Evaluating the Governor and Legislature under Covid-19 and the Medicaid Expansion
Shortly after the legislative session started, the Coronavirus panic began to unfold. The governor issued an order for all non-essential businesses to shut down in counties with reported infections, but left open those businesses in counties with no reported infections. That was reasonable at that time (as of April 25, we still had eight or so counties in Oklahoma with no reported infections).
Without discussing motives, let me state clearly, Democrats, progressives, socialists etc., aided by their fellow travelers in the press, have pressured the Gov. Stitt to take such an extreme approach to the panic as to surely damage our economy. They have even pressured the governor to order a statewide “shelter in place” decree. While he eventually caved to the pressure and ordered a statewide closure for non-essential businesses, to his credit he has refused to issue a statewide “shelter in place” order, even in the face of pressure from the national media.
The Legislature got to work on its agenda. As a close observer, it is clear to me that for the first time in my 35 years as a political activist, the House is the more liberal chamber of our legislature. Another disturbing trend in the House is for the huge freshmen class to vote together like a school of fish. Only occasionally will one of them vote different from the pack.
I consider the House leadership to be very weak on conservatism, and for the second year in a row, they passed legislation to give a COLA (cost of living adjustment) to retired teachers and firefighters when neither of their retirement funds were considered sufficiently solvent to give COLA raises. Thankfully the Senate stopped such a foolish effort last year, and I hope they will do so again this year.
Truth is, since the strike of 2018, which was led by the union bosses and radical teachers mostly affiliated with the NEA/OEA, the state has given them almost everything they have wanted without getting a single reform in return.
My state representative is a professional investment advisor and says he agrees with me very strongly that it is imperative going forward that all newly hired teachers must hire in under a (defined contribution) retirement plan rather than the (defined benefit) retirement plan current teachers are in. Yet, when it came time to vote, he was one of the irresponsible 99 to vote in favor of increasing COLA raises for teachers and firemen when their retirement funds are not solvent.
While this simple reform would be better for the teacher’s retirements and do more to retain good teachers than anything currently being discussed at the Legislature, the union bosses and radical teachers will oppose such a move. Therefore, the only leverage the Legislature has to achieve this valuable reform is to withhold any COLAs until the reform is agreed to. When current State Treasurer Randy McDaniels was in the Legislature, he successfully got this reform passed for state employees. Older state employee’s “defined benefit” retirements are protected and newly hired state employees, including lawmakers, are on the better “defined contribution” plan which is basically a 401K retirement plan.
It was Monday, March 9, when I realized just how much trouble we are in for, and I immediately started sounding the alarm. I started calling lawmakers. With the oil production war between Russia and Saudis Arabia, an obvious attempt to do major harm to America’s shale oil boom, and our economy damaging reaction to the Chinese Coronavirus, the already declining stock market took a plunge off the cliff.
Revenues to the state were already declining, especially gross production taxes. In 2018, the legislature foolishly increased gross production taxes, thus making Oklahoma more dependent upon the most unstable revenue stream we have. I have been appealing to lawmakers to immediately exempt oil and gas companies from gross production taxes until the prices of those products again return to profitability.
We are facing over a $400 million revenue shortfall for the current fiscal year which ends on June 30th. Governor Stitt, acting as the adult in the room, called a special session and asked the Legislature to require a 1 to 2 percent reduction in agency budgets.
Acting like spoiled children, the Legislature basically told the Governor, no, no and hell no, then passed three pieces of legislation to use $500 million of our $1.16 billion in reserves to make sure state agencies don’t have to share in the sacrifices the people they are supposedly serving are having to deal with, as many of them are losing their businesses and their jobs.
The governor seemed to cave on the request for the very modest agency cuts and foolishly got into a public squabble over a few shekels to fully fund a digital transformation effort he wants done. In the meantime, as the picture for future revenues is looking very grim, the governor is strongly warning that agency cuts will have to be deep, to terrifyingly deep, over the unknown future of time. I believe he knows our remaining reserves are likely to be vaporized and still inadequate for next year’s budget, with possibly one or more additional years of need beyond.
It would really be good to see lawmakers get their heads out of the sand and start making some right decisions on some very hard issues. There is only one state government expenditure already scheduled for a dramatic increase in funding starting with the swearing of lawmakers following the November elections. Lawmakers are to get a raise from about $35,000 a year to about $48,000 a year. While a commission determines when they can get a raise and how much, lawmakers can and should in this case pass legislation to overturn the commission’s ruling. Every voter should contact their personal Representative and Senator to ask them if they have sponsored or cosponsored such legislation! Any lawmakers not willing to do so does not deserve your vote. I believe the Legislature is setting us up for another massive tax increase like what was passed in 2018.
On April 16, President Trump announced plans to reopen our economy. He made it crystal clear, not all the states were the same. Governor Stitt’s first reaction was disappointing, where he blathered, we are preparing for a surge. I don’t know why, his advisors along with those at the federal level, have been so wrong on many of their predictions. He was talking in terms of reopening considerations starting May first.
Fortunately, he has allowed better judgement to start sooner with a phased in approach starting April 24th. Good for the governor as he has done so in the face of criticism from the Democrats, socialists, or those ruled by irrational fear. That process needs to proceed forward as quickly as possible. We should expect some increases in hospitalizations and deaths in the short term. Those increases if any need to be kept at moderate levels.
State Question to Expand Medicaid
The advocates of expansion of Medicaid are Democrats, socialists, bleeding heart liberals and RINOs (Republicans In Name Only). To her credit, Gov. Fallin and the Republican controlled legislature would not expand Medicaid beyond our current obligations like so many other more conservative states refused to do.
Therefore, the socialists with big money backing, have gone into these states with petition drives. In every state where these petitions have led to a vote, it has passed. Just remember, during our working lives we have been forced to pay into Social Security and Medicare, but not so with Medicaid. Every penny of federal Medicaid funds are pure welfare tax dollars from the general fund. The states are required to match these expenditures, which in recent years have been the largest item of state budget growth for most states.
Women and children are already covered under our current level of obligation. This petition will include mostly lower income working men. The advocate’s primary claim is “we need to bring our tax dollars back to Oklahoma” as other states are using our money. If true it would be concerning.
However, Oklahoma as are most states, is what is known as a beneficiary state, not a donor state. Meaning we already receive far more dollars from Washington than we send in. There are no tax dollars from Oklahoma in Washington to come back. Any expansion in federal Medicaid dollars coming to Oklahoma will be newly printed dollars which will simply add to the already more than $1 Trillion dollars in deficit spending this year. That will also be added to the national debt that stood at $23.5 Trillion until Congress and the President went on a spending spree never before seen in America.
Unlike the Federal government, Oklahoma can’t print money. Therefore, our matching funds, expected to be in the neighborhood of an additional $150 million per year to start, will have to come by cutting other state agencies or by tax increases.
The reason this state question is so dangerous, beyond its socialist concept, if passed it will put this in our state Constitution. Meaning its funding will take precedence going forward. With our state facing at least two to three years of very difficult finances it will surely require massive tax increases when we can least afford it. We must vote this state question down. Any person voting for this Medicaid expansion, if it passes, should get up each morning, look into the mirror and say; I and others of my ilk are largely responsible for our deficit spending and our growing national debt.
Charlie Meadows is the founder and former president of the Oklahoma Conservative Political Action Committee (OCPAC ). He now holds the title of President Emeritus. He may be contacted at: Charliemeadows7@gmail.com