The past two weeks at the Capitol demonstrated how our three co-equal branches of government create a balance of power intended by the founders of our constitution.
It’s not the first time in my legislative career that the Governor, the executive branch, has vetoed bills from the House and Senate, the legislative branch. And then in turn, the legislative branch overrode the Governor’s veto. This is how the legislative process is designed to work.
The Legislature passed a number of appropriations bills that supported the overall $7.7 billion state budget. However, the Governor vetoed several of the smaller bills as well as the overall appropriations bill. The Legislature then, by a large majority, 94-4, 95-5, 97-3, and 79-20, overrode his vetoes in order to assure state services continue without deep cuts for the next fiscal year.
According to our constitution, the legislature is required to create a balanced budget based on the numbers given to us by the Governor and the Board of Equalization. Those numbers indicated we had $1.4 billion, or 17 percent, less to appropriate for FY21. However, the legislature was not given any of the details on how those numbers were calculated, or how the $1.3 billion in federal relief funds may be used to help with the FY21 budget.
With all this new information, the legislative budget team crafted a fourth and final budget proposal. By using some of our state’s reserve funds, cutting some one-time expenses and temporarily redirecting non-appropriated money into the budget, we were able to keep cuts to core state services to about 4 percent or less for most agencies and only 2.5 percent to public schools. Considering the alternative, the $7.7 billion state budget for FY21 is only 3 percent less ($237 million) than FY20, and far better than the 17 percent less ($1.4 billion) given to the legislature. The budget preserves the necessary government services for Oklahomans, and is much better than many expected.
The budget prioritizes education, holds funding for the Oklahoma Health Care Authority flat and, through the use of bonds, keeps transportation’s eight-year plan on track and the County Improvements for Roads and Bridges fund intact.
The teacher pay raises are fully protected in the budget and Education is projected to receive more overall funding in FY21 than in FY20 with the addition of the COVID-19 federal relief funds. And to be very clear, the legislature did not take funds from the state pension plans for the budget. Instead, we temporarily redirected to education a small amount of the “off the top” additional payments that we send to the pensions.
We did not touch the corpus of the funds or reduce the benefit in any way to retirees. Employer and employee contributions remain the same, and we are still making additional “off the top” payments to all the pensions. In fact, you might like to know that the Teachers’ Retirement System (TRS) is currently funded at 73 percent from a low of 42 percent just 10 years ago.
The Legislature also is not harming transportation in any way. We are redirecting some transportation funds to education, but we offset that by allowing some bonds for roads projects. In fact, transportation will receive about $4 million additional this year with this change.
I’m also happy to report that the Cost of Living Adjustment (COLA) that was unanimously passed by the House on March 10th is now waiting for the Governor’s signature. The COLA legislation, House Bill 3350, provides for an increase in monthly pension payments of 4 percent for those retired for five years or more as of July 1, 2020, and 2 percent for those retired at least two years.
The pensions are in the best shape they have been in decades. Actuarial analysis showed that a 4 percent COLA would not affect any of the retirement plans’ funding ratio more than 2.9 percent and the plans would continue to improve their upward funding solvency trajectory even after the COLA. This is good news for the pensions’ financial condition, and great news for state retirees who haven’t received an increase since 2008.
In addition to the budget bills, several measures were sent to the Governor for consideration of being signed into law.
The Senate passed House Bill 2777, which increases the penalty for porch pirates who steal mail or packages from homes, businesses or delivery vehicles. This is becoming a serious problem here in Oklahoma and throughout the country. Especially during this recent pandemic, many people ordered groceries, medicine or other necessities online and had them delivered to their home or businesses.
This act would ensure that those who commit theft of these packages would face a misdemeanor for first and second offenses and a felony for three or more offenses. The goal is to thwart such theft.
The Senate also passed House Bill 2905, which promises additional transparency and accountability of the attendance, enrollment, transfer and instruction practices of Oklahoma’s virtual charter schools. We want to make sure that taxpayer dollars are spent in a manner that best benefits our students and helps improve their outcomes and that all public schools have the same reporting measures when it comes to spending public dollars.
On a personal note, we are adjourned to the call of the chair while the Governor has until Thursday to veto any of the measures we passed last week. We will be going back in on Friday just in case we have to practice the “balance of power” again.
Until next time then, I can be reached at Jadine.Nollan@okhouse.gov or at my Capitol office by calling (405) 557-7390. God bless.