Weekly Opinon Editorial

THIMBLERIG!
by Steve Fair

Oklahoma Speaker of the House Kris Steele, (R-Shawnee) and Governor Fallin both addressed Oklahoma’s state personal income tax in separate interviews last week. Steele told Capitalbeatok.com that further income tax rate reductions are possible. “We are having some very significant discussions on how we can systematically and methodically begin to reduce our personal income tax in the state of Oklahoma. We think it’s really important. It’s really the next major policy issue that needs to be addressed to really help Oklahoma reach its potential in the area of creating an environment within our state that is conducive to job growth, job creation and job enhancement.” Steele said.
*****
Fallin told The Oklahoman she would favor gradually reducing the state’s personal income tax. “Our goal of reducing the income tax is to make us more competitive, but not to starve state government from the standpoint of starving essential state services for our citizens.” Fallin identified transportation, public safety, health and human services and education as core services.
*****
Last year, the Oklahoma state budget was 6.43 billion dollars. Education received 3.4 billion; Health and Human services 1.9 billion, Public Safety 629 million and Transportation received 208 million. That means that Fallin identified about 90% of the current state budget as essential core services. That seems a little high. There is no doubt some of those ‘core’ services should be ‘peeled’ back some.
*****
Currently personal income tax provides about fourteen (14) percent of the revenue Oklahoma state government receives. It is entirely feasible for Oklahoma state government to do without fourteen percent of what they currently get from taxpayers, but based on the nature of government it’s highly unlikely. Until Oklahoma state government gets serious about operating on substantially less money, then this talk of eliminating the income tax is nothing but thimblerig.
*****
Thimblerig, three shells and a pea or ‘the old army game’ is often sold as a gambling game, but in reality it is a con trick. A shell man begins the game by placing the pea under one of the shells and then quickly shuffles the shells around. Once the shuffling, is completed, he takes bets under which shell the pea lies. A good ‘operator’ usually has the pea palmed and so the pea is not under any of the shells.
*****
Politicians are masters of the shell game. They tend to hide the pea (taxes) and it’s the next to impossible task of the taxpayer to find out where it is hidden. Like thimblerig, it’s next to impossible to detect the location of ‘eliminated’ taxes once government starts shuffling the shells, but they always show up.
*****
The third law of Steve Fair’s laws of taxation states that forces occur in pairs. Every action is accompanied by a reaction of equal magnitude. Government never eliminates a tax- it is shifted. Government never downsizes- it grows. My apologies to Newton.

*****
When Art Laffer, of the Laffer Curve fame, came to Oklahoma last month and advocated elimination of the income tax, state leadership embraced it. Lafler rightly stated elimination of the state income tax would grow private business and help Oklahoma grow. But until Oklahoma leadership commits to downsizing state government in conjunction with the elimination of the state income tax, then this exercise is nothing more than thimblerig.
*****
Steele made a revealing statement during his interview. He said state revenues will increase between seven and ten percent in the coming year. But he says that still means the state budget will stay about the same. “We utilized a lot of one-time monies over the past two years to balance our state budget. There were federal stimulus monies and rainy day funds that will not be there in the next go-round. We are probably looking at a stand-still budget,” Steele said.

*****
Oklahoma government doesn’t need a standstill budget; it needs a significantly smaller state budget. We need leaders who will tell bureaucrats in state agencies ‘no’ to standstill budgets. We need leaders who will force agencies to slash their budgets to the bare minimum. We need leaders who can think outside the shell.

Weekly Opinion Editorial

LOSING IS A BLESSING!
by Steve Fair

On Friday, USA Today reported nine states will share $500 million in federal grant money won in a high profile competition intended to jumpstart improvements in early childhood programs. The money is part of the Obama administration's cornerstone education initiative, ‘Race to the Top’ which had states competing for federal dollars to create programs that make schools more effective. Last year, Race to the Top handed out $4 billion in grants focused on K-12 education. Oklahoma education leaders requested $60 million of federal funds
*****
The goal of this year’s competition was to get more children from birth to age 5 ready for kindergarten. Because Oklahoma has a solid record in early childhood programs, Governor Mary Fallin and State Superintendent Janet Barresi were confident the Sooner state would win, but Oklahoma was not one of the nine states. The Sooner state finished a dismal #30 out of 37.

*****

In May when the program was announced in D.C., Tulsan George Kaiser, a major supporter and contributor of President Obama, shared the stage with Education Secretary Arne Duncan and Health and Human Services Secretary Kathleen Sebelius and emphasized Oklahoma had done an excellent job in early childhood development. Kaiser’s involvement is probably why Oklahoma leaders were confident they would win, but instead California, Delaware, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Rhode Island and Washington were the nine states. All just happen to have Democrat governors- just a coincidence I’m sure.

*****

Gov. Mary Fallin and State Superintendent Janet Barresi expressed disappointment in not being awarded the grant. “Despite today's news, Oklahoma remains a leader in the field of early learning. With over 70 percent of our 4-year-olds participating in some form of early learning program, it will continue to be important to develop and improve our prekindergarten services,’’ Fallin said.
*****
Barresi said, “I join Gov. Fallin in a shared commitment to continue to find ways to boost learning opportunities for Oklahoma preschoolers, especially for those living in poverty. Our reforms depend a great deal on academic success in the early grades.’’ Barresi said the state must ‘redouble’ its efforts to ensure its children are ready to learn when they enter kindergarten.
*****
First, is it the responsibility of government to insure that children are ‘prepared’ to enter kindergarten? Obviously Fallin, Barresi and Kaiser believe educating children from the cradle is a function of government. So does former Oklahoma first lady Kim Henry. Henry, executive director of Sarkeys Foundation, says, “There is no disputing that parents are the best educators for their young children. But just as indisputable is the fact that many parents are not equipped for the job. In my 10 years as a teacher, I saw firsthand that the kids who stood to benefit most from early learning were the ones who faced a host of disadvantages.” While Henry, Barrei and others may be sincere and truly want to help out parents who need help, it isn’t the responsibility of government to prepare children for kindergarten? That is exclusively the role of the parent.

*****
Second, isn’t it fiscally irresponsible to accept federal tax dollars that include a multitude of ‘strings’ and conditions no matter how just the cause? With the overreaching, ever expanding federal government it doesn’t seem very wise for Oklahoma state leaders to embrace any federal program that expands the reach of government. What is particularly disappointing is when Republican elected officials run on a platform of fiscal responsibility and then line up at the federal government trough immediately being elected. It is little wonder Oklahoma citizens are confused and see little difference in the two parties.

*****
Losing the ‘Race to the Top’ grant is an early Christmas present for Oklahoma. Oklahoma government leaders need to be helping ‘families’ by reducing the size of government, building and maintaining our infrastructure –road and bridges-, creating a better environment for businesses to operate and reducing the individual tax burden. That is the proper role for government, not trying to get kids out of the home as soon as they are born.
*****
Robert Frost was an American poet. He is highly regarded for his realistic depictions of rural life. Frost said, “You don't have to deserve your mother's love. You have to deserve your father's. He is more particular.... The father is always a Republican towards his son, and his mother's always a Democrat. “
*****

Merry Christmas!

For other articles on this subject, clink on

USA TODAY

http://www.usatoday.com/news/education/story/2011-12-16/race-to-the-top-winners/52005184/1

CAPITAL BEAT OKLAHOMA

http://capitolbeatok.com/_webapp_4106279/Fallin_finds_Obama_grant_decision_%E2%80%9Cdisappointing%E2%80%9D_%E2%80%93_Superintendent_Barresi_presses_for_more_spending,_board_edges_forward_on_evaluation_model

Weekly Opinion Editorial

HOW TO BE A DELEGATE!
by Steve Fair

Last week five(5) Democrats and seven(7) Republicans filed to be on Oklahoma’s presidential primary ballot March 6, 2012. The seven GOP candidates are the ones you would expect, but only one of the Democrats is a household name- President Obama. You can see the entire list of presidential candidates at http://www.ok.gov/elections/support/ppp_filing.pdf
*****
The presidential primary is used in Oklahoma to allocate delegates to the two major parties presidential nominating conventions. Fifteen states use a causus system to select their delegates, which is different from a primary. A caucus is a system of local gatherings where voters decide which candidate to support and select delegates for nominating conventions. A primary is a statewide voting process in which voters cast secret ballots for their preferred candidates and the parties use those results to commit delegates. There are advantages to both. Caucus systems tend to attract people who are more engaged and knowledgeable in the political process. Primaries often are won by the candidate with the biggest media spend. There has been an active movement in the Oklahoma GOP to go to a caucus system, which I have opposed. We (the GOP) should be about the business of educating not excluding the general public on issues and candidates. The issue has been soundly defeated at our last two state conventions.

*****
I am unsure how Oklahoma Democrats select the delegates to their national convention, but the Oklahoma Republican Party uses the following process.
*****
Oklahoma has 43 delegates to the 2012 National GOP convention in Tampa, more than New Hampshire and Iowa combined- they total 40. The Sooner state delegation is the nineteenth largest at the convention. Three of Oklahoma’s delegates are unpledged- the members of the Republican National Committee. Fifteen(15) of the state’s national delegates are elected at the five congressional district conventions(3 each) held before the state convention. The remaining twenty five(25) delegates are elected at the state GOP convention May 12, 2012 in Norman. Delegates, who are most often elected officials or political activists, pay their own expenses to the national convention. The competition to become a GOP national delegate is often fierce.
*****
Delegates don’t get to just freelance and vote for whomever they want. Oklahoma Republican Party rules require national delegates to sign a pledge they will vote in accordance with the party rules and state law. A delegate is an elected representative who is to vote based on the results of the presidential primary held on March 6th.
*****
In years past, Oklahoma was a ‘winner take all’ state which meant that a Republican candidate could win a plurity of the vote in the presidential primary and take all the delegates. Earlier this year, the Oklahoma Republican state committee voted to allocate national delegates in 2012 on a ‘proportionate’ basis, meaning that more than one candidate could have national delegates from Oklahoma. Several other states switched from ‘winner take all’ to proportionate allocation of delegates which changes the dynamatics of the nominating process.
*****
With all the hype in the national media, you would think the race to the GOP nomination will be over by the time Oklahomans get to vote in March, but that is highly unlikely. In order to win the Republican nomination, a candidate must have 1,145 delegates. The earliest a candidate could hit that number is March 6th when eleven states vote and select 556 national delegates. The first three causas/primaries are Iowa, New Hampshire and South Carolina. Only 65 national delegates will be chosen in those states. The real test will be on January 31st in Florida when 99 delegates are chosen. It is highly likely the GOP nomination process will be drawn out well into April of 2012.

*****
Want to be a delegate representative to the Republican National Convention? Any registered Republican in the state is eligible. The best place to start is by attending your precinct meeting on Monday February 6th and the County GOP Convention in March. District Conventions, where delegates are actually elected, will be held in April and the State GOP convention is in May. Being a part of the presidential nominating process is educational and fun, but it also carries a burden of responsibility. GOP Delegates in Oklahoma represent 850,000 fellow Republicans across the state.

Gingrich as Manager

What Newt’s tenure as a House Republican leader says about his ability to lead an organization.

By Major Garrett

http://www.nationaljournal.com/magazine/gingrich-as-manager-20111208

RUN TOM RUN- FAVORITE SON!

My friend and fellow blogger Michael Bates of Batesline has an open letter to Senator Coburn urging him to run for President as Oklahoma's 'favorite son.' I second the idea. Coburn is exactly what conservatives are looking for- a principled man unwilling to compromise his convictions. You can read the letter at: http://www.batesline.com/

3 REASONS TO NOT VOTE FOR NEWT!

by Steve Fair

#1: HIS MORALITY! Or lack there of. Newt is on his third wife. He cheated on his first wife and told her he was leaving her while she was in the hospital being treated for cancer. He had proposed to his second wife even before telling his first wife he wanted a divorce. He then cheated on his second wife and proposed to his THIRD wife even before telling his second wife he wanted a divorce. No word on whether he honeymooned at the beach with his two new wives like most Newt aquatic lizards. Newt did all this while writing books and making speeches about ‘family values.’ Newt blames his infidelity to multiple wives on his ‘passion’ for the country.

#2: HIS IDEOLOGY! In December 2008, Newt was paid $300K by Freddy Mac to lobby Congress to not step up regulation or scrutiny. In 1979, when fellow Georgian Jimmy Carter was in the White House, Newt voted to expand the role of the federal government into education with the creation of the Federal Department of Education. In April 2008, Newt made a commercial with then U.S. Speaker of the House Nancy Pelosi on Climate Change. He advocates a ‘pathway to citizenship for illegal aliens.’ During one 2011 debate he said he would issue up to 200 “executive orders’ his first day as President, a clear violation of the US Constitution.

#3: HIS THEOLOGY! Gingrich often begins his remarks by quoting the Declaration of Independence's premise that men "are endowed by their Creator with certain unalienable rights". When you listen to him, you would think he was a very spiritual man and that spiritual things were important to him but that is not the case. It is very apparent Newt doesn’t know the Creator in the free pardon of sin. He fails the ‘fruit of the spirit’ test. Newt was raised a Lutheran, converted to Southern Baptist while at Tulane and then converted to Catholicism, his current wife’s faith, on March 29, 2009. He said he did it because he saw 'happiness' in the Pope's face. Newt has written a book entitled, "Rediscovering God in America." Newt’s message of “Exceptionalism’ is unscriptural and heretical. It fails to recognize the fundamental principle that man is a fallen creature who needs regeneration- even men in the United States.

Newt is a complete pragmatist who was an ineffective leader when he was Speaker of the House. There is no doubt Newt is an intelligent person, but he lacks wisdom. Senator Coburn said in his book, “Breach of Trust,” that Gingrich lacked the courage and character to lead effectively. There is no doubt Newt has good ideas and can analyze the situation as well as anyone, but he is no conservative. We do not need Neutron Newt!

*****

A newt is a member of the salamander family. Adult newts have lizard-like bodies and may be either fully aquatic, living permanently in the water, or semi-aquatic, living terrestrially but returning to the water each year to breed. A red spotted newt has a bright orange color to warn predators of its highly toxic skin.

Weekly Opinion Editorial

GRADED ON THE CURVE!
by Steve Fair

Will Rogers said about taxation: “If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don’t get wet you can keep” Oklahoma taxpayers need to start leaving their money on the bank according to Art Laffer, a former Reagan economic advisor. Laffer spoke in Oklahoma City last week and encouraged the state legislature to look at eliminating the state’s personal income tax over the next ten (10) years. He said that “no matter how you slice it, states without income taxes perform better than those with an income tax.”

*****
In conjunction with Laffer’s appearance, the Oklahoma Council of Public Affairs, a conservative think tank, released a report on Oklahoma’s state income tax prepared by econometrics firm Arduin, Laffer & Moore, of which Dr. Laffer is a co-founder. The report estimated the average Oklahoma family of four would see a savings of more than $1,300 a year if the individual income tax were phased out. You can read the entire report at http://ocpathink.org/articles/1598

*****
According to Taxfoundation.org, Oklahoma's state and local tax burden is currently estimated at 8.7% of income (37th nationally). That is below the national average of 9.8%. Oklahoma taxpayers pay $3,259 per capita in state and local taxes.

*****
Laffer was quick to point out that Texas doesn’t have a state income tax. “When you're looking at your neighbors down to the south,” Laffer said “how do you compete with them? You're not competing with them.”
*****

Not everyone agrees with Laffer about supply side economics and the elimination of the state income tax. The Oklahoma Policy Institute published an issue brief entitled, “The Case for the Income Tax,’ which lists eight reasons why the state should not eliminate the state income tax. The first reason is that the tax provides nearly one third of the state’s income. They write, “The state could not provide basic, essential services without income tax revenue unless other taxes were drastically increased.” You can read the entire brief at http://www.okpolicy.org/files/TheCaseForTheIncomeTax.pdf
*****
Republican State Treasurer Ken Miller, an economics professor and former state House budget chair, appears to agree and says state lawmakers should proceed with caution. “We have to have a conversation based on facts and not ideology,” Miller said. . “I don't think you can take your single largest source of revenue and eliminate it and not replace it,” he said.
*****
I disagree! The state can afford to eliminate the income tax and here is why:
*****
First, Oklahoma state government already gets too much of our hard earned money. The state budget has grown 16% in the past ten (10) years to over 6.5 billion annually. The tax money state government collects is often spent inefficiently and irresponsibly. Not sending the government money appears to be the only solution to stopping overspending. Eliminating a substantial amount of their revenue stream- like state income tax- would force them to evaluate the operation. Oklahoma government could certainly stand to tighten the belt a lot.

*****
Second, Laffer’s theory of supply side economics has been proven to work. That means the amount of tax revenue wouldn’t decrease by the full amount and in fact could increase. When Reagan advocated reducing taxes during a major recession in the 1980s, many laughed at the Gipper, but it worked. Supply-side economics, also known as trickle-down economics, provided the private sector stimuli that resulted in increased consumer spending. Over time, the boost to the nation’s economic growth generated a larger tax base, which made up for the revenue lost from the tax cut. Even if the elimination of the income tax cost state government revenue, would that be a terrible thing? Oklahoma lawmakers and leaders should be trying to streamline government by consolidating and evaluating.
*****
Third, what about an individual taxpayer’s ‘essential services?’ Many Oklahoma taxpayers are doing without so they can pay their taxes. It’s their money! They should be enjoying the fruits of their labor, not funding a giant government money pit. State government does have some ‘essential services,’ but what some lawmakers consider ‘essential,’ taxpayers may consider ‘excessive.’ Robert Half said, "People try to live within their income so they can afford to pay taxes to a government that can’t live within its income."
*****
Laffer is known for his 'bell curve'(pictured above) which he uses to illustrate the concept that taxable income will change in response to changes in the rate of taxation. When graded on the curve, Oklahoma state government fails. We should eliminate the state income tax.

When I was a kid, I appeared on

THE TENNESSEE ERNIE FORD SHOW

during a 1957 Christmas show. I found

the clip and here it is.

I'm the kid directly to the right of Tennessee Ernie.

Enjoy!

Steve

1 1 4 5 !

In order to win the Republican nomination for President, a candidate has to get 1145 delegates. With changes made to the primary system by the GOP, the earliest a candidate could gather enough delegates to be the nominee would be on March 20, 2012 after the Illinois primary. It will likely be much later because no candidate will get every single national delegate between now and March 20th.

*****
Oklahoma will hold a presidential preference primary on Super Tuesday March 6, 2012. Ten other states, including Texas will vote that date, with 556 delegates up for grabs- the most in any one single day. Oklahoma has forty three (43) delegates to the 2012 GOP National Convention in Tampa. Fifteen (15) are chosen at the district level- the remainder at large. The delegates are allocated based on the percentage of vote for each candidate. OKLAHOMA IS NO LONGER WINNER TAKE ALL. Several other states have also changed from ‘winner take all’ to proportionate allocation which will make the nominating process last longer than in years past. It is quite possible the GOP nominee will not be selected until June when California votes. If most of the current eight (8) candidates stay in the race and spilt the delegates, it is also possible this could be a ‘brokered’ convention.
*****
Conservative Oklahoma Democrats who want to have a voice in who the GOP presidential nominee will be should complete a change of registration form ASAP and mail it in. Oklahomans overwhelmingly voted Republican in the last presidential election- 2008-even though the voter registration favors Democrats. It's time those conservative Ds align with their convictions and re-register. Our country's future is at stake.

Weekly Opinion Editorial

PAY TOLL AHEAD!
by Steve Fair

Toll roads are at least 2700 years old, as tolls had to be paid by travelers using the Susa-Babylon highway in the seventh century BC., but motorists and truckers traveling through Oklahoma probably think our state motto is “Pay Toll Ahead.” Oklahoma ranks second in the U.S. in total number of miles of toll roads at 600. We were the first state west of the Mississippi to build a toll road (1953) and now operate ten (10) turnpikes - all under the authority of the Oklahoma Turnpike Authority.
*****
The Oklahoma Turnpike Authority consists of the Governor (ex-officio) and six members serving without pay for eight-year terms from various transportation districts. Governor Fallin appointed her six members in March. She only retained one of Governor Henry’s appointees, David Burrage from SE Oklahoma. Fallin can remove any member of the Authority, at any time, with or without cause. Authority members have full control over all turnpike operations.
*****
The Oklahoma Turnpike Authority was created by the Oklahoma Legislature on April 30, 1947 to provide for the construction of the Oklahoma City-to-Tulsa Turnpike (officially named the Turner Turnpike in 1947). The Turner was the only anticipated Turnpike project at the time of the legislation. The Turner cost a mere 38 million dollars to build and opened for traffic in May of 1953. When the Turner was built, Oklahomans were promised that when the road was paid for, the toll booths would come down. That same promise was made when the Will Rogers and the H.E. Bailey turnpikes were built, but the toll booths remain. Edmund Burke was right when he said, “Hypocrisy can afford to be magnificent in its promises, for never intending to go beyond promise, it costs nothing.”
*****
The Turnpike Authority receives revenues from turnpike tolls and a percentage of the turnpike concession sales. The Authority has on several occasions issued Turnpike Revenue Bonds for the purpose of paying the costs of turnpike projects. Turnpike Revenue Bonds are payable solely from the tolls and other revenues of the Authority and do not constitute indebtedness of the State. Currently the Oklahoma Turnpike Authority's debt sits at $1.1 billion and it won't be paid off until 2028. The Authority pays about 5 percent interest on that debt, which means bondholders will profit close to 60-million dollars from Oklahoma turnpike tolls this year alone.
*****
Basically the OTA is a billion dollar private enterprise run by Oklahoma government. In their annual reports, the OTA calls itself ‘a component unit’ of the State of Oklahoma. Few states have a separate entity in the highway business. Why does Oklahoma have a Turnpike Authority?
*****
The initial reason the Authority was created was because the Democratically controlled Oklahoma legislature wouldn’t spend federal highway dollars where they were supposed to be spent. According to the Federal Highway Administration of the 31 states that divert Motor Fuel Tax money to non-transportation uses, Oklahoma ranks second, diverting almost 24% of its Motor Fuel Tax collections.

*****
Fortunately legislative funding of roads and bridges in Oklahoma is changing. Since Republicans took over the state legislature in 2004, a total of approximately $1.8 billion has been allocated for upgrading roads and bridges in Oklahoma. We still have a long way to go to catch up, but we are finally on the right road.
*****
The real reason Oklahoma’s Turnpike Authority is still in existence is simple- MONEY! When you toss your toll into the basket, it doesn’t go into Oklahoma state government treasury, it goes to the OTA. Common sense would dictate the bulk of the toll fee would be spent on upkeep and maintenance of the road you are traveling on, but that’s not the case. According to the OTA’s annual report, only about 30% of your toll goes to maintain the road- the bulk goes to the holders of the revenue bonds. That means when you toss your coins into the basket, some investor is getting the majority of the money. You can’t blame the investors who are just trying to make a buck. You have to blame Oklahoma government for allowing this to go on for almost sixty years.

*****
The Oklahoma Turnpike Authority should be dissolved and placed under ODOT. It has outlived its usefulness. The toll booths should come down as promised and Oklahoma government should get out of the private enterprise/toll collecting business.

Bar Stool Economics

Author Unknown

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100 and if they paid their bill the way we pay our taxes, it would go something
like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.)
So, that's what they decided to do.

*****
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." So drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free...but what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'. They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

*****
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before...and the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

*****
"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man who was now paying nothing, along with the first four. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got
only two? The wealthy get all the breaks!" "Wait a minute," yelled the first five men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.

*****
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

*****
And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

*****
For those who understand, no explanation is needed..
For those who do not understand, no explanation is possible.

My thoughts on the 2012 GOP Presidential Field

SOOTHSAYING 2012

by Steve Fair

I have resisted making a prediction of who will win the 2012 GOP presidential nomination until now. I predict that Romney will be the nominee and that Cain will be his running mate. Beyond that, here is my take on each of the candidates.

**********

Herman Cain: While his 9/9/9 plan sounds good, some say it will increase tax on the poor and reduce the tax on the rich. The reality is spreading out the burden would be an improvement over what we currently have. Cain is weak on foreign policy and while he has improved some recently, he is still lacking. While the sexual harassment charges are being blown out of proportion by the media, when you sing gospel music at your appearances, you can expect more scrutiny on moral issues. Don’t forget Herman was on the board of the Fed. That’s not talked about much, but it will hurt him in the primary. Still my candidate and will be in OKC on December 5th .
*****
Newt Gingrich: The most able debater in the crowd. In fact- a real master-bator(I couldn’t resist). Newt can analyze a situation better than anyone, but has trouble governing. Anyone who describes himself as ‘the smartest person in the room,’ lacks the humility and character to be President. Read Dr. Coburn’s book, “Breach of Trust,’ if you want a perspective on Newt. If just the families of Gingrichs former wives vote against him, he’s doomed. Newt is a complete egocentric pragmatist who would be a disaster as President.
*****
Ron Paul: Libertarian and proud of it, Paul’s position on Israel is his major flaw. His isolationist policies would be a disaster for the U.S. His proposed legalizing of drugs would also be a challenge in the general. He is right about the Fed, the budget and health care. Paul’s ‘cult’ has seemed to finally recognize the ‘in your face’ tactics they used in 2008 don’t win friends and influence people and more importantly hurt you at polls. They have softened their approach and that is the reason he is doing better in the polls. He has also done very well in the debates by staying on message.
*****
Rick Perry: How can he still be in the race? He seemed to think if he laughs at himself, everybody will forget his debate gaffs. If this guy becomes President, he will give all the illegals amnesty and free college education. He is great on some issues, but he is a disaster on several key ones. He can raise money like no one in the field which will keep him around longer than he should be. We need a President who can think on his feet and Perry is not it.
*****
Rick Santorum: Of all the candidates, he is probably the best qualified and the most consistent with his message. His problem is he comes across as a whiner at every debate. And Santorum needs to stop trying to take credit for every positive piece of legislation that was passed during the time he was in Congress. With a nickname like Rooster, how can he not be taken seriously? He would be a great VP pick.
*****
Mitt Romney: Most consistent- ly BORING! Romney stays on message, but he doesn’t excite the troops. Obama would blister him in a debate, even if Mitt had the facts on his side. RomneyCare is an issue as is his flip flop on abortion. He has the best campaign mechanism in place for the early primary states, but it remains to be seen if he can translate that into votes. His business background is impressive, but how hard is it when you start at the top. Romney was born on third base and thinks he hit a triple.
*****
Jon Huntsman: How can anyone who worked for Obama be a serious candidate for the GOP nomination? This former ambassador to China sounds more liberal at each debate and clearly is just staying in because his family fortune can let him. He was a decent Governor and while early on he may have been in consideration for VP, now that is out of the question.
*****
Michele Bachmann: Idealistic and energetic, but she lacks executive experience. Sound familiar- like in Obama? Bachmann got off to a quick start and has sputtered as of late. In the debates she REPEATS the same lines, hoping to get the applause and cheers she got the first time she delivered them. Just voting no is not really governing. She is not Sarah Palin and it shows.

Weekly Opinion Editorial

PLAN FOR THE FUTURE REQUIRES BALANCE!
by Steve Fair

Obamacare gives states an option: Either establish insurance exchanges by January 1, 2014, or the Secretary of Health and Human Services will establish one for them. An “exchange” is essentially a bureaucracy where federally-mandated health insurance may be bought and sold. Thus far only seventeen (17) states had set up an exchange and Oklahoma is not one of them.

*****
According to policy experts, state insurance exchanges are not being set up fast enough to meet the 2014 deadline. The delay could mean that Oklahoma and other state legislatures are at risk of handing over a central component of the mandated federal health care effort to the federal Department of Health and Human Services, making the federal government even more powerful than it already is.

*****
During this year’s legislative session, the Oklahoma House passed a proposal to use a $54 million federal grant to set up an exchange system, but that proposal was derailed after an outcry from conservatives. They believed that accepting the grant money was an endorsement of ObamaCare. Proponents of the proposal said the grant money would not be earmarked for future use by Oklahoma, but redirected to other states.

*****
In response, the Oklahoma legislature created, ‘The Joint Committee on Federal Health Care Law.’ The ten member committee’s purpose was study how the federal health care law would affect Oklahoma. They met five times from September to November and concluded they were ‘unsure’ about what Oklahoma should do concerning a health care exchange.

*****
The two co-Chairs, Rep. Glen Mulready, R-Tulsa Sen. Gary Stanislawski, R-Tulsa, met with Oklahoma U.S. Senator Tom Coburn last week and discussed the issue. Coburn, an OGBYN physician, told them to copy Utah’s exchange program. The Utah program was set up before ObamaCare was passed and it is still unclear if it will meet the guidelines of the federal mandate.

*****
According to Mulready, Coburn told them they had to show action and not defiance in regard to the exchange otherwise HHS Secretary Sebelius will be in Oklahoma ‘telling you exactly what to do and when and where.’ Coburn also said he was "not optimistic whatsoever" about the chances of state challenges to the law that are now pending with the Supreme Court.

*****
In a Wall Street Journal editorial last week, Jonathan H. Adler and Michael F. Cannon pointed out a major glitch in ObamaCare involving the exchanges that will likely come up no matter the outcome of the top court ruling. They wrote, “ObamaCare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of ObamaCare's spending and practically force Congress to reopen the law for revisions.” Adler and Cannon also allege the Obama administration is trying to fix the glitch through the IRS without going through Congress, which they conclude is illegal. You can read the entire editorial at http://online.wsj.com/article/SB10001424052970203687504577006322431330662.html

*****
More than any modern government program since Social Security, ObamaCare has divided the country into pragmatics and idealists. People who are pragmatic are said to be more practical and willing to compromise. Some conservatives call pragmatics unprincipled. That is not necessarily true. Often pragmatics are the voice of reason in a sea of confusion. As Coburn correctly points out, it appears we have ObamaCare whether we like it or not. It now becomes necessary for the Oklahoma legislature to prepare for implementation.

*****
Those critical of the idealistic conservatives who derailed the exchange plan this past legislative session should remember the words of George Bernard Shaw: "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” They were not willing to fold the hand before all the cards were dealt. Pragmatics are willing to concede defeat before the game starts. We need a balance of both pragmatics and idealists in leadership. Without the idealistic, we never move forward. Without the pragmatic, gridlock rules.

*****
Since the Health Care committee failed to come up with a plan, it appears Oklahoma legislators are putting all their chips on the U.S. Supreme court ruling and have no contingency plan if ObamaCare is ruled legal. You should always have a back-up plan. Mark Twain said, “Plan for the future because that's where you are going to spend the rest of your life.” Having a contingency plan is not compromise- that is simply accepting reality.

Weekly Opinion Editorial

NUTHIN’ BUT HONEY?
by Steve Fair

Last week, the members of the Oklahoma Task Force on State Tax Credits and Economic Incentives meet and discussed recommendations on how to rein in ineffective and impractical tax credits. When the business tax credits were set up, they were supposed to help existing Oklahoma businesses grow and expand. Recent revelations have shown instead they cost the state millions in lost tax revenue and benefited a few individuals by reducing their tax liability. The task force listed ten recommendations including authorizing the Oklahoma State Auditor and Inspector to annually audit the programs.

*****
“We are not against business. We don’t oppose growth,” said state Rep. David Dank, R-Oklahoma City, who chairs the task force. “We believe that government policy can help create jobs. We don’t think all credits or incentives are bad. What I think most of us believe after all we have heard here is that far too many tax credits and other incentives enacted in the past were created for the wrong reasons and in the wrong way.”
*****
Dank described the transferable tax credit situation in a colorful way: “The simple truth is that a few of these tax credits are like the huckster who took a bucket of manure, covered the top with an inch of honey and sold the whole thing as a full bucket of honey. It wasn’t until the sucker got home with it that he found out what he had actually bought,” The problem is that Oklahoma taxpayers were the suckers in this situation.

*****
According to Capitolbeatok.com, State Treasurer Ken Miller, a Republican and a member of the Task Force, agreed there should be less tax credits, but took issue with the auditing recommendation. He said he was “not yet opposed to enhancing the auditor’s authority, but also not yet convinced or persuaded to grow government.” He said he was concerned whether or not proposals to increase the auditor’s role could be done with existing resources, or if more spending would be needed. Miller was reported as saying he believed the legislature should provide the ‘oversight’ on the programs. You can read the entire article at http://capitolbeatok.com/_webapp_4074992/Treasurer_Ken_Miller_takes_critical_view_of_some_reform_ideas_before_tax_credit_task_force
*****
Three observations on the transferable tax credit saga:
*****
First, it’s clear some of these tax credits benefited wealthy individuals in Oklahoma and created fewer jobs than what was promised. Who knows if the lawmakers who wrote the legislation were aware they were selling a bucket of manure with a thin honey layer? If they did, shame on them. Who knows if the legislators who voted for the credits knew the bucket was mostly manure? If they did, shame on them. But going forward, every tax credit program that reduces the amount of taxes due to the state should be subject to audit by the State Auditor and a complete report provided to the public.

*****
Second, Miller is right about Oklahoma government being too big. In fact, Oklahoma government’s annual ‘expenditures’ have grown every year the past decade- from 9.6 billion to 16.6 billion. The ‘appropriated’ budget monies-money the legislature allocates- has gone down in recent years, but the overall size of Oklahoma government has continued to grow since 2001. That growth trend needs to be stopped, but one of the ways to stop government from growing is not to scrimp on oversight.

One of the fundamental roles of state government is to make sure Oklahoma tax dollars are not misappropriated or misused. The elected official charged with that responsibility is the State Auditor. Expanding the role and responsibility of the Auditor’s office just makes sense. Miller is correct in saying the state legislature is our first safeguard against bad policy. Lawmakers should never let a bucket of manure with a layer of honey get passed and signed into law. Every bucket of proposed legislation needs to be examined to determine if the ingredients are as advertised. If that had been done, this tax credit program would have never have seen the light of day.
*****
Third, authorizing the State Auditor to insure tax credit programs are doing what they are supposed to be doing is just common sense. Granted, it will require an investment. It will require additional staff in the Auditors office and a bigger budget, but growing government? Hogwash! Auditing government programs is just good judgment and a wise investment.

Weekly Opinion Editorial

WE NEED CRAZY JOE!
by Steve Fair

Historically, public schools in America were funded largely by local property taxes. Local revenues, however, have not kept up with the needs of the schools and have actually decreased in many states. To compensate for this change, state government entered the picture and backfilled these losses and now state funding represents the majority of funding for most local school districts. In Oklahoma, state government collects money earmarked for education from school land, earnings, REA tax, motor vehicle taxes, gross production tax, gambling, and a few other sources. The legislature then divvies up the money by using a ‘funding formula.’ The formula takes into account the number of students, transportation costs, etc.

*****
Despite all the media attention to federal programs like No Child Left Behind, the federal government does not contribute a large amount to running America's schools. And the federal money that is given to schools often comes with strings attached.

*****
On average, Oklahoma’s K-12 schools receive about eight percent of their funding from the federal government, fifty percent from the state budget and the rest from local taxes. Bear in mind that Oklahoma school districts have varying funding percentages due to the local tax factor.

*****
Education funding is the single largest expenditure in the Oklahoma state budget- over 3.4 billion. One Oklahoma state representative believes that total is actually 2 billion higher. Oklahoma State Rep. David Brumbaugh, (R-Broken Arrow) is conducting an interim study on where Oklahoma secondary education dollars are being spent and says, “Oklahomans spend $5.4 billion on education, or $8,411 per student a year according to the Friedman Foundation, which doesn’t include the dedicated revenues that are going to schools that don’t go through the appropriations process,” said Brumbaugh. “That alone indicates we need greater transparency and accountability on actual costs. Furthermore, funding for things like debt service, CareerTech, bursars, pensions, or depreciation on buildings and assets are not currently included in those figures; I believe that data should be made easily accessible to the public. Overall, costs continue to go up, yet in many school districts less than half of expenditures are getting to the classroom.”

*****
Brumbaugh’s demand for accountability and transparency from education is a good first step. Rep. Corey Holland, (R-Marlow) has pledged to shine the light on where/how higher education is spending our tax dollars. The key will be for other state legislators to get on board and demand accountability from education on where tax dollars are being spent.

*****
Education dollars not getting to the classroom is not just an Oklahoma problem, it’s a national one. In a 2010 study conducted by the National Center for Policy Analysis, Michael Barba wrote, “Public education now costs federal, state and local governments upward of $500 billion annually. This total is up from $354 billion 15 years ago and currently represents the largest state and local government expenditure. While spending increased nearly 50 percent, enrollment increased by just over 10 percent, reading and science scores held steady and on-time graduation hovered at 70 percent. Instead of cutting dollars spent in the classroom, state legislators across America should require clear accounting for how education tax dollars are spent, cap non-instructional spending and limit the growth of spending outside the classroom.”

*****
In Texas, rising administration costs in public education is also being questioned. Texas State Representative Erwin Cain, (R-Sulpher Springs) says in the Lone Star state for every five teachers employed in Texas public schools in the 1970s, there were just two non-teachers. Since 2004, non-teachers have been hired at nearly three times the rate of in-classroom teachers in Texas and out of classroom employees now equal those in the classroom. Cain believes this is a disturbing trend.

*****
If Texas has too much education administration costs, what about Oklahoma? The Sooner state has more total school districts than Texas. Each one of those districts has buildings, buses, and administration. 52 cents of every dollar allocated for K-12 education in Oklahoma goes for non-classroom related activity. This is not a new development, but has been ongoing for years in Oklahoma, yet no lawmaker wants to jeopardize their political career by addressing the dreaded ‘C” word-consolidation- so each year the education political football is kicked to the next legislature.

*****
To fix the problem will require legislative leadership with the same attitude of Joe Clark (Morgan Freeman) from the movie “Lean on Me.” They will have to forget their career, their retirement, their legacy and their security and do what is right. Like ‘Crazy Joe,” they will have to make tough decisions that will upset the establishment. But I believe like Joe they will be rewarded with a legacy that they made decisions that made a profound positive impact on this state.

Weekly Opinion Editorial

MAIL ORDER IS FOR A BRIDE, NOT DRUGS!
by Steve Fair

The Oklahoma State and Education Employees Group Insurance Board was created by the legislature in 1990 to administer the health, dental, disability and life insurance programs for state employees and educators. It is governed by an eight member appointed board that meets monthly. For several years, the OSEEGIB has been toying with the idea of having state employees and teachers purchase their drugs through a mail order pharmacy. The toying is over.
*****
In a press release issue on August 19th, the OSEEGIB said, “Beginning January 1, HealthChoice plans will make a mail-order pharmacy program for maintenance medications available to all pre-Medicare members. Maintenance medications are prescriptions that are usually taken on a daily basis and include drugs used to treat high-blood pressure, diabetes, high cholesterol, heart conditions, etc. By adopting a mail-order pharmacy program, it is estimated the plan will save about $9 million in prescription drug costs."
*****
Not everyone was happy with the decision. The Pharmacy Providers of Oklahoma, who negotiates contracts on behalf of over 500 Oklahoma pharmacies, distributed a flyer to HealthChoice members stating the proposal would hurt locally owned pharmacies and communities. The presented a plan of their own the ‘Community Pharmacy Proposal,’ saying it would save taxpayers $13.5 million more than the mail-order proposal.
*****
PPOk also said the decision would hurt local pharmacies and would have a negative economic impact of up to $75 million annually. The OSEEGIB disputes the amount of the economic impact and said they have been more than fair with independent rural Oklahoma pharmacists by ‘maintaining their reimbursement rate for over two decades.’
*****
After the PPOk’s flyer was distributed, the OSEEGIB’s Director of External Affairs, Dana Webb responded with a four page letter to members of the legislature providing a timeline of when the mail order proposal was discussed, who was invited to address the issue, and the justification for the decision by the board.
*****
Last week, three Enid area Republican lawmakers- Senator Patrick Anderson and Representatives John Enns and Representative Mike Jackson, sent a letter to Governor Fallin urging her to stop the mail order implementation by executive order. “There are better approaches to take than this OSEEBIG plan if the goal is to save money. Other options do exist- OSEEGIB has heard their plans and does not seem interested,” the lawmakers allege.
*****
This issue begs five questions:
*****
First, the move to a mail order pharmacy by the OSEEGIB will directly impact over 100,000 state employees and teachers plus their dependents. Webb states in her letter the OSEEGIB held two public meetings in August on this issue and lists a laundry list of organizations and associations contacted, it still begs the question why this flew under the radar? I can assure you that most of the insured were unaware this change was being considered.
*****
Second, who is Medco? They are a New Jersey publically traded company and a spinoff of Merck. They provide health care management services to over 65 million people nationally. In fact, Medco is the current Pharmacy Benefit Manager for the OSEEGIB. They also just happen to be in the pharmacy business. They operate nine mail-order pharmacies and six call center pharmacies throughout the country. Doesn’t this look like a conflict of interest? They decide what is covered, how much is paid and they sell the product?
*****
In 2004 Medco settled a lawsuit brought by 20 states alleging that they failed to disclose ‘incentives’ they received from drug companies and improperly switched or pressured doctors to switch patient's medication in pursuit of profit. Medco Health Solutions agreed to pay the United States $155 million plus interest to settle allegations that it defrauded the government. Was the OSEEGIB aware of Medco’s ethics issues?
*****
Third, if the PPOk’s Community Pharmacy Proposal will save taxpayers more money than Medco, why was it not considered by the OSEEGIB? On the flip side, why wasn’t PPOk charging these reduced prices proposed in their ‘Community Pharmacy Proposal’ before the mail order issue came up? Both questions should be addressed.
*****
Fourth, was the trust factor considered? Most people trust their local pharmacist when they have questions about their medication. They know them and feel comfortable confiding in them. Calling an 800 number and talking to someone in a call center just isn’t the same.
*****
Fifth, why would we intentionally do something to hurt our local businesses and communities? The actual savings to the taxpayer and the amount of economic impact this proposal will have on local pharmacies may be in dispute, but whatever the impact, there is no doubt it would hurt the local pharmacies. That actual savings to the taxpayers may also be insignificant.
*****
Fallin should issue an Executive Order delaying the implementation of this proposal. This decision needs to be revisited with the next round including full disclosure and more legislative and public input. Mail order may be fine for a bride, but not drugs.

Weekly Opinion Editorial

HAS RIGHT TO WORK WORKED?

by Steve Fair

Right-to-work laws are enforced in twenty-two states, mostly in southern and western states. Right to Work laws are allowed under the provisions of the Taft-Hartley Act, which prohibit agreements between labor unions and employers to make union membership and/or payment of union dues a condition of employment.
*****
Oklahoma passed State Question #695(Right-to-Work) on September 25, 2001 in a special election. The vote was close- 54% to 46%- with twenty six of the state’s seventy seven counties voting against the proposal. Of the twenty two Right to Work states, Oklahoma was the last state to pass Right-to-Work. To view county by county election results, go to http://www.ok.gov/elections/support/02sq.pdf
*****
In 2001, I wrote a brochure that was widely distributed in the state advocating the passage of Right-to-Work entitled, “The Exodus Continues.” It featured a comparison of the mass migration of the Okies fleeing the dust bowl to modern day college grads fleeing the state for better paying jobs. The facts were clear- just like in the 1930s, Oklahomans were leaving the state not because they hated Oklahoma, but because they needed a job.

*****
It has been ten years since Right to work was passed in Oklahoma and eight years since it was implemented. Has passage of Right-to-Work worked in Oklahoma? That is a legitimate question and one that deserves an answer.

*****
According to The Economic Policy Institute, R-T-W has failed in Oklahoma. In a paper written in February 2011, the EPI claims “manufacturing employment and relocations into the state (Oklahoma) reversed their climb and began to fall, precisely the opposite of what right-to-work advocates promised.” They also point out the state’s unemployment rate(still lower than the US rate) continues to be comparable to neighboring states. You can read the report at http://www.epi.org/publication/right-to-work_law_did_not_help_oklahomas_labor_market/
*****
In the interest of full disclosure, The Economic Policy Institute is a union funded organization with an agenda, so their objectivity in the analysis must be questioned. Because jobs are a primary issue at the forefront of the 2012 Presidential campaign and Republicans have introduced a National Right to Work Act in Congress, the EPI will use any means possible to defeat a National Right to Work law. For more on the National Right-to-Work law, go to http://capwiz.com/nrtwc/issues/alert/?alertid=48799571&type=CO

*****
Last week, the Oklahoma Council of Public Affairs released an in-depth study by Scott Moody and Wendy Warcholik countering the EPI study. They claim Right-Work has been a boon for Oklahoma. “Manufacturing output and productivity have outpaced the competition, and people from non-RTW states are voting with their feet by moving to Oklahoma in increasing numbers,” Moody and Warcholik wrote. You can read the report at http://www.ocpathink.org/articles/1549.
*****
Oklahoma’s population grew +8.7% between 2000 and 2010, but according to the US Census Bureau, the US population grew faster- +9.7% -during that same period, so Oklahoma has not seen major population growth from migration. And increased productivity” in manufacturing was not what those of us advocating passage of Right to Work were talking about in 2011. When we said R-T-W would help Oklahoma, we meant jobs- real jobs. We expected existing businesses to expand and grow and other businesses to relocate to the state.

*****
The truth is the measure of how Right to Work has helped Oklahoma is somewhere in between the two studies. Passing Right-to-Work in Oklahoma was not a mistake and it certainly has helped our state in business recruitment, but it is fair to ask if R-T-W has delivered what was expected. It hasn’t and here is why:
*****
First the national economical climate has been poor. Even though the R-T-W election was held two weeks after 9/11, no one could have foreseen that event would have a dramatic impact on the economic business climate in America. Ten years later, almost ten percent of Americans are unemployed and our country teeters on the brink of bankruptcy. Much of that is due to the cost of the war on terror.
*****
Secondly, Oklahoma has a flawed strategy in business recruitment. Economic development teams across the state spend too much time trying to recruit the ‘sexy’ jobs (aerospace/high tech), to Oklahoma and neglect the ‘meat and potatoes’ (distribution centers/consumer products) segment. Because of our geographic location, Oklahoma should be the hub for DCs, freight companies and CPG manufacturers. Those segments provide good paying stable jobs. In economic development, every segment should be recruited.
*****
Thirdly, Right-to-Work was just one of the impediments to recruiting business and industry to Oklahoma. Oklahoma’s workers comp laws and jackpot justice laws were two others. This past legislative session progress was made in both those areas. We have other impediments- tax structure, infrastructure- and our leadership must address those if we are to continue to move forward.
*****
Finally, passing R-T-W was not a quick fix solution to Oklahoma’s job woes. It took the state one hundred years to get to #45 in the country in per capita income. It will take time to reverse the trend but Scotsman Walter Elliott, a physician and politician, was right when he said "Perseverance is not a long race; it is many short races one after another." Right to Work was just one of those races.

Weekly Opinion Editorial

GRADING THEIR OWN TESTS!
by Steve Fair

The Oklahoma Tax Commission last week released a report that examined the 2009 impact of the state’s Small Business Capital Formation Incentive Act as well as the Rural Venture Capital Formation Incentive Act. These tax credit programs stated objective was to create jobs for Oklahomans. According to the report, the two programs cost Oklahoma taxpayers more than $550,000 per job. In comparison, Solyndra cost federal taxpayers $486,000 per job.

*****
According to State Representative Mike Reynolds, (R-Oklahoma City), “This is just more proof that the government should not try to pick winners and losers in the marketplace. The track record of government officials displays why legislators, other government officials, and employees in the various departments who make the decisions to give away this money aren’t in the private sector. This money should have been used for roads, schools, or constitutional incentives like across-the-board tax cuts.”

*****
The Small Business Capital Formation Incentive Act provides up to a 30 percent tax credit of qualified investments made in certain small business capital companies or investments made “in conjunction” with those ventures.

*****
The Tax Commission report found that of the $158 million in total tax credits generated through the program in 2008 and 2009, only $41 million has currently been claimed, leaving at least $117 million in potential revenue reductions for the next budget year. Of the 99 total jobs created by the program, over half were at the Patriot Golf Course, a private golf course in the Tulsa area.

*****
State Representative David Dank, (R-Oklahoma City) is the chairman of the Task Force on State Tax Credits and Economic Incentives. He and Reynolds agree that a 2010 AG’s opinion that some of the tax credits in the two programs were unconstitutional because they failed the ‘accountability’ test should sent up a red flag and put a stop to them, but it didn’t.

*****
In the 2010 opinion, then Attorney General Drew Edmondson said for the credits to be legal, they had to serve a public purpose, provide more benefit than cost, and include adequate controls and safeguards.

*****
Dank believes many state tax-credit programs fail the third test involving safeguards. “We have reviewed enough of these tax credits so far to know that the controls and safeguards in place are often a joke,” Dank said. “In many cases, they are nonexistent.” In other words, these programs had no oversight- no one was watching to make sure they were not being abused. Why has there not been any ‘accountability’ for these two programs?

*****
Oklahoma has the office of State Auditor and Inspector. The state constitution states the Auditor’s duties include examining the state and all county treasurer's books, accounts and cash on hand or in bank and to publish an annual report with the results of those examinations.

*****
You would think the State Auditor’s office could audit any agency or program that receives state money, but that is not true. The office is limited by statue from looking at certain agencies books. You would also think that any honestly administrated publically funded program would welcome an annual outside audit by the Auditor’s office.

*****
But there are two problems. First, some agencies and programs don’t want the taxpayers to know how and where tax money is being spent. They know taxpayers would be outraged and demand reform, so they conduct ‘internal’ audits that are designed to make them look good. They account for the money, but no ‘performance’ audit is conducted. A performance audit differs from a regular audit because it examines whether tax dollars were spent economically, efficiently and effectively. Agencies and programs shouldn’t be grading their own tests. An objective set of eyes should be auditing their books.

*****
Second, audits are expensive. Expanding the reach of the Auditor’s office would cost money, requiring the legislature to increase the Auditor’s budget, but if we are truly concerned about accountability, this would be a good investment for taxpayers.

*****
The so-called Venture Capital programs mentioned were supposed to create permanent jobs for Oklahomans, but they appear to have done nothing but give tax credits to wealthy investors. The long term answer is to expand the State Auditor’s authority to audit any agency, program or group that gets a penny of state money or receives a reduction in their tax obligations.

Weekly Opinion Editorial

DON’T MESS WITH OUR RIGHTS!

by Steve Fair

Qui tam lawsuits are essentially a civil lawsuit filed on behalf of the government by a private citizen for fraud on or false claims submitted to the government. The individual bringing the qui tam lawsuit, called the "relator," is often a whistleblower with personal knowledge about a past or ongoing fraud scheme. If the qui tam lawsuit is successful, the whistleblower is entitled to a share in the recovery. Qui tam is Latin for ‘he who sues in this matter for the king as well as for himself.” Qui tam lawsuits were used in colonial times, and were embraced by the first U.S. Congress as a way to enforce the laws when the new federal government had virtually no law enforcement officers.
*****
Close to half of the states have enacted Qui Tam laws modeled on the federal False Claims Act to combat fraud against state and local governments. Most of the reforms deal with Medicare and Medicade fraud.
*****

State Senator Rob Johnson, (R-Kingfisher) authored SB 331, which increases the number of signatures required for "qui tam" lawsuits against government in Oklahoma. Currently it takes only ten taxpayers to file a suit to stop a questionable government action in Oklahoma. SB 331 increased that number to one hundred registered voters or 2.5% of the registered voters in the district involved. It also limits the amount a citizen can be awarded from a Qui tam lawsuit to attorney fees and court costs. Currently citizens who bring Qui tam lawsuits can share up to fifty percent of the court’s award.

*****
Senator Johnson says the increase will make it more difficult for a small group of disgruntled citizens to stop a government project. He believes the increases to be reasonable. Evidently his colleagues in the Senate agreed, passing SB331 by a vote of 43-0. The measure passed the House by a vote of 65-34. See House votes at http://e-lobbyist.com/gaits/rollcall/64856

*****
On Thursday, Oklahoma City attorney Jerry Fent filed a lawsuit directly with the Oklahoma Supreme Court seeking to stop SB331 from taking effect on November 1st. Fent says the law will make it more difficult for taxpayers to stop government corruption. Fent named only Governor Fallin in the suit since she signed the bill.

*****
Fent has a history of suing government when he disagrees with their actions. He has been called both a watchdog and a nutcase by various groups. Fent sued the state in June of this year over the state budget. In 2010, he won a lawsuit against the state when the State Supreme Court ruled 6-2 in his favor after he successfully argued the legislature could not collect ‘a fee’ from one area and use it somewhere else. In that case, it was a clear violation of SQ 640 and the state constitution.

*****
Fent has also argued before the State Supreme Court the current Judicial Nominating Committee is unconstitutional because it operates from old historical congressional lines and not the new lines. He lost that argument in February. He argued unsuccessfully in 2009 that Oklahoma’s acceptance of federal stimulus money was not handled properly.

*****
No one should be able to get rich by suing taxpayers. The provision to limit awards to only attorney fees and court costs is needed reform, but raising the number of discontented citizens necessary to file a suit against the state from 10 to 100 is too much. It appears this bill may have been targeted at Fent and like-minded individuals who file frequent lawsuits against government, but when legislators ‘target’ a citizen because he uses his ‘right’ too much, they hurt all of us. The average citizen must have a mechanism to appeal laws that are not well thought out.

*****
Taxpayer lawsuits against government do cost taxpayers money, are sometimes frivolous and take up valuable time for courts, but we need them left in the tool chest. Let’s hope Fent wins this battle in the Supreme Court. In this case, he is battling for all of us.

Weekly Opinion EditorialOklahoma Prison Overcrowding a growing issue!
by Steve Fair

Last legislative session, HB 2131, authored by Speaker of the House Kris Steele, (R-Shawnee) and State Senator Patrick Anderson, (R-Enid) was approved overwhelmingly by both chambers of the legislature, passing the House by an 84-7 margin and the Senate 44-3. It was signed into law on May 11th by Governor Fallin and was scheduled to go into effect November 1st.

*****
The motive behind HB 2131 was Oklahoma’s prison overcrowding. According to Speaker Steele, “Our prisons are near capacity. Currently, if someone is convicted and considered a danger to society, there is virtually no place to put them.”
*****
HB 2131 changed the default sentencing structure from consecutive to concurrent terms, enhanced eligibility for community service and GPS monitor sentencing, and reduced the Governor’s role in the parole process for non-violent offenders.

*****
While the idea was good, the new law hit a snag last week when Oklahoma Attorney General Scott Pruitt said HB 2131 was unconstitutional. Pruitt’s opinion states that it violates the Oklahoma Constitution for the Oklahoma Pardon and Parole Board to grant parole without action by the governor. The statute provision that provided that, in cases involving nonviolent offenders, a parole recommendation by the Pardon and Parole Board is deemed approved if the governor does not take action on it within a 30-day period.

*****
While an Attorney General’s opinion is not binding on state officials, it appears the legislature and the Governor will defer to Pruitt’s judgment and start over next session.

*****
Oklahoma is the only state that requires the Governor to approve every parole after the Pardon and Parole Board submits a recommendation. That does seem unnecessary and redundant when you consider the Governor appoints the majority of the board. The Board is composed of five appointive members. Three are appointed by the Governor, one by the Chief Justice of the Oklahoma Supreme Court, and one by the Presiding Judge of the Oklahoma Court of Criminal Appeals. The five members serve four year terms that run concurrent with the term of the Governor.

*****
Like governors before her, Fallin supports the reforms in HB 2131 and was disappointed by Pruitt’s opinion. “It will be up to the legislature to once again look and see where they want to move from this point on, Fallin said. “I do support going to a vote of the people.”

*****
State Senator Harry "Turn" Coates, (R-Seminole) has filed Senate Joint Resolution 46 that would remove the governor totally from the parole process- violent and non-violent offenders. Coates’ says it will allow the Governor to focus on the state's budget and other official business. If it passes both chambers, it would still have to be approved by Oklahoma voters.

*****
"The Legislature took a step in the right direction this session passing House Bill 2131, but we need to do more to speed up the parole process and make it more efficient,” said "Turn" Coates, R-Seminole. “The Pardon and Parole Board is a group of highly qualified experts with backgrounds in criminal justice. Giving the Board complete control over the pardon and parole process will save the state money and allow the Governor to focus more time on her primary responsibilities, which are finding ways to strengthen the state’s economy, help attract new businesses to our state and improve the lives of our citizens.”

*****
Coates' proposal goes too far by totally eliminating the governor from the process. The governor is the ‘elected’ representative of the people charged with specific duties- one of which is to deal with pardons and paroles. No appointed body should be granted that much power. While efficiency is a desired characteristic of government, accountability is more important.

*****
Oklahoma’s prisons are being filled up with non-violent offenders. The Sooner state locks up more women per capita than any other state. More than two thirds of the women in Oklahoma prisons were convicted of nonviolent crimes (mostly drugs) and have children that become the responsibility of extended family or state taxpayers.

*****
According to the Oklahoma Department of Corrections, about 20,000 Oklahomans are convicted of felonies annually. The current population in Oklahoma prisons is about 26,000- 60% of those who are there for nonviolent crimes.

*****
Steele is on the right track by attempting to ease prison overcrowding. With the cost to Oklahoma taxpayers to lock up criminals now at over 600 million annually (almost 10% of the state budget), and growing this is an issue that demands immediate attention.