Lilly Ledbetter with President Obama

Lilly Ledbetter, the inspiration for the Lilly Ledbetter Fair Pay Act of 2009, will present a free, public lecture at the University of Oklahoma on March 8, 2012 at 7:00 p.m. in the Gaylord Hall Ethics and Excellence in Journalism Foundation Auditorium, 395 W. Lindsey St.

Ledbetter served as a manager at the Goodyear Tire and Rubber Plant in Gadsden, Alabama for almost twenty years. Despite receiving the top performance award, she consistently received less pay than virtually all of her male co-workers. She sued and won a juryverdict of $3 million, which was overturned in a landmark Supreme Court case.

Recognizing the injustice of her situation, a campaign was started to pass a law that ensures that other victims of pay discrimination have more than 180 days after their first discriminatory paycheck to file a complaint. While she herself has seen no monetary awards, Ms. Ledbetter was honored to see that Congress passed and President Obama signed the Lilly Ledbetter Fair Pay Act into law on January 29, 2009.

For more information about the event, please email the Center for Social Justice at center.for.social.justice@ou.edu or call (405) 325-5787.

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that a legislative task force on the new federal health care law called for establishing a state-run health exchange. See the committee’s full report here. The committee did not say how the state exchange would be paid for. OK Policy previously explained why we may have already waited too long to avoid a federal takeover.

A House committee approved a bill to eliminate the state agency charged with enforcing Oklahoma’s pet breeding laws. The Tulsa U.S. postal center, which employs 600 people, is set to close and could begin winding down operations as soon as May. The superintendent of the OKC School District and the city’s school board president announced they would fight any takeover of struggling schools by state officials. The OK Policy Blog assessed the situation of Oklahoma schools after three straight years of budget cuts. The director of a Tulsa Medicaid provider explained how most public sector spending flows back into the community.

The Tulsa World explains why bills requiring drug-testing of TANF recipients are not in the state’s best interest. Kurt Hochenauer shows that these bills rely on false stereotypes about welfare recipients. Ethics Daily spoke with OK Policy for a story on how Payday lenders enslave the poor in a debt cycle. State Rep. Mike Christian’s said he wanted to question House staff under oath to determine whether they tried to intimidate judges in his workers’ compensation case.

The Number of the Day is the percentage of public school teachers in Oklahoma who are men. In today’s Policy Note, a study of unauthorized immigrants in Oklahoma City shows that restrictive laws have not caused immigrants to self-deport.

» continue reading In The Know: Committee calls for Oklahoma insurance exchange

After three straight years of budget cuts, funding for public education in Oklahoma is in dire straits.  This year’s appropriation to the Department of Education is $254 million, or 10.0 percent, less than it was in 2009.  In the past three years, funding to school districts through the state aid formula, which funds the basic operating costs of schools, has been slashed by $222 million, while public schools enrollment has grown by 22,000 students.  According to the most recent data, the number of teachers was cut by over 1,000 between 2010 and 2011, and this year it is likely there are fewer teachers still. Even though schools have tried to manage cuts while protecting class sizes, simple math dictates that more students and fewer teachers is leading to more kids per class.

Meanwhile, the Legislature has also cut the activities budget for common education, which funds health care costs for teachers and support staff, as well as a portion of retirement costs and programs that aim to improve teacher quality and student performance. This year,  the Department of Education was forced to eliminate or drastically cut a slew of programs, including adult education, alternative education, Great Expectations, A+ Schools, and Literacy First. With its activities budget slashed, the department also opted not to allocate $11.4 million to fund the $5,000 annual bonus promised to some 3,300 National Board Certified teachers and saved $37 million by funding only ten months of teacher and support staff health care benefits for current year contracts. Outrage in the education community over this failure to meet the state’s commitments on health care costs and board certified teachers led some elected officials to promise to make up the funding as mid-year supplementals to this year’s budget.

» continue reading Stuck in a Hole: What flat funding means for the common education budget

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that a Senate committee voted to limit payouts to the oil and gas industry to $150 million, though tax breaks deferred over the past three years would entitle them to twice as much. OK Policy previously explained how Oklahoma ended up on the hook to oil and gas producers. A House panel rejected a bill to require prescriptions for pseudoephedrine, and approved a bill that would allow cities to ban smoking in public places.

The OK Policy blog provided an update on how state budget cuts are endangering child welfare, public safety, education, and other core services needed for Oklahoma’s prosperity. Meanwhile, Gov. Fallin said a slight increase in revenue should go to more tax cuts. Fallin’s tax plan will go to the legislature next week, and a Senate panel OK’d two others.

Urban Tulsa Weekly reports on how Oklahoma is underfunding mental health and spending more on prisons. A bill that would allow creationism and climate science denial in public school science classrooms passed a House committee. StateImpact Oklahoma finds that education is the most common Master’s degree awarded by state universities.

The Number of the Day is the amount in annual Social Security benefits paid to Oklahomans in 2009. In today’s Policy Note, the New York Times reports on how Indian reservations have grappled for years with high crime rates, but the Justice Department files charges in only about half of murder investigations and turns down nearly two-thirds of sexual assault cases.

» continue reading In The Know: Senate panel votes to limit payouts to oil and gas industry

Even as the economy recovers, it’s become increasingly apparent that there is no end in sight to Oklahoma’s budget woes. Oklahoma has seen three straight years of budget cuts, and according to one House leader, we may be in for a fourth. At best, this year’s budget will stay flat, which means we can accomplish less due to inflation, reductions in federal assistance, and continued deterioration of equipment and infrastructure that we can’t afford to fix. It also means the damage caused by previous cuts will continue unchecked.

We provided overviews on previous rounds of budget cuts here, here, and here. This is an update on a few more of the ways we’re falling behind in public safety, child welfare, education, health, and other areas:

Public Safety

• The number of state troopers on Oklahoma highways is at its lowest level in 22 years. Without funds to train new troopers, the problem is likely to get worse because more than 1/4th of existing troopers are already eligible for retirement.
• The Oklahoma State Bureau of Investigation has frozen hiring with 35 vacant jobs, and Director Stan Florence said further cuts would lead to furloughs. Inadequate staff has forced the agency to reduce investigations of the theft of equipment from oil and gas fields and curtail other investigative work.

  » continue reading How Oklahoma is falling behind

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that a bill to reinstate the “don’t ask, don’t tell” policy in the Oklahoma National Guard has been effectively shelved. A bill to require drug tests for TANF recipients passed a House subcommittee. TANF currently helps support about 5,000 adults and 20,000 children in Oklahoma. In 2009 OK Policy wrote about why a previous version of this measure is unnecessary, expensive, and counterproductive.

A second study has further debunked a report being relied on by those wanting to abolish the income tax. A new OK Policy fact sheet summarizes the numerous flaws in this report, which produced by Arthur Laffer and the Oklahoma Council of Public Affairs. Find more on the income tax debate at our tax reform information page.

The OKC School Board expressed frustration that they are still unclear about many specifics of a plan by the State Department of Education to identify and possibly take over failing schools. A Senate panel passed a measure that would increase the units of math required to graduate high school. Oklahoma is running out of a drug it uses to execute inmates, leaving the state looking at options to put people to death for capital crimes.

The Number of the Day is the amount of income for married couples that is not taxed in Oklahoma because of the standard deduction. OK Policy previously corrected false claims that Oklahomans’ first dollar of income is taxed. In today’s Policy Note, Governing reports that prison populations in the U.S. have declined for the first time in nearly four decades.

» continue reading In The Know: Speaker derails bill targeting gays in the National Guard

The push to eliminate Oklahoma’s personal income tax relies heavily for intellectual support on a study done for the Oklahoma Council of Public Affairs by economist Arthur Laffer and his colleagues. The Laffer report makes two claims: (1) that states without an income tax enjoy stronger economic growth, and (2) that abolishing the income tax would boost Oklahoma’s economy to such a great extent that the state would recapture a major share of lost revenue and not have to slash core services. Last week, we reported on a study from the Institute on Taxation and Economic Policy (ITEP) showing that when more accurate indicators of economic growth are used, states without an income tax are doing no better than other states, including Oklahoma. A follow-up ITEP study now reveals that Laffer’s second claim regarding the economic growth that will result from eliminating the income tax is equally dubious. Together, the debunking of its two main economic arguments leaves the OCPA proposal tottering.

Laffer claims that by phasing out the income tax, which takes less than 4 percent of most Oklahomans’ income, Oklahoma’s annual personal income growth rate  would more than double, while 312,000 more jobs would be created than if tax rates remain unchanged. Although intuitively dubious, Laffer’s calculations are derived from a regression analysis that is based on tax rates and personal income for all 50 states from the years 2001 to 2008. However, when ITEP went in to duplicate the analysis, they discovered that Laffer chose to measure each state’s tax rate by combining the top marginal state and federal tax rate in each state. This decision to include federal tax rates in a study of state tax policy had a decisive impact on the findings. ITEP writes:

Since the goal of the regression is to show how state tax rates affect economic growth, it’s hard to see why Laffer et al. would muddy the waters by measuring the combined federal and state tax rate—that is, until you see how that choice affects their results. As noted, the Laffer regression finds a “negative and highly significant” relationship between the combined federal/state tax rate in a given state and economic growth over the 2001-2008 period—but that relationship actually becomes positive and insignificant when the model is corrected to include only variation in state tax rates [emphasis added]. Put another way, when the noise created by changes in federal tax rates is removed, it becomes obvious that differences in state tax rates are not driving the economic predictions made by Laffer.

Laffer’s regression is also fundamentally flawed in failing to make any effort to measure the impact of other factors that might affect economic growth, from coastlines and climate to natural resources. They point out that a 2011 study by James Alm and Janet Rogers that tests the impact of more than 130 variables explaining state economic growth and finds” no significant impact of state income taxes.”

Without this flawed regression analysis, there is not even the semblance of an argument left to support the idea that eliminating the income tax will spark the miraculous economic benefits that Laffer claims, or that growth will generate sufficient revenues from other state taxes to provide for a basic level of funding for schools, roads and bridges, public safety and retirement benefits. The flimsy intellectual edifice on which this proposal to abolish the income tax has been constructed has been left without a leg to stand on. Over the coming months, it remains to be seen whether the scheme comes crashing down or can manage to stay afloat based on pure political calculations.

For a one-page fact sheet summarizing major flaws in the Laffer report, click here.

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

Today you should know that Gov. Fallin’s tax plan would wipe out $888 million worth of deductions and exemptions, including itemized deductions, personal exemptions and adjustments for Social Security, military pay and retirement income, and  payments made to survivors after military members are killed in action. Rep. Jeff Hickman said falling natural gas prices means agencies should expect more budget cuts this year, and he is hoping for a “Plan C” on income tax reduction that would be paid for. OK Policy prepared a document comparing the major tax cut proposals made so far.

With payouts to oil and gas companies discovered to be $150 million more than was anticipated, the OK Policy Blog re-ran a blog post from 2010 explaining how we ended up on the hook.  Sand Springs educators say Oklahoma’s high school dropout rate will increase 10 percent this year due to a law requiring students to pass an additional battery of tests to graduate. Since 2008, the number of available foster care homes has fallen by 25 percent.

Terri White, Director of the Oklahoma Department of Mental Health and Substance Abuse Services, spoked with NewsOK about the many mental health issues going untreated in Oklahoma. Rep. Randy Terrill announced he is running for County Commissioner. A 5 cent bottle-deposit bill to promote recycling has been withdrawn after opposition from the beverage industry. A Senate committee dropped a bill to require a prescription for pseudoephedrine.

The Number of the Day is the percentage decline in government spending at all levels in the United States in 2011—the biggest drop since 1971. In today’s Policy Note, economist Nancy Folbre points out that our discussion of taxes and public spending at one point in time often leaves out the benefits all Americans receive over their entire lifetime.

» continue reading In The Know: Fallin tax plan wipes out deductions for Social Security, retirement

NOTE: This week, Oklahomans learned the state was on the hook to pay oil and gas producers $294 million over the next three years in deferred tax rebates for horizontal and deep well drilling in 2010 and 2011, an amount almost $150 million more than initially anticipated. The deferred payments came about as a result of legislation, HB 2432, passed in 2010 that provided several concessions to the oil and gas industry in how horizontal and deep well drilling is taxed. Here is the blog post we ran at that time explaining HB 2432 and expressing our concern about the potential costs of tax breaks to the industry. It has been edited to revise one error in the initial post and to link to an updated fact sheet.

In their efforts to find additional revenues for the upcoming budget year, legislative leaders and Governor Henry took some strong and politically risky steps to suspend tax credits for various forms of economic activity. But when it came to tax incentives for the oil and gas industry, expected to amount to some $150 million in FY ’11 and FY ’12, it was the industry that seemed to have the upper hand. HB 2432, which passed in the final days of session, allowed the state temporarily to defer incentive payments to oil and gas producers – but only in return for some permanent and questionable concessions to the industry.

Under HB 2432, approved as part of the FY ’11 budget agreement, payment of the rebates owed for horizontally drilled and deep wells produced in Fiscal Years 2010 and 2011 will be deferred until July 1, 2012 and then paid out in monthly installments over the next 36 months. The state will be assessed interest at nine percent on any payment that is not made by the end of the month it is due. This does not involve a moratorium or suspension of these tax rebates – just a deferral in payments. This procedure made available an additional $85 million for appropriation in FY ’11 that would otherwise have been paid out in rebates.

In return for this one-time deferral of their rebates, the oil and gas industry extracted three significant changes to the system of tax breaks for production (see this fact sheet for a detailed explanation of the current system). First, beginning in FY ’13, drilling incentives for horizontally drilled and deep wells will be paid out as front-end credits, rather than as rebates that are applied for and refunded after the end of the year. This switch will involve a one-time cost to the state in the crossover years from back-end to front-end payments that is projected by the Tax Commission to be $65 million. It also precludes any future attempt to defer incentive payments.

Secondly, the law changes how horizontally drilled and deep wells are taxed. Under HB 2432, beginning in 2011, deep wells drilled below 15,000 feet will be taxed at 4 percent (compared to 1 percent currently), but the current cap limiting total incentives for deep well drilling to $25 million per year will be abolished. For horizontally drilled wells, HB 2432 strikes the language in current law that makes producers eligible for incentives only until project payback has been completed.

Finally, for other forms of drilling, in which incentives are subject to a price trigger, HB 2432 indexes the trigger to an annual inflation-based increase. Currently, incentives can be claimed for oil production only in years when the average price is below $30 per barrel or for gas production in years when the average price is below $5.00 per MCF; this floor will rise based on the Consumer Price Index.

We fully appreciate the important of the energy industry for Oklahoma’s economy. But this deal leaves us with a pair of troubling questions. The first is, at a time when budgets for almost all government functions are sustaining deep and enduring cuts, does it make sense to extend additional tax breaks for oil and gas producers? While the switch in how deep well drilling is taxed is purported to be revenue-neutral, the lifting of the project payback limit on rebates for horizontally drilled wells is expected to reduce taxes by an additional $13 million. This is on top of the approximately $60 million in gross production tax breaks already going to horizontal drilling, along with oil and gas depletion allowances and other tax benefits. Rather than provide unlimited credits, we should be looking to limit the state’s fiscal exposure and provide greater budget certainty by establishing reasonable caps on the total amounts of credits that can be claimed by producers.

The second question relates to how HB 2432 exacerbates a system where certain forms of production, dominated by large producers, are subsidized regardless of the price of oil and gas. When natural gas is at $3.50 per MCF, tax rebates or credits may, perhaps, make the difference in the decision to drill a well. But should production be fully exempted (in the case of horizontally drilled wells) or partially exempted (in the case of deep well) even  from gross production taxes when gas is at $8.00 per MCF? What about $15.00 per MCF?  The additional concessions granted to these producers by HB 2432 only strengthens the perception that when it comes to the subsidy system for oil and gas drilling, policies are being driven not by geology or economics, but rather politics.

What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week we posted a new report debunking highly misleading analysis that phasing-out the state income tax would spur economic growth.  Our work was cited in a StateImpact OK article on the state’s tax reform debate.  We announced that Megan Williams Benn has joined our team as an outreach coordinator leading our work to protect our tax base and ensure adequate funding of public services.

Also this week, we corrected a false claim about Oklahoma’s tax system that has been repeated by Governor Fallin and the state’s major newspapers.  An overview of bills filed this legislative session revealed the session looks better for immigrants but worse for the poor.

Our director, David Blatt, spoke at a town hall meeting in Oklahoma City on the economic impact of public health epidemics to the state.  Finally, two upcoming events in March in Tulsa and Oklahoma City will explore the racial wealth gap in Oklahoma.

Numbers of the Day

• 1 – Number of people who die on average each day in Oklahoma from an injury inflicted by a firearm.
• 1,934 – Number of House and Senate bills filed for the 2012 session of the 53rd Oklahoma Legislature, compared to 2,137 bills filed for the 2011 session.
• 5.2 – Number of children out of every 1,000 who entered the foster care system in Oklahoma in 2009, compared to 3.4 children nationally and 10th most in the country.
• 2018 – The year by which Oklahoma is expected to have the highest obesity rate in the nation.
• 70,800 – Number of Oklahomans employed in construction in July 2011, up 6 percent from the previous year.

In The Know, Policy Notes

• The Institute on Taxation and Economic Policy explains why Arthur Laffer’s claim that n0-income tax states are doing better than other states is junk economics.
• The Thomas B. Fordham Institute gave Oklahoma an ‘F’ for public school science curriculum standards, writing that they “could not have been written—or vetted—by anyone with a working knowledge of the natural world.”
• David Cay Johnston corrects three big lies about America’s tax system.
• The New York Times reports on how even critics of the safety net increasingly depend on it.
• Economic Policy Institute reports that the unemployment rate for African Americans and Latinos in the United States is still devastatingly high and in double-digits in most states.

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

The Oklahoma Tax Commission revealed that a tax break for the oil and gas industry will cost more than originally planned, leaving Oklahoma with a $48 million hole in next year’s budget.  Oklahoma Attorney General Scott Pruitt asked the state Supreme Court to decide the rights of two Oklahoma tribes to water in their territories.  There was an altercation between two lawmakers yesterday on the House floor.

An Oklahoma Senate committee defeated a proposal to restrict pseudoephedrine sales.  StateImpact OK details the past, present, and future of wind energy in Oklahoma.  Senator James Inhofe filed a joint resolution of disapproval against a new rule to limit mercury emissions and air toxins from power plants.

A group of family health clinics is expanding their telemedicine network for behavioral health to better serve rural Oklahomans.  Oklahoma tech schools and community colleges awarded the most certificates last year in the family, consumer, and health fields.  The Classen Schools of Advanced Studies in Oklahoma City is asking parents to pitch in to repair ceiling tiles, light fixtures, sidewalks made of plywood, and a dirt parking lot.

High unemployment and poverty persist in the tiny historically black town of Boley.  Two events in March in Tulsa and Oklahoma City will explore the racial wealth gap in Oklahoma.  Today’s Number of the Day is the number of Oklahomans employed in construction in 2011.  In today’s Policy Note, Economic Policy Institute reports that the unemployment rate for African Americans and Latinos in the United States is still devastatingly high and in double-digits in most states.

» continue reading In The Know: Oil & gas tax break underestimated; $48 million hole in budget

Closing the Gap: Race, Wealth, and Homeownership in Oklahoma

March 14th | Oklahoma City | 7pm

March 15th | Tulsa | 7pm 

You’re invited to attend an evening of presentations and discussion on race, wealth, and homeownership.

As Oklahoma inches out of the Great Recession, our economic future is bright but uncertain.  The most vulnerable among us – low-income people and residents of low-income neighborhoods – were hit first and worst by the housing crisis and subsequent recession, exacerbating long-standing disparities in wealth and asset-ownership.  Recovering from economic turmoil in the face of major demographic changes requires a new growth model that will bring Oklahoma closer to the ideal of American prosperity.  These lectures will begin a conversation among public and private sector leaders about investments that allow all Oklahomans to maximize their potential.  Recent research points to higher concentrations of subprime lending and foreclosures among communities of color, persistent discriminatory lending practices, and deeply entrenched gaps in wealth, income, and employment between white and nonwhite Oklahomans.

I. The Housing Crisis in Oklahoma:  How Bad Was It?

Dr. Angela Gobar, Director of Human Capital Development at Jackson State University
An analysis of subprime lending and foreclosures with an emphasis on communities of color.

II. The Widening Racial Wealth Gap

Kate Richey, Policy Analyst with the Oklahoma Policy Institute will present data and analysis on the racial wealth gap in Oklahoma – from home and business ownership to savings, investments, and other assets vital to long-term financial security.

Click here to RSVP or

Call 918-794-3944 or

Email krichey@okpolicy.org