Oklahoma Legislature adjourns

Posted on: 5/31/17

The First Session of the 56th Oklahoma Legislature adjourned sine die on Friday, May 27. Of the 2,200 bills and resolutions introduced in February, the Legislature sent 358 to Gov. Mary Fallin. As of this report, she had signed 338 of the 358. The governor has vetoed 14 and has until June 10 to take action on the remaining bills.

State Budget
Sunday, May 21, was the last day for the Legislature to pass revenue raising measures to meet the Constitutional requirements in Article 5, Section 33.  Its provisions state:

• Measures cannot be passed in the final five days of a legislative session;
• Revenue bills must start in the House of Representatives; and
• Revenue bills must pass with three-fourths majorities in both houses of the Legislature or by a vote of the people (SQ 640, passed in 1992 by vote of the people)

According to a May 23 Tulsa World article, “Most lawmakers consider the 75 percent threshold a tougher climb than Mount Everest. And, in fact, in the 25 years since SQ 640 passed, scaling the world’s tallest mountain has been much more common than revenue bills making it through the Legislature. There has been only one of the latter, a provider fee the state’s hospitals asked to have assessed against them so they could capture federal matching funds.” (Emphasis added.)

Republicans and Democrats were unable to agree on a revenue package by the May 21 deadline. Republican leaders and Gov. Fallin put forth a revenue package they claim will begin to address the $878 million deficit with measures requiring only simple majorities in both houses (51 in House and 25 in Senate). The following is a listing of revenue measures (note: these are the Legislature’s estimates).

• SB 845, $1.50 “fee” per pack on cigarettes = $215 million
• HB 2433, adds 1.25 percent sales tax on new/used vehicle purchases = $111 million
• Move $32 million from Rainy Day Fund to Medicaid
• Move $33 million from Rainy Day Fund to public schools
• HB 2429, gross production tax hike to 4 percent on wells drilled between July 1, 2011 and July 1, 2015 = $95.3 million

Other revenue raising measures include repealing the income tax trigger and some tax credits. Already groups are threatening court challenges to some of the revenue measures based on Article 5, section 33 of the Oklahoma Constitution. If the measures are overturned, the governor would likely call a special session to address the budget with a focus on revenue raising measures that would require a supermajority of both houses of the Legislature.  

General Appropriations:  SB 860, David/Osborn, is the appropriations bill authorizing amounts for all state agencies. According to Sen. Kim David, the bill holds 16 state agencies flat for SFY ‘18 including the Oklahoma Health Care Authority (OHCA), Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS), and the Department of Human Services (DHS). It is important to note that “flat” means beginning at levels appropriated in the current year, SFY ‘17, as enacted in the previous legislative session.

Oklahoma Health Care Authority Appropriations: The agency needed an additional $69 million next year to avoid provider rate cuts. They will receive $32 million from the Rainy Day Fund, which is less than half of the amount needed to avoid provider rate cuts. Included in the OHCA appropriation are funds from SB 860, the $1.50 cigarette fee bill. OHCA receives $70 million, ODMHSAS receives $75 million, and DHS receives $69 million of the $257 million projected revenue from the Oklahoma Tax Commission. (As mentioned above, the “fee” is very likely to be challenged in court.)

ODMHSAS Appropriations: The final budget numbers mean that the department will have to make about $3.5 million worth of cuts and will be unable to restore provider cuts made previously.

Pause on the ABD Request for Proposal (RFP)  
HCR 1009, Martin/Yen, PAUSE, directs the Oklahoma Health Care Authority Board to refrain from awarding a contract based on the RFP initiated for care coordination models for aged, blind and disabled persons due to the uncertainty of new federal managed care regulations that will impact the Medicaid budget, until further review and approval pursuant to legislation enacted by the Legislature in the Second Session of the 56th Oklahoma Legislature. Status: passed House 83-4 with 53 House co-authors.

HCR 1009 stalled in the Senate. Sen. A.J. Griffin filed a resolution that is similar to the governor’s letter authorizing the OHCA to move forward in awarding contracts, but delaying implementation 90 days in spring of 2018. At this time neither resolution advanced. However, HCR 1009 had a significant number of co-authors in both the House and the Senate and OHA believes this will express legislative intent to the OHCA board.

Watch for a more complete OHA Legislative Report coming soon. (Lynne White)