LEGISLATIVE UPDATE

LEGISLATIVE UPDATE - MAY 22, 2017

Dear Leaders:

Where to begin? As you have probably seen on the local news and other media sources, the budget talks at the State Capitol are well, a mess. The statutory end to the regular session is this Friday, May 26th, at 5:00 p.m. I suppose who’s right and who’s wrong depends on whom you ask, but some of the facts are clear. The session started with an $878 Million budget shortfall. Democrats proposed a plan in February to cover the shortfall and it would’ve created a few million dollars in new revenue. The Governor’s proposed budget plan would also have covered the revenue shortfall, but proposed significant increases in sales and use taxes - very regressive forms of tax. Leadership of the majority party in both houses have never proposed a clear plan for the state’s budget, and as a result, the legislature is scrambling to negotiate budget language that will pass both houses and be met with approval from the Governor.

We are keeping a close eye on legislation that affects our Legislative Goals. Last week, a bill that would divert the TRS portion of the cigarette and tobacco tax dedicated revenue by 50% passed out of the House JCAB and will be heard by the Senate JCAB next. I know many of you have already contacted legislators in regard to this bill. If you have not yet had an opportunity to call, please let your state senator know that you oppose any legislation that would reduce funding to the Oklahoma Teacher Retirement System! The budget hole should not be filled by taking revenue that is important to securing the long-term health of the system.

(On a side note, not only would this bill take money from the OTRS, it would divert funds dedicated to Trauma Care, the OSU College of Osteopathic Medicine, Medicaid, Mental Health and Substance Abuse, Breast and Cervical Cancer Treatment, the Education Reform Revolving Fund (HB 1017), and the Tobacco Prevention and Cessation Fund. The diverted money would be placed in the General Revenue Fund to address part of the budget shortfall. Legislators may tell you this bill won’t harm TRS—they are banking on additional revenue generated by an increase in the Cigarette and Tobacco tax to more than cover the amount of funds being diverted. BUT THAT IS A SEPARATE BILL, and all part of the volatile budget negotiations.)

The breakdown on the Gross Production Tax increase is complicated, and media doesn’t always present a clear picture of what is happening. A lot is happening “behind the scene” and “behind closed doors.” For example, one source reports that during a meeting on Friday with leadership, the Governor called the CEO of Devon Energy, Larry Nichols, and put him on speaker phone so that he could give his input. Guess I’m a little disappointed she didn’t call the OREA and ask what input 14,000 retired educators would like to give!

I will send out another update tomorrow and one each day this week. Here’s hoping there’s good news.

Sabra Tucker
Executive Director
OREA

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