By Rep. Mike Sanders
A group of business and civic leaders recently announced a combination of reforms and revenue measures they call the Step Up Oklahoma plan. Their hope is to eliminate abuse and waste in state government while raising revenue to pay for a $5,000 teacher pay raise and to fund what they consider to be core services for the state of Oklahoma.
The group behind this plan met with the governor and legislative leaders over the past several weeks. The group includes many corporate leaders as well as several large newspaper publishers as well as television and radio station owners. The plan is similar one released by the state chamber late last year.
The plan includes many reform measures, including these that I really like:
- Increase teacher pay by $5,000;
- Revise the state budget to reflect accurate numbers (all revenue sources and all expenditures – not just appropriated amounts under the purview of the Legislature);
- Establish a budget stabilization fund that would be structured similarly to an endowment where the income generated could be used to cushion the budget during economic downturns;
- Give the governor direct appointment power over the largest state agencies;
- Create an independent budget office to assist with eliminating waste.
Other suggested reforms:
- Modify term limits for lawmakers;
- Lower the supermajority required to raise revenue;
- Make the governor and lieutenant governor running mates;
- Change the process to fill Supreme Court vacancies;
- Allow voters to decide the structure of each county’s government – home rule.
Revenue-raising measures in this proposal:
- Raise the tax on cigarettes, little cigars, chewing tobacco and e-cigarettes;
- Raise gross production tax on oil and gas wells; impose a new tax on wind energy;
- Increase the price of motor fuels;
- Eliminate certain income tax deductions and loopholes and reform the tax code;
- Expand taxable gaming activities;
I want to express my appreciation and thanks to these community leaders for being willing to help Oklahoma come out of its recent recession and address budget reform. Their plan is certainly ambitious.
It must be noted that this plan could not proceed as one package deal. Several measures require constitutional changes and thereby a vote of the people through individual state questions. Another concern would be the state Supreme Court’s recent rulings on logrolling – legislation that contains more than one issue. Typically, appropriations bills are allowed to proceed under the one-topic rule, but combining revenue measures with reforms could pose a legal challenge.
I’ve talked to many lawmakers and they have concerns with measures such as the ones that remove income tax exemptions or that would raise personal income tax rates. Redoing county and municipal government under a home rule structure also brings concerns.
Oklahoma has 101 duly elected representatives and 48 senators in our state Legislature. Each represents a varied body of constituents. There has to be room for negotiation and give and take. We certainly will be reviewing this plan over the next few weeks. I’ll keep you posted on our work.
By Rep. Mike Sanders
The latest revenue reports for the state contain some very good news. Collections are up, and companies are hiring. All signs are positive for the economy.
According to the latest state treasurer’s report, December collections to the state treasury were $1 billion – up $107.9 million, or 12 percent – compared to receipts from December 2016. During 2017, gross receipts were $11.45 billion – 6.2 percent, or $667.6 million – above 2016 collections.
The state showed across-the-board growth in every major revenue stream – income tax, gross production tax, sales tax, motor vehicle taxes and other sources. Monthly receipts were up 11 out of the past 12 months.
Allocations to the state’s General Revenue Fund also are improving. November GRF allocations exceed the estimate by 14.1 percent. Fiscal-year-to-date collections are ahead of the estimate by 9.4 percent. The General Revenue Fund is used by the Legislature to appropriate money for core government services such as transportation, public safety, health care and education. So this is good news for our roads and bridges, our police and fire departments, our rural hospitals and nursing homes and our schools.
The Tax Commission attributes $24.2 million in December to new revenue resulting from legislation enacted during the last regular session. The additional revenue comes primarily from changes in sales tax exemptions and gross production incentive tax rates. The new revenue accounts for 22.4 percent of the growth in December collections compared to the prior year.
In addition, the state’s unemployment rate is down, and state jobless numbers have improved. Many companies report they are hiring. The Oklahoma Business Conditions Index shows anticipated economic growth during the next three to six months. Oil and gas prices are up as are active rig counts – important for a state still heavily reliant on energy to fund many services for our citizens. New wind projects are in the works. Retailers are reporting positive sales over Christmas.
After several years of recession and budget decline leaving gaps in funding from one budget year to the next, this sustained positive revenue and job growth is terrific news. If revenue growth continues, we could end the fiscal year with no budget hole. This is so different from the doom and gloom diet we’ve all been fed for the past year.
The Legislature will still need to consider how to pay for teacher pay raises as well as restore funding to transportation, public safety and health care. But, I can assure you that any revenue proposals put before the Legislature this year will be attached to specific reforms and will come with accountability measures for our state agencies.
I want to address the narrative that the Legislature for too long has relied on one-time funding sources to balance the state budget. It is true, that during the recent recession we relied on using our Rainy Day Fund or the state’s Special Cash Fund or some of the state’s 1,100 revolving funds to fund core services. This is not unlike a family, though, who puts money aside for emergencies. Would they rather spend that money on a new car or a family vacation? You bet, but if they need to use it to buy groceries or pay bills during an illness or a stint of unemployment, they’ll do that before they consider asking someone else to bail them out.
More work still needs to be done, but these indicators are positive and this is great news for our state.
On a final note, be on the lookout for my annual citizen opinion survey, which should reach you in the next week or two. This gives you the opportunity to tell me what issues are most important to you. Please take a few moments to fill this out when you receive it and get it back to me. I really do rely on your input to help me represent you.
By Rep. Mike Sanders
As the clocks ticks down on 2017, I can’t help but be hopeful that 2018 will be a better year for Oklahomans.
This past year presented some challenges for people in our House District, people throughout the state and for lawmakers at the state Capitol. There’s still plenty of work to do, but things already are looking better for the future.
Revenue in the state is up for 11 of the past 12 months. Employers say they are hiring – manufacturing, oil and gas, wind industries are among those increasing jobs. We’re getting some things cleaned up in our state agencies so they can operate more efficiently, saving taxpayer dollars. New leadership is in place in several areas, and light is shining bright on areas that need further restructuring.
As a new year starts, I resolve to continue working to improve area roads and bridges; to enhance public safety; to continue working towards giving our teachers and state employees a pay raise; and to protect rural hospitals and nursing homes. As a small-government conservative, I will continue to work to ensure core needs are met but to scour for areas of waste and inefficiency.
I want to take this time to thank each of my constituents who have reached out to me in the past year to offer prayers or suggestions, voice concerns or ask for help. I value this input. With your help, I am able to better serve all the people in House District 59. Thank you for allowing me to be your voice at the state Capitol. Please know I will continue to strive to always to the right thing for you and for Oklahoma.
I wish each one of you a happy and prosperous New Year, one filled with hope and opportunity to live life at its best.
By Rep. Mike Sanders
At this time of year, it’s easy to get caught up in all the trappings of the season: the shopping, the lights, the search for the perfect tree, the perfect presents, the decorations, baking, wrapping, family traditions, you name it.
We have some wonderful traditions in our House District, and I enjoy each one of them.
It’s also a great time of year to remind those closest to us that we love and appreciate them. I love finding the perfect gift for my wife Nellie, something that helps show her how much she means to me and to our boys. I love seeing the excitement on our sons’ faces when they get up early Christmas morning to see what Santa brought them.
I’m grateful for my extended family, especially my dad. I love getting to spend time with him this time of year.
I appreciate our military men and women, many of them away from home during the Christmas season. I extend to them a very Merry Christmas and wish for them a happy New Year. This goes out to our first responders as well – our police officers and firefighters, our EMTs. It extends to our teachers and other educators who watch over our children and make sure they are learning all they need to know to be successful in the future. It goes to our civil servants who work hard every day to ensure we have the state services supplied by government funds.
But maybe after a while you’re a bit like me. The business of the season, the lights, the colors, the sounds, the smells, the enormous amounts of food, can all start to feel a bit overwhelming. I sometimes find myself at this time of year, asking like Charlie Brown did in “A Charlie Brown Christmas,” “Isn’t there anyone who knows what Christmas is all about?”
Sweet little Linus gives the answer, when he quotes Luke 2:8-14 from the Bible.
“And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of David a Savior, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger. And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, ‘Glory to God in the highest, and on earth peace, good will toward men.’”
“That’s what Christmas is all about Charlie Brown,” Linus says.
Indeed it is. Merry Christmas to all.
By Rep. Mike Sanders
When many people think of the nation’s first Thanksgiving, they often envision the Pilgrims sitting down with a group of First Americans sharing a harvest dinner.
I want to harken to the Thanksgiving Day called to observance by President George Washington in 1789, the same year the government of the United States of America began under the newly ratified Constitution.
President Washington issued a proclamation declaring an official holiday of “sincere and humble thanks” to be observed in November of that year to honor the new Constitution.
According to the George Washington Mount Vernon Society, “Washington declared that the necessity for such a day sprung from the Almighty’s care of Americans prior to the Revolution, assistance to them in achieving independence, and help in establishing the constitutional government.”
The items spelled out in Washington’s proclamation are things for which I still am thankful – the Almighty’s care and protection, His help in establishing and helping us maintain our liberty, and the opportunity to peaceably establish a constitutional system of government for our safety and happiness.
I may not always agree with our government, but I can honestly say I’m grateful for the foundation laid so carefully by our nation’s founding fathers and the Constitution that allows us to this day to continue to live in tranquility and freedom.
I’m grateful as well for my family – my wife Nellie and our boys. I’m very blessed.
I’m grateful for the district in which we live, for the people who enrich our lives in so many ways. I will continue to serve you to the very best of my ability.
On Thanksgiving as every day, I offer grateful prayers for our military – our service men and women who protect us both at home and abroad; for our law enforcement officers and our first responders; for our teachers and other civil servants who keep our many community services running. I’m thankful for the many business owners who choose to call House District 59 home.
As you go about your busy lives, I hope you too will take a moment to express your gratitude towards others and in the words of Washington, “Acknowledge the providence of Almighty God, obey His will, be grateful for His benefits, and humbly implore His protection and favor.”
By Rep. Mike Sanders
I voted no on the stop-gap budget bill this week.
From day one I have been a supporter of the County Improvements for Roads and Bridges (CIRB) Fund. I have voted against state budgets in the past because they dipped too heavily into transportation. It’s one thing when our partners in transportation tell us they have enough to complete their projects and that we can pull the excess for other necessary state services. But, when Western Oklahoma county commissioners tell me this will hurt projects currently in the five-year plan, I believe them, and I stand with them.
Safe and well-maintained roadways are a vital part of our infrastructure, allow for economic development in rural Oklahoma and, most of all, assure our families can travel safely in their daily routines.
The state’s top three medical and health agencies will be funded, and the agency directors were very supportive of this bill. Keeping our rural nursing homes and hospitals open was my top priority of this special session.
Twelve agencies will receive no cuts. These include common education, the state Health Department, Corrections and the Indigent Defense System, among others.
One source of revenue for the state budget is a removal of a remaining credit on gross production taxes on legacy oil wells (those drilled before July 2015) from 4 percent to 7 percent. This will bring in almost $49 million this fiscal year and about $100 million next year.
In the meantime, the state receives some positive economic news. October gross receipts rose by 10.6 percent over the same month a year ago. This is the first time for double-digit growth in the last 4½ years. It’s also significant that nine out of 10 months this calendar year have shown growth over the previous year as have almost all major revenue streams.
Our No. 1 mission during this special session was to take care of the health care crisis, and we have done that. Now we are preparing for next session. The House is still committed to a teacher and state employee pay raise, and we will continue to fight for that among other priorities.
By Rep. Mike Sanders
The House on Wednesday voted on House Bill 1054X that would have increased taxes on cigarettes, cigars and smokeless tobacco; gasoline and diesel; 3.2 beer consumed on premise; and the gross production tax on new oil wells.
The $79.1 million from the tobacco tax would have gone to the three health care agencies affected when the state Supreme Court struck down the Smoking Cessation Act of 2017. This would help keep services for our most vulnerable in place as well as our rural hospitals and nursing homes open.
The $40.5 million from the motor fuels tax would have been designated for roads and bridges beginning in July.
The $10.4 million from beer, and $2.1 million from gross production tax would have gone towards a teacher and state employee pay raises.
Those who don’t use tobacco or drink will not pay those taxes.
The bill failed to get the 76 votes required.
The bill was held over so it could be brought back to the House floor for another vote. I’m not sure yet whether that will happen.
In the meantime, the House already has passed – appropriations of state carryover cash, as well as a measure that increases the gross production tax on legacy wells (those drilled before July 2015) from 4 percent to 7 percent.
The measures await approval by the state senate and the signature of the governor.
I’m disappointed HB1054X failed.
For those who said they wouldn’t vote on this bill before we audit our agencies, I would say, I agree, we must audit our agencies for waste and fraud. But, those audits will not start in time to save our core health care services, to fix our roads and bridges, and to give our teachers and state employees a much needed raise.
People in this state are looking for leadership and a solution for our budget problems now. I have looked for compromise among my fellow Republicans and with my Democrat colleagues. I have taken a reasonable and bipartisan approach to this entire process and will continue to do so. I have listened to the people of my district, and I will always vote with those who hired me to do this job.
By Rep. Mike Sanders
The House of Representatives this week voted overwhelmingly to appropriate supplemental funding to three state health care agencies to protect services for the state’s most vulnerable citizens.
In three separate bills on Monday, the House voted to use about $106 million in Rainy Day and carryover funds from fiscal year 2017 to send to the Department of Mental Health, the Department of Human Services and the Oklahoma Health Care Authority. Without the funds, the agencies had threatened to cut programs that serve the aging, foster children and the disabled, among others. House leaders said from the beginning, we were not going to let these three agencies feel the brunt of the budget shortfall. Keeping our rural hospitals and nursing homes open and ensuring health care services for those most in need is of paramount importance.
We couldn’t do this at the outset of our special session because the governor threatened to veto any bill that made use of these reserve funds or that cut spending for state agencies.
After months of trying to reach a bipartisan solution with House Democrats and the state Senate, however, this became the only solution that would garner enough support to pass the House and be sent to the Senate. These measures now go to the Senate for passage before the move to the governor for her signature. Any delay in the process threatens Oklahomans who need these health services.
In addition to the above measures, the House on Wednesday passed a measure that would end the incentive on gross production tax on legacy oil and gas wells, moving the tax rate from 4 to 7 percent. This is projected to earn about $48.5 million this fiscal year to help plug our budget hole, and up to $100 million next fiscal year that could be spent on teacher pay raises.
The House also passed a version of the teacher pay raise plan that would give teachers the first $1,000 of a pay raise beginning July 2018.
One additional measure would allow ball and dice games at tribal casinos that would raise $8.3 million this fiscal year and $35.6 million next fiscal year.
These measures still leave a small hole in this fiscal year’s budget. This could later be filled with supplemental funding once state reserves are replenished, or we could make some targeted cuts to state agencies without affecting core services. There are other options on the table as well. We’re still committed to finding a bipartisan agreement.
In the meantime, House leadership will continue to look for long-term budget solutions and to explore further efficiencies and look for cases of waste or outright abuse in state agency spending. You need look no further than the recent shakeup at the state Health Department to see examples of the kind of cleanup that is needed in our agencies.
By Rep. Mike Sanders
House Republican leadership this week announced a plan that was agreed upon with the Senate and the governor. In it, we gave Democrats much of what they asked for in their own plan. We brought this plan to a vote on the House floor Wednesday.
The plan included an increase of $1.50 on the tax on cigarettes, cigars and smokeless tobacco; 6 cents on gasoline and diesel; additional tax on 3.2 beer; and the restoration of the Earned Income Tax Credit for the state’s lowest income earners.
The speaker also generously offered to put a measure raising the gross production tax on oil and gas wells to 5 percent to a vote of the House if the first plan passed. This is something the Democrats have requested for months.
Money would go to fill the current budget hole that threatens to affect health care, mental health and human services for our state’s most vulnerable citizens as well as to fund a $3,000 teacher pay raise and a $1,000 pay raise for state employees.
This plan contains recurring revenue, which is something everyone has insisted upon for our state budget. While it does include some revenue increases, it does so only on the basis of consumption. In the case of fuel, the tax will be spread out among all consumers – from high to low income as well as from individuals to corporations. In the case of tobacco products or beer, the tax affects only those who consume these products.
I campaigned on the premise of keeping taxes low. When it comes to making decisions that could keep my rural hospitals and nursing homes open and provide needed services for children and the aging, I had to vote in favor of people first. They are my first priority.
The gasoline tax would have gone to fund roads and bridges. This is necessary and something that should have happened 20 years ago. The gasoline and diesel tax in Oklahoma has not been raised since 1987. We have one of the lowest taxes in the nation and the lowest in the region. About 40 percent of the gas and diesel tax is already paid by out of state visitors, and as I said above, this is a tax that could be spread evenly among all consumers.
The earned income tax credit is something I voted against removing in the first place, and I have advocated for its return. This credit is something President Ronald Reagan and former Gov. Frank Keating both championed. I’m honored to join these heroes of conservatism in support of this good cause.
Teacher and state employee pay raises are paramount. Out teachers have gone without an increase to the minimum state salary schedule since 2008, and state employees have been without a pay raise for 11 years. This is something everyone wants and supports.
This plan is not perfect; no compromise is; but it would have solved the state’s current revenue problems and put us on a more sustainable path toward the future as we continue the work of reforming our budget process and begin work to audit our state agency spending.
At the end of the day Wednesday, Republicans put up 75 percent of the votes needed to pass this package while every Democrats voted in a block against it, even though every item included is something they have asked for in past plans. It’s always been apparent, but now more than ever, Republicans will have to fix this budget problem brought by a national recession and a depression in oil and gas by ourselves. The question is, do they really want a solution? Their actions say otherwise.
One final reminder: not everything you read on social media is true. There is no accountability in that theater. Instead, if you have a question or concern, my door is always open. I always respond to my constituents. I always have and I always will.
By Rep. Mike Sanders
The Legislature convenes in special session Sept. 25. This is after the state Supreme Court ruled unconstitutional the Smoking Cessation Act of 2017, leaving a $215 million hole in the budget to be re-appropriated by the Legislature.
The easiest way to fill this hole and leave state services at current appropriation levels would be for the House and Senate to pass the original cigarette tax of $1.50. This is the only tax increase the majority of Oklahomans have said they would support. The caveat is this takes a two-thirds vote in both chambers. In the House, that is 76 votes. House leadership has tried to pass this tax the last two legislative sessions, but the minority leader has led his caucus into choosing not to keep rural hospitals and nursing homes open and let other health care services take a hit.
This is disappointing to say the least. I hope he and his caucus will now put politics aside and do what is right for Oklahomans.
If the tax fails outright, we will vote to put it to a vote of the people, which would take only a simple majority of 51 votes.
Since the court’s ruling in August, House leadership and the majority party have met regularly – the Republican Caucus met this week – to develop a plan that will preserve core government services but make strategic cuts to ensure efficiency and an end to waste and duplication. We currently have a plan we will be rolling out in time for special session. I will give more details in next week’s column.
I’ve been asked why we need a supermajority to pass the cigarette tax. This goes back to State Question 640, passed in 1992. After a state recession, Democrats then in charge raised multiple taxes. Oklahomans voted to make it harder to do so in the future, instituting the two-thirds majority vote requirement.
I will keep you updated on happenings here.
In one other piece of business, I again must express my disappointment with the state Department of Human Services. They recently announced that as of Oct. 1 they will begin assessing a fee on child support payments. This fee is not charged to the person making the payments but rather comes out of the pocket of the person receiving the payment – even if that person is a single mom or a single dad. In addition, two-thirds of this fee goes to the federal government because they provide the bulk of the program.
This is inexcusable. DHS should be ashamed of itself, taking money from already struggling single parents. I will not stand for this, and will lead the charge to reverse the rule that allowed this fee to go forward to be signed by the governor.
As always, I’d love to hear from you. I can be contacted at Mike.Sanders@OKHouse.Gov or (405) 557-7407.