Budget & Tax

Be Prepared: Federal-Funds Transparency Makes Sense for Oklahoma

August 1, 2015

Patrick B. McGuigan

A proposal to prepare the government of Oklahoma for emerging federal budget crises fell short in the 2015 session of the state Legislature. But it wasn’t for lack of trying, or support.

Some details follow. In a summary prepared by Democratic House media relations staffer Mike Ray, provisions in House Bill 1748 were sketched. State agencies would be required “to report each year the amount of federal funds they receive, the programs for which those funds are used, and to rank the federal funds according to the agency’s reliance on that source of money.”

The proposal from state Rep. Tom Newell, R-Seminole, and Sen. Greg Treat, R-Oklahoma City, would have required a description from each agency of actions required by the feds “as a condition of receipt,” as well as actions forbidden as a condition of acceptance, and prohibitions on businesses receiving funds.

This idea, if implemented, would have helped legislators make wiser decisions, and would have increased the awareness of federal funding issues among citizens in general, and the news media in particular.

It falls along the lines of the good old Scout Motto: Be Prepared. Former House Speaker T.W. Shannon first advanced the idea during his tenure in the Legislature. It is driven by federalist sensibilities, and remains popular among conservatives at the Capitol.

Good ideas are not limited to conservatives. In 2013, Ed Allen, president of the American Federation of Teachers (AFT, AFL-CIO) local union in Oklahoma City, had his own version of this prudential wisdom. More empathetic than most public education leaders to parental aspirations for choice, Allen has participated in some tough personnel decisions within the district, while sticking up for the embattled teacher pool, which faces often shocking discipline challenges in many schools.

Allen reflected, “Our entire city is changing before our very eyes with one glaring exception—our school district.” At an editorial board meeting at The Oklahoman, he said public school leaders would be well advised to “turn down some federal money” rather than sing to the king’s tune in every instance.
Interesting, that.

Under the Elementary and Secondary Education Act (ESEA) of 1965 and its policy progeny, including No Child Left Behind, public school systems across the land must dance to the piper’s tune in return for federal monies.

Congress established an “accountability and reform framework,” as analyst Brandt Redd put it, one which the states have more or less accepted without demur. As he observes, “In theory, states have the ability to opt out ... of federal funding. In practice, no state is willing to give up approximately 11 percent of their educational budget.”

In case you missed it, take note: States allow the federal “tail” of 11 percent to drive the 89 percent “body” of state and local spending on education. To be sure, House Bill 1748 would have broader implications, but its most efficacious impact could come in schooling.

The Newell-Treat bill passed the Oklahoma Senate 39-1 and the House 69-19.

But Gov. Mary Fallin vetoed it, asserting it had “new and onerous reporting obligations” that would amount to “a step back from the significant gains recently made in streamlining state government.”

In the latest budget appropriations at the Capitol, signed into law by the chief executive, that “streamlined” government grew by $17 million. In what many described as a year of crisis, elected officials decided to spend more, not less. This is a statement of fact, not opinion.

In order to spend more, elected officials relied on “raids” of special funds, a variety of budgeting maneuvers, and, to be sure, on federal funds. The Newell-Treat proposal was an Oklahoma version of an idea that has advanced in a few states.
Fallin’s veto defied some notable popular headwinds on federal funding. In a public opinion survey conducted early this year, SoonerPoll found 76.7 percent support for the practical idea that states ought to make preparations “in case federal funding … is reduced due to budgetary challenges in Washington, D.C.”

That’s not all—87.3 percent of Oklahomans surveyed believe “state government spending of federal dollars should be more transparent.” The same survey asked whether legislators should “increase, decrease, or maintain the level of influence the federal government has” over state policy. Roughly two-thirds (64.9 percent) chose “decrease.”

I am somewhat moderate when it comes to federal spending. In some cases, it might be a wise policy choice to accept federal money. But not in every case, including in those instances where it erodes or destroys state and local management of state and local systems. And information is a good way to separate wise use of federal resources from its opposite.

And isn’t discretion the better part of valor? Isn’t it best to account, at every step along the way, for the impact of federal money on state policy, and to be prepared with cost accounting and real-time knowledge about the good, the bad, and the ugly of government spending?

Numbers like those in the SoonerPoll, coming from the distilled reactions of fellow Oklahomans, remind me of the response among Americans of all political stripes during the 1984 presidential campaign. Incumbent Ronald Reagan’s reelection committee broadcast an advertisement that “starred” a bear wandering through a wooded area.

The critter was not acting in a threatening manner—but then again, a big bear doesn’t have to act threatening. After all, it is a big bear. In those days, and in memory still, the bear was an apt symbol for the Soviet Union.

Elite liberal critics derided the ad, which appeared in versions ranging from 30 seconds to a full two minutes. As was usually the case with the Gipper’s critics, they underestimated the political strength of symbols, the wisdom of Reagan, and the trust voters put in the man’s substance.

The advertisement’s voice-over intoned: “For some people, the bear is easy to see. Others don’t see it at all. Some people say the bear is tame. Others say it’s vicious and dangerous. Since no one can really be sure who’s right, isn’t it smart to be as strong as the bear? If there is a bear…”

The visual ended with the bear, which had lumbered through the woods alone, coming to stand a few feet away from a lone hunter, an obvious stand-in for our country.

I’m not equating the federal government to the communist bear. I am comparing the unwieldy and seemingly uncontrollable annual deficits and the crushing federal debt burden to … well, something that will destroy us if we are not prepared.
No rhetorical queries on this one: There is a bear.

If we are not prepared to meet the budget bear wisely, vetoes and politics will matter for little in the fiscal Armageddon.
Isn’t it a good idea to be prepared for the federal spending crisis, if there is a spending crisis?

Repeat the question.