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LEGISLATIVE UPDATE 49Th Oklahoma Legislature First Session – 2003

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LEGISLATIVE UPDATE 49Th Oklahoma Legislature First Session – 2003 LEGISLATIVE UPDATE 49th Oklahoma Legislature First Session – 2003 OKLAHOMA STATE REGENTS FOR HIGHER EDUCATION From: Carolyn McCoy & Lesa Jolly-Borin Friday, April 18, 2003 Highlights This Week: State Pension Funds to be Tapped for Education By Bill Duncan - Staff Writer (GIT) The Legislature plans to borrow money from three state pension systems to help finance public primary and secondary schools next year. The $1.95 billion the Legislature is appropriating to Oklahoma's 543 public school districts in HB 1160 for school year 2003-2004 includes $75,525,000 which will be redirected by SB 201, by Sen. Mike Morgan, D-Stillwater, and Rep. Bill J. Mitchell, D-Lindsay, from state pension system contribu- tions. The bill passed the House 69-29 and is now awaiting Senate action on the House amendments. The bill provides that between July 1 and June 30, 2004, all state premium taxes typically earmarked for the pension systems for Oklahoma firefighters, police officers and state law enforcement officers will be deposited instead in an education fund. The redirection is expected to produce $48,450,000 from the firefighters' fund, $19,950,000 from the police pension system, and $7,125,000 from the law enforcement officers' pension system (which cov- ers Oklahoma Highway Patrol troopers and dispatchers; and agents and other personnel of the Okla- homa State Bureau of Investigation; the Oklahoma Bureau of Narcotics and Dangerous Drugs Control; and the Alcoholic Beverage Laws Enforcement Commission). For the five following years, from July 1, 2004, through June 30, 2009, the percentage of premium taxes dedicated to the pension systems would be increased. The percentage of premium tax dedicated to the pension plans would be raised by SB 201 to 41.7 per- cent for the firefighters' system, 17 percent for the police system, and 6.1 percent for the Oklahoma Law Enforcement Retirement System (OLERS). An actuarial specialist has calculated that the higher percentages will restore the three pension systems to the same funded position they would have attained if the premium taxes had not been diverted. Also, the increase in contributions includes the principal amount plus 7.5 percent interest. After the five-year period elapses, the percentages would return to their existing levels of 34 percent for the firefighters system, 14 percent for the police pension plan, and 5 percent for OLERS. Premium taxes are assessed on all personal and corporate insurance premiums paid in Oklahoma. The funded status of the Firefighters Pension and Retirement System has been calculated at 78.4 per- cent. That means that if all of the outstanding claims against the system came due today, the system could pay 78.4 cents on the dollar. The funded status of the Police Pension and Retirement System is about 88 percent. The funded status of the Oklahoma Law Enforcement Retirement System has been calculated at 90.2 percent. Rep. Larry Roberts, D-Miami, explained that even after the revenue redirection proposed in SB 201, the funded ratios of each of the three pension plans would decline by only one percent. The Legisla- ture has pledged to reimburse all three systems, with interest, he added. As of June 30, 2002, the firefighters' pension system covered 10,868 active and 7,897 retired or dis- abled firefighters, plus 1,008 terminated but vested members; the police pension system had 4,197 ac- tive and 2,205 retired or disabled members plus 52 terminated vested members; and the law enforce- ment retirement system had 1,243 active and 985 retired or disabled members and 20 terminated but vested members. State Regents, Red Earth to host web-cast introducing unique classroom tool From State Regents (OKLAHOMA) The Oklahoma State Regents for Higher Education and Red Earth, Inc. will host a Web-cast April 22 to announce a unique history tool that brings to life the migration of 38 nationally recognized tribes that settled in Oklahoma. Red Earth, Indian Tribes of Oklahoma Interactive Journey, a CD-Rom, will soon be available for Oklahoma educators to download or purchase at minimal cost through a special Web site hosted by OneNet, the state’s telecommunications and information network for government and education. The Web-cast is free to all participants and will begin at 1:20 p.m. To participate, simply visit http://www.onenet.net/ops/redearth. The CD-Rom is targeted for the fourth through ninth grade curriculum and features seven areas of in- formation: geography, dwellings, clothing, food, crafts, communication and tribes. In each area, his- torical information is given, as well as information on the adaptation that was necessary for the tribes coming to Oklahoma. Red Earth developed the CD with the support of National Geographic, the Oklahoma Geography Edu- cation Fund, the Kerr Foundation and the Sarkeys Foundation. Red Earth is an Oklahoma City-based nonprofit organization whose mission is to promote, preserve and promulgate the rich traditions of American Indian history and cultures. 2 “Educators and students alike will find the interactive journey a project that will enhance learning. The primary objective of this project is to help students better understand the complexities of the American Indians culture in a format that will be useful and exciting,” said Lou Kerr, president of The Kerr Foundation, Inc. “The CD is the only tool of its kind that offers broad information on the tribes that comprise Okla- homa’s heritage,” said Chancellor Paul G. Risser. “The State Regents are proud to offer the services of OneNet in order to make this tool easily available for download to Oklahoma’s fourth through ninth grade classrooms.” Noted speakers during the Web-cast include Howard and Mary Ellen Meredith. Howard is a noted professor at the University of Science and Arts of Oklahoma, Chickasha, and Mary Ellen is the interim director of the Cherokee Heritage Center. Both are renowned experts in Native American culture and history and were instrumental in the development and writing of the CD. State Education Board reviews budget for rest of year By Erin Israel - Staff Writer (GIT) In a regularly scheduled board meeting held Thursday, the State Board of Education reviewed a worrisome financial report for fiscal year 2003. The report was up to date as of April 15, and it showed the evolution of this year’s budget. The origi- nal appropriation to education for FY03 was $2,041 million; however, as of April 15, cuts totaled $169.4 million. Harriot La Grone, assistant state superintendent, told the board that cuts to education have totaled more than the 7.85 percent that other agencies have received. She said the Education Reform Revolv- ing Fund revenue allocations were also reduced. As of Sept. 10, state government general revenue allocations were reduced by 4.75 percent and the Education Reform Revolving Fund revenue allocations were reduced by 10.5 percent. By Nov. 12. state government general revenue allocations were down by 6.5 percent and the Educa- tion Reform Revolving Fund revenue allocations were down by 12.9 percent, which came out to be a 8.26 percent total cut. As of March 11, state allocations had been reduced by a total of 7.85 percent, and allocations from the revolving fund had been cut by 16.23 percent. These cuts came out to equal 10.24 percent total cuts to the budget; however, because of the supplemental Rainy Day Fund allocation of $25.5 million, the total annualized cuts to the education budget currently equal 8.63 percent. Despite the fact that collec- tions were slightly down, the budget for education was not cut this month. La Grone said she was nervous that the budget could be cut again. She said there are still two more months left in the fiscal year. La Grone said final payments on all line items currently allocated have been made to districts except reading sufficiency, reading proficiency, certified salary increase, mentor teachers, homebound/special services, and special education assistance reimbursement. La Grone also showed the board a graph of past, present and future allocations to education. The graph showed that last year’s final appropriation to education came to be $1,933 million. This year’s appro- 3 priation was $1,871.6 million. The budget agreement for FY04 is $1,950 million, but La Grone said the request was $2,376,843,910. She also said she worries that the allocation could change with reve- nue shortfalls. The proposed allocation for FY04 is still less than the allocation for FY01. Career Tech Board discusses plan to soften blow of budget cuts By Erin Israel - Staff Writer (GIT) The Oklahoma State Board of Career and Technology Education met Thursday to discuss its budget and possible solutions to cuts. Sarah Mussett, coordinator of Organization and System Development for the board, proposed a volun- tary severance plan that could help save the Department of CareerTech roughly $1.1 million. She said she speculated the plan would result in a reduction of 15 to 20 employees. Those savings would be coupled with savings that the department has already generated. Pete Buswell, director, said, "This year's budget has been managed by tight control of expenses and by not replacing more than 30 people who have left the agency during the past year." Proposed severance benefits include a one-time cash payment of $5,000 plus $200 for each year of service. It would also include a payment equivalent to 18 months of the employee's current health in- surance premium as well as accumulated annual leave. Mussett said the average severance package would cost the agency $15,781. She said the agency does not want to pay more than a total of $350,000.
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