May 25, 2016
Budget Agreement Signals Friday End to 2016 Legislative Session
The 2016 session, according to legislative leaders, will complete its work on the annual state budget in time for sine die adjournment on Friday. If so, it will be a surprising end to a session that in recent weeks appeared to have no end due to the severe challenges posed by a projected $1.3 billion revenue shortfall for the fiscal year beginning July 1.
Lots of Revenue Manipulation, but No General Tax Increase
Monday of this week, Republican leaders in the House and Senate, as well as Governor Mary Fallin, announced a budget agreement that surprised many. The majority party was able to present a budget plan that will balance revenues and expenditures without the necessity of a general tax increase, such as the much talked about proposed $1.50 per package tax on cigarettes to shore up the state’s health care system.
Some Core Government Functions Protected, Others Not
The budget deal, which is still in the process of gaining Senate and House approval, does not do all that many observers wanted it to do. For example, the new budget will make permanent approximately $300 million in mid-year budget cuts that were made necessary in recent months due to two separate declared revenue failures. Thus, when comparing most state agency budgets in the current year to what they will be next year, most will come up with 5-7% less funding than they were promised for the current fiscal year budget.
Health Care Catastrophe Averted?
Legislative leaders are taking pride in crafting a budget that will protect what they define as core services of state government, namely common education, health care, and corrections. They also seem to be satisfied that, in their view, it was unnecessary to generate $100 million or more in new revenue to secure hundreds of millions of federal dollars to expand or “rebalance” the state’s Medicaid system. The more conservative of the majority Republican Party legislators remained adamantly opposed throughout the session to any plan making it appear the state had relented on its opposition to the Obama Administration’s national health care plan.
Common Schools OK, but Higher Education Ouch!
Much to the chagrin of the higher education community, budget cuts implemented during the current budget year will become permanent, amounting to a loss of nearly 20% in state funding. Many predict increases in college tuition rates to overcome the funding loss.
Lifetime Financial Security for TRS Members Protected
From the perspective of the Oklahoma Retired Educators Association, the 2016 session is a mixture of positives and negatives. On the negative side, the state’s continued dismal economy and unfriendly political climate means that little significant progress was made in securing a long overdue cost-of-living benefits adjustment (COLA) and improvement in the state health insurance subsidy for retired educators. Lawmakers showed little appreciation for OREA efforts to increase the death benefit payable to the beneficiaries of retired educators from $5,000 to $7,500. For a portion of the legislative session, there was some hope that a one-time cash stipend could be paid to certain retired members of the Teachers’ Retirement System based on age and retirement date, but that vanished in the face of the state’s budget crisis.
On the positive side, OREA, with the help of hundreds of activist members, successfully lobbied throughout the session against any diversion of state revenues dedicated to the support of the Teachers’ Retirement System, preserving approximately $300 million per year vital to improving the system’s funding level. OREA stood guard also against any efforts to alter the TRS defined benefit plan design or attack the independence of the TRS Board of Trustees. While preserving what has been earned by previous generations of retired educators may be unimpressive to some, OREA sees it differently. Thanks to the work of OREA professional lobbyists and members, lifetime financial security remains a fundamental feature of our retirement system.
Learn from the Past, Move on to Great Possibilities!
As the 2016 legislative session draws to a close, OREA looks forward to applying lessons learned to our preparations for the 2017 session. We sincerely appreciate the involvement of hundreds of OREA members in recent months in support of our legislative agenda. Adversity will face us again in 2017, but we’re determined to change great challenges into great possibilities.
Cast a Wise Vote this Election Cycle
Have you been studying the candidates running for the state legislature this year? How do they stand on retired educator issues? Look for information about legislative candidates in future OREA publications.