OKLAHOMA CITY (March 8, 2012)—Policy analysts at the Oklahoma Council of Public Affairs (OCPA) released today the current results of their ongoing study of waste, inefficiency and non-core spending throughout Oklahoma state government. A free-market think tank, OCPA is widely known for its work on issues facing Oklahoma and the nation. In this case, their research has uncovered over $2 billion of potential savings for the state over the next three fiscal years, and the list released today shows just how to achieve those savings.
Michael Carnuccio, president of OCPA, said the list clearly shows that Oklahoma taxpayers are not getting the results they deserve from their hard-earned tax dollars.
“Combing through state agency budgets and previous appropriation levels, our researchers have identified a huge amount of taxpayer money that is either tied up in wasteful, inefficient bureaucracy, or is being spent on things that are clearly not core functions of government,” Carnuccio said. “By redirecting those funds and correcting these mistakes, the state could save the taxpayers $2 billion over the next three years.
Jonathan Small, OCPA’s fiscal policy director, said state policymakers should be cautious about requiring reforms to be “revenue-neutral” or committing to return state government spending to pre-recession levels. “The desire to get revenue levels back to where they were before the national recession that began in 2008 is based on a false premise that spending at that time should somehow be used as the standard,” Small said. “I would caution policymakers about using phrases like ‘revenue neutral’ because they can be easily misunderstood. When some people hear that phrase or sense a push to get back to previous appropriations levels, they can get the wrong message that every dollar currently spent by state government is justified or that it would not be better spent or invested by the taxpayer who earned it in the first place.”
Much of the OCPA list of $2 billion in wasteful state spending focuses on areas of appropriations that it claims would be easy to question as to whether they are essential functions of government. Carnuccio said Oklahoma Gov. Mary Fallin has defined core government service areas to be education, transportation, public safety, and the safety net for the truly needy. “Those areas only make up about $6.1 billion of the $6.6 billion in direct state appropriations,” added Carnuccio.
OCPA maintains that many of the items highlighted on its $2 billion savings list go beyond these core service areas, and its researchers say the savings can get even larger by closely studying core state government services areas and eliminating waste and inefficiency there as well.
While OCPA’s savings list covers several items, those listed below include some of the highlights and a brief explanation for each.
State employee health benefit reform. In 2010, in a bi-partisan manner, the legislature passed significant state employee health insurance reform that was vetoed. Currently the state’s health insurance plan for state and some education employees is costly. If the legislature passed the reform from 2010, which strengthens competitive bidding for benefit providers, stops the overpayment of benefits, and consolidates the state boards charged with directing the procurement of health insurance benefits for state employees, this and other private sector reforms can save taxpayers $75 million a year.
Insurance Department. Several agencies receiving state appropriations are able to operate on their own and stop receiving taxpayer dollars. For example, the Oklahoma Insurance Department under both a Democrat and Republican insurance commissioner has requested to operate entirely without taxpayer funds just like many other regulatory agencies such as the Banking Department, Securities Department, Accountancy Board and many others. The Consumer Credit Commission has requested to operate without taxpayer funds and that effort is being led in part by Rep. Wes Hilliard. Allowing regulatory agencies that generate enough activity to operate on their own without taxpayer dollars is just common sense. Taxpayer funds should be reserved for the core functions of government. Making several agencies non-appropriated will save $20.7 million a year.
Construction division at DHS. It is not the best use of taxpayer funds for the Department of Human Services to maintain a taxpayer funded construction division at the agency. This competes with the private sector. Further, with the shift in care for the truly needy to home based care and private sector community solutions, it is not the best use of funds to try and maintain and continue to amass infrastructure at a state agency. This reform saves $5 million a year.
State fairs, rodeos and golf courses. Currently, state agencies are required to spend funds on things like rodeos, roping contests, a fair, festivals, extracurricular camps and the Jenks aquarium. These are unnecessary earmarks, and not the best use of taxpayer funds. From FY-2001 to FY-2011, taxpayers have been required to cover losses on state golf courses of $7.95 million. Golf is not a core function of government and taxpayers should not have to fund it.
“Common sense reforms like these will lead to a better quality of life for all Oklahomans,” said Carnuccio, “and OCPA is dedicated to helping every citizen experience greater economic freedom.”
For the complete list of waste, inefficiencies, and non-core services, click here.
OCPA is a nonprofit, nonpartisan think tank that formulates public policy research and analysis consistent with the principles of free enterprise, limited government, and individual initiative.