahoma to decrease its taxpayer invest-

ment in higher education. This budget recommends that

the State Regents for Higher Education receive the

same appropriation for FY 2012 less savings from the

implementation of the reforms described below.

Regents for Higher Education

FY-2012 $ 945,260,277

Eliminate inflated appropriation levels due to SQ744 styled Peer Factor

Multiplier; eliminate waste, duplication, and inefficiencies by combining all

other college and university administrative and “back office” functions into

research institutions; and implement college and university consolidation $ (216,000,000)

$ -


FY-2013 $ 729,260,277

Total Total # of SalaryTeachers Classes Students 2002Name redacted 2 70 $188,423.16Name redacted 2 89 158,522.80Name redacted 3 122 135,477.99Name redacted 3 62 136,426.04Name redacted 3 133 192,520.48Name redacted 1 34 126,757.00Name redacted 2 63 170,401.29Name redacted 2 76 150,000.00Name redacted 3 113 115,086.00Name redacted 1 11 223,850.60Name redacted 4 21 184,893.09Name redacted 3 67 146,482.74Name redacted 3 115 156,929.11Name redacted 2 70 129,883.74Name redacted 1 35 104,435.83Name redacted 3 59 110,634.79Name redacted 1 10 243,160.23

College DazeFour-Year Four-Year Salary ofPublic Graduation UniversityUniversity Rate President

Rogers State University 4% $215,000Cameron University 6% $261,100Langston University 13% $247,000Southeastern Oklahoma State University 11% $172,000University of Science and Arts of Oklahoma 19% $165,465Northeastern State University 11% $215,360Southwestern Oklahoma State University 12% $157,667Northwestern Oklahoma State University 15% $160,000East Central University 11% $172,500University of Central Oklahoma 12% $266,492Oklahoma Panhandle State University 23% $192,250Oklahoma State University 31% $371,786University of Oklahoma 29% $384,816

Sources: Graduation rates are the latest available from IPEDS, U.S. Department ofEducation. This is a percentage of entering students who began their studies full-time in the fall of 2003 seeking a bachelor’s degree who earned a bachelor’sdegree within four years. Salary date for FY-2010 (the latest year available) arefrom the Oklahoma Office of State Finance.


Land CommissionThis budget recommends that the Land Commis-

sion receive the same appropriation provided for

FY 2012, less savings from the implementation of the

state employee health insurance reform.

Department of LibrariesThis budget recommends that the Department of Li-

braries receive the same appropriation provided for



Physician Manpower Training Commission

This budget recommends that the Physician Man-

power Training Commission (PMTC) operate com-

pletely from self-generated funds, local government

funds, and donations, without receiving state appro-

priations. The Physician Manpower Training Commis-

sion, according to its website, exists “to enhance

medical care in rural and underserved areas of the

state by administering residency, internship and

scholarship incentive programs that encourage medi-

cal and nursing personnel to practice in rural and

underserved areas. Further, PMTC is to upgrade the

availability of health care services by increasing the

number of practicing physicians, nurses and physician

assistants in rural and underserved areas of Okla-

homa.” These efforts are intensely local functions fo-

cused on local workforce training and recruitment.

These efforts should be directly funded and supported

by the local governments and users that benefit, not

through the statewide subsidization of one specific in-

dustry. Further, significant tax relief for Oklahomans,

with the associated economic growth and the in-

crease in local revenues, provides a better opportu-

nity for local communities to become self-sufficient

and operate local workforce recruitment programs.


Land Commission

FY-2012 $ 7,109,000


$ -


FY-2013 $ 7,046,799

Department of Libraries

FY-2012 $ 5,898,633


$ -


FY-2013 $ 5,880,208

Physician Manpower Training Commission

FY-2012 $ 4,379,254

Function of local government and local workforce recruitment;

eliminate appropriation $ (4,379,254)

$ -


FY-2013 $ -


Board of Private Vocational Schools

The Board of Private Vocational Schools licenses,

regulates, and sets standards for the operation of pri-

vate schools that conduct occupational training.

Schools licensed by the Oklahoma Board of Private

Vocational Schools are the “silent service” of educa-

tion. They are generally privately owned, and are

mostly small institutions with a student body counted

in the tens or hundreds rather than in the thousands.

Their physical plants are modest in size and appear-

ance, and they have no lobbyists roaming the halls of

the capitol seeking appropriations.

Unlike privately owned entities licensed by other

state boards (banks and funeral homes, for example),

licensed private career schools perform a service nor-

mally performed by the state. In providing educational

services, private career schools save the state mil-

lions of dollars in educational costs, reduce welfare

expenses, offer choice in education, and produce job-

ready graduates. The benefits inuring to Oklahoma

through the private career schools regulated by the

Oklahoma Board of Private Vocational Schools are

enormous.

This budget recommends the Board of Private Vo-

cational Schools receive that the same appropriation

provided for FY 2012, less savings from the implemen-

tation of the state employee health insurance reform.

School of Science and Mathematics

This budget recommends that the Oklahoma

School of Science and Mathematics (OSSM) promote

individual responsibility by requiring that students

who attend OSSM help defray some of the costs of

their education.

Through local property taxes, state sales taxes,

state income taxes, motor vehicle taxes, and other

taxes and fees, Oklahoma taxpayers heavily subsi-

dize common education by way of the 1017 fund, the

general revenue fund, and more than $2 billion annually

in appropriations to the state Board of Education. OSSM

is a predominantly taxpayer-subsidized advanced

college preparatory school, with a restricted number

of students. This budget recommends that OSSM in-

stitute a tuition-sharing program for each student of

$250 a month, for 9 months. Even with this arrange-

ment, students will only pay approximately 20 percent

of the cost of their attendance at OSSM. This budget

recommends that OSSM receive the same appropria-

tion provided for FY 2012, less the new revenue gener-

ated by the tuition sharing arrangement and savings

from the implementation of the state employee health

insurance reform.


Board of Private Vocational Schools

FY-2012 $ 167,194


$ -


FY-2013 $ 165,548

School of Science and Mathematics

FY-2012 $ 6,332,274

Implement tuition sharing program $ (1,125,000)


$ -


FY-2013 $ 5,141,343


Center for Science and Technology

This budget recommends that the Oklahoma Cen-

ter for Science and Technology (OCAST) no longer re-

ceive state funding for the Oklahoma Technology

Commercialization Center (OTCC). This program di-

rectly competes with the private sector and existing

market participants engaged in business formation

and development. This program is another example

of the state picking winners and losers. If the private

sector is interested in subsidizing a competitor

through the continued existence of this program, then

it will support this program through donations to

OCAST specifically for this program. This budget rec-

ommends that OCAST receive the same appropria-

tion provided for FY 2012, less funding for the OTCC

and less savings from the implementation of the state


Teacher Preparation Commission

This budget recommends that the Oklahoma Com-

mission for Teacher Preparation (OCTP) no longer re-

ceive a state appropriation. According to its website,

the OCTP’s mission is “to develop, implement, and fa-

cilitate competency-based teacher preparation, candi-

date assessment, and professional development sys-

tems.” Since its creation, taxpayers have provided ap-

propriations of more than $29 million to the OCTP, in-

cluding the $1,526,179 appropriated to the agency for

FY 2012.

Despite poor results, total state spending on educa-

tion has grown from $3.53 billion in FY 2005 to $4.57

billion in FY 2011—an increase of 29.4 percent in six

years. Excluding funds for OCTP, taxpayers already

spend billions of dollars on other state agencies, such

as the state Department of Education, CareerTech,

state aid for common education, OETA, and more than

a billion of taxpayer dollars for subsidized colleges and

universities. These government entities should already

“implement and facilitate competency-based teacher

preparation, candidate assessment, and professional

development systems”—particularly the institutions

granting bachelor’s degrees and higher. Oklahoma

taxpayers should not be required to pay for this twice.

Teachers are professionals. Once they enter the

workforce, they, like many other professionals, are

now providing a service to their particular employer

and their local community. Locally benefiting employ-

ers, communities, and teachers should bear the costs

for any licensing, credentialing, and additional train-

ing or development—just as is the case with many

other professions that do not receive taxpayer funds.

The Teacher Preparation Commission is a duplica-

tive function of government, as teachers are gradu-

ates of heavily taxpayer-subsidized public colleges

and universities and private universities which receive

taxpayer subsidized grants and federally subsidized

student loans. Since most teachers are required to

have bachelor or higher level degrees, their degree

program has or should have already prepared them.

Center for Science and Technology

FY-2012 $ 17,811,449


Eliminate state funding of the technology commercialization program, this

business development program competes directly with the private sector $ (3,000,000)

$ -


FY-2013 $ 14,791,483


Any additional preparation needed is a specific ben-

efit to local government and districts and should be

funded locally if a priority.

Reshape the state-local government relationship

Teacher Preparation Commission

FY-2012 $ 1,526,179

Duplicative function of government and function of local government $ (1,526,179)

$ -


FY-2013 $ -


General Government

Auditor and InspectorThis budget recommends that the Auditor and In-

spector receive the same appropriation provided for



Bond AdvisorThis budget recommends that the Bond Advisor re-

ceive the same appropriation provided for FY 2012,

less savings from the implementation of the state em-

ployee health insurance reform.

Department of Central Services - OSF

This budget recommends that the Department of

Central Services of the Office of State Finance (OSF)

cease subsidizing the use of alternative fuels with

state appropriations. If market forces have not resulted

in alternative fuels equaling the cost of traditional fuels,

then government should not be subsidizing those fuels.

This budget recommends that the Department of Cen-

tral Services (DCS) receive the same appropriation

provided for FY 2012, less the alternative fuels subsidiza-

tion and savings from the implementation of the state



Auditor and Inspector

FY-2012 $ 4,706,986


$ -


FY-2013 $ 4,579,403

Bond Advisor

FY-2012 $ 143,112


$ -


FY-2013 $ 140,918

Department of Central Services

FY-2012 $ 17,313,301


Eliminate alternative fuels funding through DCS $ (49,508)

$ -


FY-2013 $ 17,022,559


Election BoardThis budget recommends that the Election Board

receive the same appropriation provided for FY 2012,



Emergency ManagementThis budget recommends that Emergency Manage-

ment receive the same appropriation provided for



Ethics CommissionThis budget recommends that the Ethics Commission




Office of State FinanceThis budget recommends that the Office of State Fi-

nance receive the same appropriation provided for



Election Board

FY-2012 $ 7,805,808


$ -


FY-2013 $ 7,781,893

Emergency Management

FY-2012 $ 651,179


$ -


FY-2013 $ 623,863

Ethics Commission

FY-2012 $ 523,129


$ -


FY-2013 $ 517,315

Office of State Finance

FY-2012 $ 19,179,440


$ -


FY-2013 $ 18,985,488


GovernorThis budget recommends that the Governor receive

the same appropriation provided for FY 2012, less

savings from the implementation of the state em-


House of RepresentativesThis budget recommends that the House of Repre-

sentatives receive the same appropriation provided

for FY 2012, less savings from the implementation of

the state employee health insurance reform. To better

facilitate lawmakers’ continuing education on policy

development and their need to participate in lawmaker-

led organizations, this budget also recommends that the

House of Representatives, the Senate, and the Legis-

lative Service Bureau allocate all funds given to mem-

bership organizations on a scholarship basis to each

lawmaker. This will allow lawmakers to seek innova-

tive policy solutions from organizations they deem

most beneficial.

Legislative Service BureauThis budget recommends that the Legislative Ser-

vice Bureau receive the same appropriation provided


the state employee health insurance reform. To better

facilitate lawmakers’ continuing education on policy

development and their need to participate in lawmaker-

led organizations, this budget also recommends that the

House of Representatives, the Senate, and the Legis-

lative Service Bureau allocate all funds given to mem-

bership organizations on a scholarship basis to each

lawmaker. This will allow lawmakers to seek innova-

tive policy solutions from organizations they deem

most beneficial.

Governor

FY-2012 $ 1,980,594


$ -


FY-2013 $ 1,952,401

House of Representatives

FY-2012 $ 14,574,682


$ -


FY-2013 $ 14,308,875

Legislative Service Bureau

FY-2012 $ 4,892,835


$ -


FY-2013 $ 4,883,401


Lieutenant GovernorThis budget recommends that the Lieutenant Gov-

ernor receive the same appropriation provided for



Merit Protection CommissionThis budget recommends that the Merit Protection

Commission receive the same appropriation provided


the state employee health insurance reform.

Military DepartmentThis budget recommends that the Military Depart-

ment receive the same appropriation provided for



Office of Personnel Management - OSFThis budget recommends that the Office of Person-

nel Management receive the same appropriation



Lieutenant Governor

FY-2012 $ 506,591


$ -


FY-2013 $ 497,705

Merit Protection Commission

FY-2012 $ 490,967


$ -


FY-2013 $ 484,166

Military Department

FY-2012 $ 10,247,997


$ -


FY-2013 $ 9,870,843

Office of Personnel Management

FY-2012 $ 3,639,606


$ -


FY-2013 $ 3,595,503


Secretary of StateThis budget recommends that the Secretary of

State continue to operate solely from fees associated

with its various regulatory duties and receive no ap-

propriation, as provided for FY 2012.

SenateThis budget recommends that the Senate receive



health insurance reform. To better facilitate lawmak-

ers’ continuing education on policy development and

their need to participate in lawmaker-led organiza-

tions, this budget also recommends that the House of

Representatives, the Senate, and the Legislative Ser-

vice Bureau allocate all funds given to membership

organizations on a scholarship basis to each lawmaker.

This will allow lawmakers to seek innovative policy solu-

tions from organizations they deem most beneficial.

Space Industry Development Authority

This budget recommends that the Space Industry

Development Authority (SIDA) no longer receive a

state appropriation. When created in 1999, SIDA was

intended to operate entirely on self-generated rev-

enues, according to the SIDA website. Despite this in-

tent, lawmakers have given $7.8 million in taxpayer

appropriations to the SIDA since its inception, includ-

ing the $394,589 given to the agency for FY 2012. State-

subsidized space travel is not a core function of state

government. Also, the infrastructure of the SIDA is

now used for more than just attempts at space travel,

and some reports indicate that if SIDA were freed

from state control it could generate enough income to

operate on its own.



Senate

FY-2012 $ 11,171,789


$ -


FY-2013 $ 11,010,528

Space Industry Development Authority

FY-2012 $ 394,589

Reduce appropriation, function of private industry and local government $ (394,589)

$ -


FY-2013 $ -

Secretary of State

FY-2012 $ -

$ -

$ -

Total Savings $ -

FY-2013 $ -


Tax CommissionThis budget recommends that the Tax Commission




Department of TransportationThis budget recommends that the Department of

Transportation receive the same appropriation pro-

vided for FY 2012, plus replacement of funds diverted

for bond issues, less savings from the implementation

of the state employee health insurance reform.

TreasurerThis budget recommends that the Treasurer re-




Tax Commission

FY-2012 $ 46,915,944


$ -


FY-2013 $ 46,089,562

Department of Transportation

FY-2012 $ 106,737,039

Restoration of diverted funds for bonds $ 101,695,609

Savings from state employee health insurance reform $ (2,637,115)

$ -

Total Increase $ 99,058,494

FY-2013 $ 205,795,533

Treasurer

FY-2012 $ 3,629,873


$ -


FY-2013 $ 3,567,343


Public Health

real leadership and real solutions. The governor, ex-

ecutive branch leaders, state legislators, and

Oklahoma’s congressional delegation should lead an

unrelenting effort to obtain waivers from the federal

government that would allow Oklahoma to implement

significant reforms to the Medicaid program. Prefer-

ably, the state should seek federal approval to convert

Medicaid into a block grant program, which would

give the state more control over how program dollars

are spent.

Block grants hold the potential of restraining Medic-

aid growth because the state would know how much

federal aid it will be receiving from year to year, as

opposed to the current “as needed” funding scheme

that incentivizes expansion by the promise of unlim-

ited federal funds. A block grant program could be

paired with a premium-support program, whereby the

state provides low-income and disabled individuals a

risk-adjusted credit or voucher to purchase coverage

from among competing private plans. Under this

model, an individual would own the plan and could

opt to continue paying for the coverage out of pocket if

he were to lose eligibility.

Until a block grant and premium assistance pro-

gram can be implemented, state leaders should take

advantage of all currently available options to find ef-

ficiencies in the existing program, including:

• Member Cost-Sharing: It is altogether reasonable

to ask welfare recipients to contribute in a small

way to the free medical care they receive at tax-

payer expense. With more than 800,000 Oklaho-

mans receiving Medicaid benefits each year, a low

monthly premium of $10 each month would return

more than $80 million to the program annually. An-

other option is to charge low premiums on a sliding

scale, where members with higher incomes would

be charged a slightly higher premium than low-in-

come members. This concept is not novel; indeed,

it is the basis for the current Insure Oklahoma pro-

gram. Both of those options would require a federal

Health Care AuthorityAccording to the state’s FY 2011 Comprehensive

Annual Financial Report, total state spending on

health services has grown from $3.13 billion in FY 2005

to $4.85 billion in FY 2011—an increase of 54.3 percent

in six years.

According to the Oklahoma Health Care Authority’s

FY 2010 annual report:

• In FY 2005 there were nearly 630,000 Medicaid en-

rollees and total (state and federal) Medicaid ex-

penditures of $2.81 billion. By FY 2010, the number

of Medicaid enrollees had ballooned to 881,220

(about 24 percent of the state’s population) and ex-

penditures had skyrocketed to $4.33 billion—an in-

crease of 54 percent in just five years.

• In Federal Fiscal Year 2000, total (state and federal)

Medicaid spending in Oklahoma was $1.64 billion.

But by Federal Fiscal Year 2010, total Medicaid

spending in Oklahoma was $4.35 billion—a 165

percent increase in just 10 years.

• For Federal Fiscal Year 2000, total state share/ap-

propriations for Medicaid were $435.9 million. In

Federal Fiscal Year 2010, total state share/appro-

priations for Medicaid were $1.1 billion—a 169 per-

cent increase in just 10 years.

• In 2010, approximately 562,000 children under the

age of 21 were covered by Medicaid.

• Approximately 67 percent of all Oklahoma children

under the age of five have been covered by Medic-

aid at some point in their lives.

• Of Oklahoma’s 77 counties, 38 counties have 25

percent or more of the population enrolled in Med-

icaid. Eighteen counties have 30 percent or more of

the population enrolled in Medicaid. One county

has 43 percent of its population on Medicaid.

The problem is not that there is too little money for

Medicaid; the problem is there are too many people

on Medicaid—and those enrollees are driving pro-

gram expenditures beyond sustainable limits.

Oklahoma voters decided to install a center-right

government last year because they are looking for


waiver; however, the Deficit Reduction Act of 2005

(DRA) does give states flexibility to make reforms to

their Medicaid programs, including allowing states

to charge premiums and require cost-sharing (co-

pays and deductibles) to certain enrollees. This

can include weighting cost-sharing based on those

engaged in unhealthy behaviors such as smoking

or obesity, to incentivize better health for Medicaid

participants. Legislators should ensure the state is

requiring member cost-sharing to maximum allow-

able limits.

• Long-Term-Care Reform

• Examining and Reducing “Optional” Benefits

• Insure Oklahoma: Legislators should allow the ap-

proximately 13,000 current individual Insure Okla-

homa members to obtain coverage through the pri-

vate market rather than being forced onto Medic-

aid.

• Employer-Sponsored Insurance for Part-Time

Workers: Legislators should incentivize employer-

sponsored insurance for employees (and their de-

pendents) who work at least 24 hours each week,

which current state law defines as “full time”

employment, instead of inducements to enter the

state Medicaid program.

• Medicaid Reform Task Force: Legislators should

create a task force to begin studying Medicaid and

options for reducing costs. While it would be pru-

dent for members to explore the possibility of opt-

ing out of Medicaid completely and allow the state

to focus revenues on providing health coverage ex-

clusively to the truly needy, most policymakers ad-

mittedly would view this option as impractical be-

cause it involves the loss of significant federal

matching funds. Nevertheless, the above propos-

als should be part of any task force that convenes

to explore real reform efforts.

This budget recommends that the Health Care Au-

thority receive the same appropriation provided for FY

2012, less savings from implementation of a member-

cost sharing plan, less savings from the implementa-

tion of the state employee health insurance reform.

Reform entitlement programs




Health DepartmentThis budget recommends that the Health Depart-

ment receive the same appropriation provided for FY



Health Care Authority

FY-2012 $ 983,085,563

Member cost-sharing $ (87,000,000)


$ -


FY-2013 $ 895,601,670

Health Department

FY-2012 $ 60,083,682


$ -


FY-2013 $ 57,795,857


J.D. McCarty CenterThis budget recommends that the J.D. McCarty

Center receive the same appropriation provided for



Mental Health and Substance AbuseThis budget recommends that the Department of

Mental Health and Substance Abuse receive the

same appropriation provided for FY 2012, less savings


insurance reform.

University HospitalsThis budget recommends that the University Hospi-

tals receive the same appropriation provided for FY



Department of Veterans AffairsThis budget recommends that the Department of

Veterans Affairs receive the same appropriation



J.D. McCarty Center

FY-2012 $ 3,740,338


$ -


FY-2013 $ 3,480,565

Mental Health and Substance Abuse

FY-2012 $ 187,151,517


$ -


FY-2013 $ 185,187,311

University Hospitals

FY-2012 $ 38,446,391


$ -


FY-2013 $ 38,437,615

Department of Veterans Affairs

FY-2012 $ 34,698,752


$ -


FY-2013 $ 32,276,652


Human Services

Commission on Children and YouthThis budget recommends that the Commission on

Children and Youth receive the same appropriation



Office of Disability ConcernsThis budget recommends that the Office of Disabil-

ity Concerns receive the same appropriation provided



Human Rights CommissionThis budget recommends that the Human Rights




Department of Human ServicesAccording to the state’s FY 2011 Comprehensive

Annual Financial Report, total state spending on so-

cial services has grown from $1.59 billion in FY 2005 to

$2.25 billion in FY 2011—an increase of 41.7 percent in

six years. The growth in welfare spending at both the

state and federal level is no surprise: you get more of

what you incentivize, and less of what you don’t. When

the state pays nursing home or in-home service bills

for the parents of the middle class, subsidizes the

daycare expenses of affluent families, and perpetu-

ates social pathologies such as out-of-wedlock births,

social-services costs will inevitably rise.

Rather than perpetuating policies which amount to

a “handout” rather than a “hand up,” several fiscal re-

Commission on Children and Youth

FY-2012 $ 2,027,167


$ -


FY-2013 $ 2,018,017

Office of Disability Concerns

FY-2012 $ 317,607


$ -


FY-2013 $ 310,806

Human Rights Commission

FY-2012 $ 531,270


$ -


FY-2013 $ 517,886


forms in the Department of Human Services must be

implemented (apart from the broader DHS reforms

that have been making headlines of late). For ex-

ample, if Oklahomans are going to apply for govern-

ment services for themselves or on behalf of others, it

is only reasonable that applicants meet basic require-

ments that are appropriate for applying for a job, such

as passing a drug test for certain services. Also, as a

way of encouraging more user participation in state

services, DHS should implement the increased co-

payments for child care subsidies which were pro-

posed in 2011.

In addition, DHS—like the Department of Correc-

tions, the Tourism Department, the Office of Juvenile

Affairs, and many other state-operated services—can

utilize the private sector to reduce the cost of

providing state services. If DHS would fully utilize pri-

vate-sector options for community-based care, the

state could save approximately $8 million a year

(based on FY 2010 data).


Human Services receive the same appropriation pro-

vided for FY-2012, less the preceding policy reforms,

less state funds for the construction division, less un-

accounted savings found by the DHS in 2011, less sav-


health insurance reform.

Reform entitlement programs




Indian Affairs CommissionThis budget recommends that the Indian Affairs



the state employee health insurance reform and con-

tinue being funded and operated through the Office of

the Governor.

Department of Human Services

FY-2012 $ 537,136,664

Privatize community service facilities $ (8,000,000)

Require drug testing for benefit qualification $ (2,000,000)


Closure of Construction Division $ (5,000,000)

Encourage personal responsibility by increasing co-payments for child

care subsidy as recommended by DHS staff in mid 2011 $ (7,000,000)

Efficiencies resulting in surplus of accounted funds found by DHS in

October 2011 $ (3,500,000)

$ -


FY-2013 $ 503,419,142

Indian Affairs Commission

FY-2012 $ 192,306


$ -


FY-2013 $ 190,112


Office of Juvenile AffairsThe Office of Juvenile Affairs (OJA) provides housing

and incarceration services for youthful offenders,

which the private sector has demonstrated it can pro-

vide at a lower cost to the state. Historically, political and

bureaucratic hurdles have prevented the increased use

of the private sector in this area. During the 2012 session,

lawmakers should increase the number of offenders

placed under the jurisdiction of the OJA who are

placed in private facilities, in order to achieve annual

savings of at least $5 million. This budget recom-

mends that the OJA receive the same appropriation

provided for FY 2012, less savings for increasing the

use of private beds, less savings from the implementa-


Department of Rehabilitation Services


Rehabilitation Services receive the same appropriation



Office of Juvenile Affairs

FY-2012 $ 96,187,205


Increase usage of private beds $ (5,000,000)

$ -


FY-2013 $ 90,339,372

Department of Rehabilitation Services

FY-2012 $ 30,149,232


$ -


FY-2013 $ 29,050,681


Department of CommerceThis budget recommends that the Department of

Commerce receive the same appropriation provided

for FY 2012, less a duplicative welfare program, less

local earmarks, less funding for the Naive American

Natural ResourcesDepartment of Agriculture, Food and Forestry



Department of Agriculture, Food and Forestry

FY-2012 $ 25,610,247


Tulsa State Fair - remove funds for intensely local function $ (65,000)

National Finals Steer Roping Champioship – remove funds for

intensely local function $ (25,000)

IPRA National Finals Rodeo - remove funds for intensely local function $ (25,000)


FY-2013 $ 25,019,362

Cultural and Educational Authority (NACEA) (which

was intended to operate on private funds), and less

savings from the implementation of the state em-


Department of Commerce

FY-2012 $ 29,073,210


Duplicative nutrition program, food stamp welfare services already

provided through the Department of Human Services $ (2,500,000)

IPRA National Finals Rodeo - remove funds for intensely local function $ (25,000)

Make NACEA non-appropriated, require private operational

support as originally intended $ (1,325,236)

$ -


FY-2013 $ 25,064,675


Agriculture, Food and Forestry receive the same ap-

propriation provided for FY 2012, less local earmarks


Consumer Credit CommissionThis budget recommends that the Consumer Credit

Commission (CCC) no longer receive a state appro-

priation. According to its website, “the Consumer

Credit Commission is responsible for the regulation of

consumer credit sales and consumer loans in the

State of Oklahoma. The Department is also respon-

sible for the licensing and regulation of mortgage bro-

kers, mortgage loan originators, pawnshops, de-

ferred deposit lenders, rental purchase lessors,

health spa contracts, credit service organizations and

precious metal and gem dealers.” These products are

used by some and not used by others, but are not a

core function of government, which should be sup-

ported by general taxes on all Oklahomans. The CCC

can be operated entirely from fee revenue of those

producing, selling, or utilizing these products.


Consumer Credit Commission

FY-2012 $ 331,730

Function of government to be funded by users $ (331,730)

$ -


FY-2013 $ -

Corporation CommissionThis budget recommends that the Corporation




Corporation Commission

FY-2012 $ 11,324,427


$ -


FY-2013 $ 10,854,904

Conservation CommissionThis budget recommends that the Conservation


for FY 2012, less the amount spent on the 10 duplicative

conservation district offices that exceed the more than

adequate 77 counties and the 77 associated conser-

vation districts, and less savings from the implementa-


Conservation Commission

FY-2012 $ 9,561,684

Reduce funding for duplicative conservation district offices –

10 districts w/out NRCS Office $ (868,000)


$ -


FY-2013 $ 8,615,247


Department of Environmental Quality


Environmental Quality receive the same appropriation



Historical SocietyThis budget recommends that the Historical Society



ployee health insurance reform. In keeping with the “9

R’s of fiscal responsibility” mentioned in the budget

Department of Environmental Quality

FY-2012 $ 7,557,973


$ -


FY-2013 $ 6,858,845

message, this budget recommends that the Historical

Society implement a plan to generate more funding

from users and private donations, so that beginning in

FY 2014 state appropriations to the Historical Society

can be reduced by 10 percent.

Horse Racing CommissionThis budget recommends that the Horse Racing

Commission no longer receive a state appropriation.

According to its website, “the Horse Racing Commis-

sion encourages agriculture, the breeding of horses,

the growth, sustenance and development of live racing,

and generates public revenue through the forceful con-

trol, regulation, implementation and enforcement of

Commission-licensed horse racing and gaming.”

Horse racing is an entertainment-related or specific

industry endeavor (as are the Lottery Commission,

Wheat Commission, Peanut Commission, Liquefied

Petroleum Gas Research, Marketing and Safety

Board, Construction Industries Board, and many oth-

ers that are non-appropriated and entirely user-sup-

ported). Horse racing is not a core function of govern-

ment, and should not be supported by general taxes

on all Oklahomans. The Horse Racing Commission

should be operated entirely from fee revenue from

participants.


Historical Society

FY-2012 $ 12,502,546


$ -


FY-2013 $ 12,336,238

Horse Racing Commission

FY-2012 $ 2,072,167

Non-core function, fund by users $ (2,072,167)

$ -


FY-2013 $ -

Insurance DepartmentThis budget recommends that the Insurance De-

partment no longer receive a state appropriation. Ac-

cording to its website, “the Insurance Department is

responsible for enforcing the insurance-related laws

of the state. We protect consumers by providing accu-

rate, timely and informative insurance information.

We promote a competitive marketplace and ensure

solvency of the entities we regulate. We also license

and educate insurance producers and adjusters, fu-

neral home directors, bail bondsmen and real estate

appraisers.” These products are used by many and

not used by others, but are not a core function of gov-

ernment and should not be supported by general

taxes on all Oklahomans. The Insurance Department

can be operated completely from fee revenue of those

producing, selling, or utilizing these products. The

proof of this is the Legislature’s constant raiding of the

Insurance Department’s revolving funds (for $8 million

in the last two fiscal years alone). Clearly there are

adequate fees available to operate the Insurance De-

partment without legislative appropriations.



J.M. Davis Memorial CommissionThis budget recommends that the J.M. Davis Memo-

rial Commission no longer receive a state appropria-

tion. According to its website, the J.M. Davis Memorial

Commission/Museum has, among other things, the

largest private gun collection in the world. Clearly it is

an important local entity, visited by some and not vis-

ited by others. But it is not a core function of govern-

ment, and should not be supported by general taxes

on all Oklahomans.


Insurance Department

FY-2012 $ 1,871,937

Function of government to be funded by users $ (1,871,937)

$ -


FY-2013 $ -

J.M. Davis Memorial Commission

FY-2012 $ 306,009

Local attraction, non-core function, should be completely user supported $ (306,009)

$ -


FY-2013 $ -


Department of LaborThis budget recommends that the Department of

Labor receive the same appropriation provided for



Department of MinesThis budget recommends that the Department of

Mines receive the same appropriation provided for

Department of Labor

FY-2012 $ 3,081,160


$ -


FY-2013 $ 2,985,391



Scenic Rivers CommissionThis budget recommends that the Scenic Rivers




Department of Mines

FY-2012 $ 779,139


$ -


FY-2013 $ 743,815

Scenic Rivers Commission

FY-2012 $ 271,315


$ -


FY-2013 $ 255,518


Department of Tourism and Recreation

local funding for advertising and other operational ef-

forts for multi-county organizations and some local

chambers is not a core function of government.

In future years, the OTRD needs to work to duplicate

the success of the US Forestry Service and use the

private sector (leasing operation of state parks) to op-

erate parks or resorts at no loss to the state, or fit state

parks so that users can adequately support parks and

resorts through fees. Those utilizing parks should pay

sufficient user fees to support their usage. Park and re-

sort self-sufficiency should begin to allow for further re-

ductions in taxpayer support beginning in FY 2014.


Tourism and Recreation receive the same appropria-

tion provided for FY 2012, less funds for losses on golf

courses, less earmarks for intensely local activities,






The Oklahoma Tourism and Recreation Depart-

ment (OTRD) is an example of an agency working

hard to use taxpayer dollars wisely. Whether it has

been the wise release of state parks with intensely lo-

cal functions, or leveraging OTRD products such as

Oklahoma Today magazine to minimize use of tax-

payer funds, the OTRD has been a recent leader for

other state agencies.

Further reform is needed. Policymakers should

eliminate any state subsidies or appropriations for

golf courses. According to the Governors’ budget

books and reports from the OTRD, from FY 2001 to FY

2011 lawmakers have appropriated $7.95 million for

losses on state golf courses. For FY 2011, appropria-

tions for losses were more than $300,000. Operating

golf courses is not a core function of government. If it

is a worthwhile park amenity, user fees will support

the costs to operate these courses.

Earmarks for intensely local festivals or exhibits,

and promotion of the arts, are not a core function of

government and should be removed. Also, intensely

Department of Tourism and Recreation

FY-2012 $ 21,803,003

Eliminate state subsidies for losses on state golf courses $ (400,000)

Eliminate non-core intensely local funding for multi-county organizations $ (921,506)

Eliminate non-core intensely local funding for Red Earth Festival $ (25,000)

Eliminate non-core intensely local funding for Summer Arts Institute $ (25,000)

Eliminate non-core intensely local funding for Jenks Aquarium Exhibits $ (40,000)


$ -


FY-2013 $ 19,572,246


Water Resources BoardThis budget recommends that the Water Resources

Board receive the same appropriation provided for



Will Rogers Memorial CommissionThis budget recommends that the Will Rogers Me-

morial Commission no longer receive a state appro-

priation. According to its website, the Will Rogers Me-

morial Museums exists “to collect, preserve, and

share the life, wisdom, and humor of Will Rogers for all

generations. … The Will Rogers Memorial Museums

are the premier destinations to introduce, showcase,

and celebrate the life, legacy, and spirit of Will

Water Resources Board

FY-2012 $ 5,499,671


$ -


FY-2013 $ 5,407,851

Rogers.” Clearly the Will Rogers Memorial Commis-

sion is an important local entity, visited by some and

not visited by others. But it is not a core function of gov-

ernment, and should not be supported by general

taxes on all Oklahomans.




Will Rogers Memorial Commission

FY-2012 $ 740,486

Local attraction, non-core function, should be completely user supported $ (740,486)

$ -


FY-2013 $ -


Public Safety

ABLE CommissionThis budget recommends that the Alcoholic Bever-

age Laws Enforcement (ABLE) Commission receive



health insurance reform.

Department of CorrectionsLawmakers trying to be “right on crime” are mak-

ing the right moves regarding corrections reform. Ef-

forts should continue to reduce incarceration rates

and strengthen families. These and other efforts to

significantly reduce the incarceration of non-violent

offenders are what’s best for society and also save

millions in taxpayer dollars.

The Department of Corrections (DOC)—like the

Tourism Department, Office of Juvenile Affairs, and

many other state-operated services—can utilize the

private sector to reduce the cost of providing state

services. If the DOC would fully utilize the available

private prison beds (“halfway” houses) as authorized

by law, the state could save approximately $34 million

a year (based on state costs per bed in 2009).


Corrections receive the same appropriation provided

for FY 2012, less savings from full utilization of “half-

way” houses and private prison beds, less savings


insurance reform.

ABLE Commission

FY-2012 $ 3,140,334


$ -


FY-2013 $ 3,095,137

Department of Corrections

FY-2012 $ 459,831,068


Implement full usage of half-way houses and

private prison beds as allowed by law $ (34,000,000)

$ -


FY-2013 $ 421,249,454


Fire MarshalThis budget recommends that the Fire Marshal re-




State Bureau of InvestigationThis budget recommends that the State Bureau of

Investigation receive the same appropriation provided

Fire Marshal

FY-2012 $ 1,796,764


$ -


FY-2013 $ 1,768,680



Law Enforcement Education and Training

This budget recommends that Law Enforcement

Education and Training receive the same appropriation

provided for FY 2012, less savings from the implementa-


Board of Medicolegal Investigations

This budget recommends that the Board of Medi-

colegal Investigations receive the same appropriation



State Bureau of Investigation

FY-2012 $ 13,848,059


$ -


FY-2013 $ 13,488,019

Law Enforcement Education and Training

FY-2012 $ 3,682,560


$ -


FY-2013 $ 3,635,717

Board of Medicolegal Investigations

FY-2012 $ 4,698,281


$ -


FY-2013 $ 4,618,418


Narcotics and Dangerous DrugsThis budget recommends that the Bureau of Narcotics

and Dangerous Drugs receive the same appropriation

provided for FY 2012, less savings from the implementa-


Department of Public SafetyThe Oklahoma Department of Public Safety (DPS)

issues thousands of drivers’ licenses per year, but us-

ers (those receiving the licenses) are not adequately

sharing the burden associated with issuing these li-

censes. According to information available publicly,

taxpayers subsidize DPS’s operation of drivers’ li-

censing by more than $12 million annually. Driver li-

censing is a direct regulatory service which should be

paid for by those being licensed. Reforms that lead to

more efficient and effective licensing, along with re-

quiring users to bear the full cost of the licensing, will

allow for the reduction in state subsidies. This budget

recommends that the DPS receive the same appro-

priation provided for FY 2012, less subsidies for driver

licensing, less savings from the implementation of the




Narcotics and Dangerous Drugs

FY-2012 $ 3,616,418


$ -


FY-2013 $ 3,489,055

Department of Public Safety

FY-2012 $ 84,894,790

Require Licensed Driver, Users to fully support driver regulation $ (12,968,193)


$ -


FY-2013 $ 70,326,271


Judiciary

Attorney GeneralThis budget recommends that the Attorney General




Court of Criminal AppealsThis budget recommends that the Court of Criminal

Appeals receive the same appropriation provided for

Attorney General

FY-2012 $ 13,228,141


$ -


FY-2013 $ 13,064,028



District Attorneys CouncilThis budget recommends that the District Attorneys

Council receive the same appropriation provided for



Court of Criminal Appeals

FY-2012 $ 3,334,631


$ -


FY-2013 $ 3,304,024

District Attorneys Council

FY-2012 $ 32,887,258


$ -


FY-2013 $ 31,655,968


Council on Judicial ComplaintsThis budget recommends that the Council on Judi-

cial Complaints receive the same appropriation



Pardon and Parole BoardThis budget recommends that the Pardon and Pa-

role Board receive the same appropriation provided



Council on Judicial Complaints

FY-2012 $ 75,000


$ -


FY-2013 $ 72,806

Pardon and Parole Board

FY-2012 $ 2,217,454


$ -


FY-2013 $ 2,177,084

Indigent Defense SystemThis budget recommends that the Indigent Defense

System receive the same appropriation provided for



Indigent Defense System

FY-2012 $ 14,699,353


$ -


FY-2013 $ 14,575,390

District CourtsThis budget recommends that the District Courts re-




District Courts

FY-2012 $ 56,100,000


$ -


FY-2013 $ 55,413,817


Supreme CourtThis budget recommends that the Supreme Court




Workers’ Compensation CourtThis budget recommends that the Workers’ Compen-

sation Court receive the same appropriation provided



Supreme Court

FY-2012 $ 17,300,000


$ -


FY-2013 $ 17,106,157

Worker’s Compensation Court

FY-2012 $ 4,197,166


$ -


FY-2013 $ 4,118,620


Rural Economic Action Plan (REAP)According to the website of the Kiamichi Economic

Development District of Oklahoma (KEDDO), “In 1996,

the Oklahoma Legislature created the Rural Eco-

nomic Action Plan (REAP). This Plan has made funds

available for each of the rural Economic Development

Districts to fund projects in communities with popula-

tion of less than 7,000 and giving priority to fewer than

1,500 residents. Oversight of the application process

is given to each of the Economic Development Dis-

tricts ...” While most projects are small, some projects

utilizing REAP funds are beneficial (road repairs)

while others more resemble political patronage, ear-

marks, and “pork” (cars, renovations for community

centers and storage buildings, etc.). Legislation in

2010 has helped steer REAP funds to more worthwhile

projects, but the program still falls short in providing

communities what they really need to thrive: job cre-

ators.

The failure of government programs to generate

sustained “economic development” is nothing new.

Oklahoma needs a bold, transformational plan that

allows citizens and job creators to retain more of their

own money to invest and spend, so local communities

can attract job creators and not be reduced to reli-

ance on unsuccessful state programs that breed more

dependency. This is one of the main reasons Okla-

homa must empower local communities by phasing

out its personal income tax. As noted in the OCPA/

Laffer study “Eliminating the State Income Tax in

Oklahoma: An Economic Assessment,” stronger eco-

nomic growth would mean increased revenues for lo-

cal governments across Oklahoma. And because

there is no static tax reduction, every dollar of in-

creased revenue created by Oklahoma’s stronger

economy would increase the expenditure power of the

economic growth estimated in the study. “Assuming

local government revenues’ share of personal income

remains constant, in aggregate, revenues for local

governments would increase by $100 million in 2013,

rising to an increase of $3.5 billion by 2022 local gov-

ernments.” Therefore, based on the economic gain to

local communities by lower state tax burdens, and the

less-than-desired results of most state “economic de-

velopment” programs, this budget recommends that

the legislature no longer fund the REAP program.

Revive free enterprise

Reshape the state-local government relationship


OSU Medical CenterThis budget recommends that the OSU Medical Cen-

ter receive the same appropriation provided for FY 2012.

Rural Economic Action Plan (REAP)

FY-2012 $ 11,532,469

Discontinue REAP program $ (11,532,469)

$ -


FY-2013 $ -

OSU Medical Center

FY-2012 $ 5,000,000

$ -

Total Savings $ -

FY-2013 $ 5,000,000

Oklahoma Council of Public Affairs

1401 N. Lincoln Blvd.

Oklahoma City, OK 73104

Tel: 405.602.1667

Fax: 405.602.1238

ocpathink.org

FY-2013 Proposed State Budget

Documents

Transcript of FY-2013 Proposed State Budget