Rep. Russell Releases Waste Watch No. 8

Washington, DC – Rep. Steve Russell (OK-5) today released the latest edition of his Waste Watch series. Waste Watch No. 8 is the Farm Bill Edition, identifying 10 examples of wasteful government spending and programs in agriculture that wasted $16.5 billion in taxpayer dollars.

In the Farm Bill Edition, Rep. Russell highlights how the poor implementation of a U.S. Department of Agriculture (USDA) initiative to update nutritional standards for the National School Lunch Program led to $11.6 billion in wasteful government spending as well as food waste in 48 of the 50 states, according to the Government Accountability Office. Other examples include how researchers at the University of Illinois at Chicago were awarded $3.5 million by the USDA and the National Institutes of Health to remix Katy Perry songs into a hip-hop album that encourages obese preschoolers to lose weight; and how a lack of oversight and enforcement has allowed fraudulent food stamps to cost the government at least $12 million according to an inspector general report on the USDA’s Supplemental Nutrition Assistance Program.

Rep. Russell commented on his latest edition of Waste Watch, stating “Another year has passed and another year of waste cutting opportunities stands before us. From fraud to mismanagement to poorly conceived but well-funded programs, our nation must address these issues. We have ended up in significant national debt by one careless decision at a time and we can get out of it by one good decision at a time. Our latest edition is a good place to start as we approach the Farm Bill reauthorization.”

Rep. Russell has introduced 11 cost cutting bills this Congress, which if enacted would save the taxpayer $28.5 billion. His legislation has saved $4 billion thus far, and all eight editions of Waste Watch highlight more than $316.5 billion in wasteful government spending.

On Tuesday afternoon in Oklahoma City, U.S. Rep. Steve Russell sat before a crowd of like-minded fiscal conservatives and spoke about government waste.

“I had a lady, God bless her, from the National Science Foundation … she came in and she tried to make a compelling argument for why we needed shrimp-on-treadmill studies. I was not convinced,” Russell said.

The line garnered laughter from many in the crowd. John Tidwell, state director for Americans for Prosperity and host of the conversation, asked what the scientist’s argument was.

“That we could learn something from it,” the Republican congressman said to more laughter.

Tidwell asked, “That the shrimp could learn something from it?” and again there was laughter before Russell reached the moral of the story, the point he was trying to make.

Read the complete story on NewsOK.com

Bill approved to give Legislature better look at state debt

OKLAHOMA CITY – The Oklahoma Legislature would have a better picture of total state debt under a measure passed unanimously Tuesday.  Senate Bill 638, by Sen. Greg Treat, would require the State Bond Advisor and the Office of Management and Enterprise Services to produce an annual written debt affordability study to be presented to the Legislature and Governor by January 15 each year.

“Having this annual study would provide the Legislature with a clearer understanding of our long-term state debt so that we can make more fiscally responsible decisions not just for the next few years but for future generations,” said Treat (R-Oklahoma City).  “We have an obligation not only to the citizens of Oklahoma today in providing crucial state services and being good stewards of their tax dollars but we must also work to create a stronger Oklahoma for our children and grandchildren.”

The study would include the state’s debt relative to its benchmark debt ratio, which caps debt service at five percent of revenues.  It would combine existing reports, such as the Bonded Indebtedness Report and the State Bond Advisor Annual Report, to analyze Oklahoma’s debt position.  Data would include net tax-supported and net revenue-supported debt for the most recently concluded fiscal year as well as the debt for state major component units and agencies for which the state may hold ultimate financial responsibility such as the Oklahoma Housing Finance Agency, the Oklahoma Turnpike Authority, and the Oklahoma Municipal Power Authority.

The bill requires the study to include projections of debt service, future debt issuance, and debt to capacity (such as debt service as a percentage of revenues).  Each projection would extend at least five years from the fiscal year of the study’s publication.  Also included in the study would be a discussion of Oklahoma’s unfunded pension liabilities and the impact of these liabilities on the state’s ability to borrow and the cost of debt.  The study would identify and calculate relevant metrics including debt service as a percentage of revenues, total debt as a percentage of state personal income, and total debt per capita.  Analysis would compare debt metrics to a select group of at least ten other states.  A sensitivity analysis would also be conducted to understand the effects of uncertain conditions including, but not limited to, analysis of the impact of revenue and interest rate volatility on debt ratios. Finally, it would provide an estimate of available debt capacity Oklahoma could issue over the next five years without causing the benchmark debt ratio of debt service as a percentage of revenues to exceed five percent.

The proposed debt affordability study would make Oklahoma one of 28 states to provide such research.

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Governor Mary Fallin Directs State Agencies to Sell Underutilized Property, Buildings
Money from sales to help pay for maintenance of state buildings

OKLAHOMA CITY – Governor Mary Fallin today filed an executive order directing state agencies to dispose of any underused property and buildings to generate revenue to pay for the maintenance of state buildings and help offset projected state revenue shortfalls. Her order includes undeveloped land as well as unused or underused office buildings, warehouses and residences.

Agencies have successfully identified and sold unused or underused assets in the past. For example, in July of this year the Department of Human Services sold the former Laura Dester Center property to the city of Tulsa for $955,000. Half of the buildings on the campus were considered underutilized; annual savings as a result of selling those underutilized buildings and not having to pay for such things as maintenance, utilities and landscaping is estimated between $50,000 and $63,000.

“Disposing of underutilized property will reduce costs and ensure our taxpayer dollars are going towards the core government services that Oklahomans rely on,” said Fallin. “That is especially important as we approach what we know will be a tough budget year.”

Selling underutilized property also will help local governments, she said. Properties sold to private purchasers will be placed on local tax rolls.

In most cases, proceeds from the property sales would go to the Maintenance of State Buildings Revolving Fund.

Fallin’s order seeks to expand progress made under legislation enacted in 2013 requiring agencies to dispose of underutilized state properties. Since 2013, the state has generated $1.5 million through the sale of six underutilized state properties.

The state Office of Management and Enterprise Services will assist state agencies with the disposal of underutilized property assets, according to the executive order.

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1. Tell us about your roots.
I grew up in Archer City, Texas a small town of 1,800 about 40 miles south of the Red River, squarely in Tornado Alley and where the tornado siren sounded at noon every day, not just Saturdays. So, the tornado warnings last spring were familiar, though I’d not experienced that in over 30 years. One thing I truly missed when I left home for Texas A&M was the spectacular sunsets at the end of a stormy day. Being a small-town/rural guy at heart, I like horizons unobstructed by too many trees, huge buildings, and super highways. My move to Oklahoma City after almost 8 years in Phoenix is my first to a metro smaller than I’d lived in immediately before. My accent sounds more normal here than it did even in Austin, although linguists call it “Texas Southern.” In many ways, I’m more at home here than anywhere since I’ve left home.

My roots are this area of the country. I’m closest to my parents now than any time since leaving home. But my deep roots are still in Texas, where most of my family lives. My great-great grandfather brought his family from Prussia in 1875 and settled in Burnet, near Austin, where farming is hard due to the thin soil and there were few other Germans. A house built by my family of rough, homemade concrete 140 years ago still stands, though it is no longer family owned. I’m also of Scottish decent, with some Cherokee blood, supposedly, on my mother’s side.

My dad was a medical doctor, but my brothers and I experienced true country life through family friends. Consequently, I have a yearning for self-sufficiency and am an avid do-it-yourselfer. I’ve never farmed anything but a lawn or raised anything other than dogs and cats, though.

2. What does the State Policy Director do?

I research, write, appear on radio and TV, will testify if called upon, and deliver speeches. I also administer the Institute’s website, edit papers from other scholars, and see to their online publication. Right now, the 1889 Institute has a president, Vance Fried, an Oklahoma State University academic, who is strictly part-time, and me. So, I am the primary research generator.

3. What are you/1889 hoping to accomplish?

The Institute is concerned with five fairly broad policy areas: welfare, education, health care, economic development, and state fiscal health. We come at these issues from a strong free enterprise, limited government perspective. But what motivates everything is the desire to see everyone free to use his talents to maximum potential and value as defined by free human beings. As has been argued by intellects far greater than us, this is best accomplished through largely unregulated free markets in a system where private property rights and contracts are enforced. We look for and write about policies, accordingly. We believe, for example, Oklahoma would greatly benefit from Education Savings Accounts, a system that puts parents in charge of their children’s educations.

4. What would you say are the three most pressing issues in our state?

Education, the federal government, and the tax system.

Oklahoma does not do public education very well and the funding issue is overblown, as it always is in this country. The key is to bring greater accountability through educational choice.

The federal government has, in some ways, commandeered states, especially in health care. This state is especially under threat with respect to energy policy. The Institute’s priority is on the state budget and the degree to which Oklahoma should resist the temptation to claim federal funds in exchange for lost sovereignty.

When corporate board members fly in from out-of-state and have to fill out withholding statements, it becomes obvious why they might prefer meetings in Dallas. Oklahoma suffers from having an income tax. Taxes in this state are misapplied. And, there is too much talk about increasing taxes for education.

5. What do you do in your spare time?

I read, mostly non-fiction. I especially enjoy reading about World War II, and have since I was in high school. As mentioned before, I’m also a do-it-yourselfer. I maintain a very old motorhome, do home improvement, and enjoy carpentry. I also enjoy a brisk motorcycle ride. When it comes to sports, well, I’m a Texas Aggie and I always catch the football games on TV.

House Examines Strategic Tax Reform Proposals

OKLAHOMA CITY – A tax on service transactions would be a more reliable revenue stream for the state and could potentially replace the corporate income tax and possibly the individual income tax, state Rep. Mark McCullough told colleagues in the House Appropriations & Budget Subcommittee on Revenue and Taxation during an interim study at the state Capitol today.

McCullough said a service tax would levy a tax on transactions between service providers and customers, including everything from oil changes and legal services to air conditioning installations and medical care.

“This is not a tax increase proposal; this is a dollar for dollar swap that I am suggesting,” said McCullough, R-Sapulpa. “We live in a service-based economy. The benefit is that services would be a much more reliable revenue stream for the state than corporate taxes or income taxes, which have proven to be unstable.”

McCullough said the corporate tax simply doesn’t work and that personal income taxes are too reliant on the energy sector, which can be unstable. Tony Mastin, Director of the Oklahoma Tax Commission, told the committee that two-thirds of Oklahoma corporations don’t even pay the tax because of exemptions and profit requirements in law, and that revenue from the tax has fluctuated from as much as $550 million some years to $150 million in other years.

“The corporate tax is a joke and any effort to repeal corporate tax credits is extremely difficult,” said McCullough. “We can’t win because the corporations send armies of lobbyists to the Capitol if you even suggest repealing a tax credit. So let’s beat them at their own game and just repeal the corporate tax altogether.”

McCullough said his primary goal is to build a tax structure for the state that is more competitive, predictable and more in line with a modern economy that is service based and digitally driven.

“It seems like every year we have a budget crisis, and that is primarily because we have unstable revenue streams. We rely too heavily on the energy sector for revenue, which is a roller coaster. And those ups-and-downs not only affect oil and gas tax revenues, but they also affect personal income tax revenues. Our corporate tax structure is completely ineffective and unreliable. Sales taxes have increased from year to year, but we are unable to capture revenue from online transactions.”

McCullough said a service tax would be more fair and predictable.

“The idea is that everybody pays – no carve outs, no exemptions,” said McCullough. “Tax all services at a very low rate, across the board. Conservative economists say the key to increasing revenue and maximizing economic activity is a flatter rate, a broader base and fewer exemptions. This plan answers all of those requirements.”

Similarly, McCullough proposed replacing the state’s neither high nor low income tax with either a flat three percent rate with no exemptions or an outright reduction of the rate to zero. He added that going to zero would be difficult to accomplish.

“Look, we’re not Texas, and personal income tax is an important revenue stream for us in Oklahoma,” he said. “A flat three percent rate with no exemptions would still give us that revenue stream while also making us extremely competitive with other states.”

The ideas for the reforms emerged from the House Tax Policy Working Group, established in 2014, which included state Representatives McCullough, Charles McCall (R-Atoka), Tom Newell (R-Seminole), David Derby (R-Owasso) and Earl Sears (R-Bartlesville).

McCullough said he would like the citizens of Oklahoma to make the decision by placing a question on the state ballot.

“Our current tax structure is badly broken and cannot be relied on to provide the level of revenue the state needs from year to year,” he said. “In my time serving in the Legislature, there has been very little thought put into determining whether our current system is effective and, if not, whether it can be improved. Part of our job is to identify long-term problems and to think critically about those problems. The truth is, we don’t really have a tax strategy in Oklahoma. We have an ad hoc tax policy that is reactive and backward looking. We need a forward-looking tax strategy that accounts for the modern world that we live and work in.”

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Chief state budget officer says state ‘well-prepared’ for revenue skid
By RANDY KREHBIEL World Staff Writer

The state’s chief budget officer on Friday downplayed the potential impact of declining state revenue, saying “the state is well-prepared to handle the challenge” of a second straight year of shrinking appropriations.

“There is still room to run government more efficiently,” said Preston Doerflinger, state secretary of finance and director of the Office of Management and Enterprise Services.

Doerflinger said he and chief legislative appropriators, Earl Sears of the House and Clark Jolley of the Senate, are already meeting among themselves and with agency heads to start planning for next session and to find ways to cope with a possible revenue failure during the current fiscal year.

“Our message to agencies this year, and it’s a very clear one, is: ‘Do not bring us your pie-in-the-sky wish lists that you do every year,’” Doerflinger said. “Agencies have a tendency to develop budgets that are not realistic. My job is to be the parent in the room and the grown-up in the room.”

Read the complete story on tulsaworld.com

The 2016 presidential race is beginning in earnest with new candidates entering the crowded field weekly. The Republican Party boasts a host of compelling and well qualified aspirants, many of whom I have known and served with for years. They bring a wealth of experience and policy savvy to a nation sorely in need of a rebound following the many failures of the federal government during the Obama presidency.

Yet despite their numbers, none of them is addressing in a meaningful way the greatest threat to our republic: our gigantic and rapidly growing national debt.  America’s cumulative borrowing is rapidly approaching $20 trillion, while the federal government’s unfunded liabilities (future expenditures minus future tax revenue) now exceed a whopping $127 trillion — better than $1.1 million per taxpayer.

That’s not merely unsustainable; it’s suicidal.

Read the complete story on USAToday.com