Governor Stitt may know a lot about private business, but he and a host of Oklahoma legislators have a lot to learn about state government.
Exhibit 1 is Senate Bill 271, which imposes requirements for “the disclosure of federal funds and analysis regarding reliance and costs for compliance.” The state Senate passed this measure, 31-13; the state House of Representatives endorsed it, 83-9; and the Governor signed it on April 29. The legislation goes into effect Nov. 1.
SB 271 requires all state agencies to annually produce, and post on an internet website “maintained by or on behalf of” the agency, a report on all federal funds “under the control of” that agency.
The information required must include a description of:
• any action required to be taken by the state agency “as a condition for the receipt” of federal funds;
• any action prohibited to be taken by the state government entity “as a condition for the receipt” of federal funds;
• any action required to be taken, or any action prohibited from being taken, by any individual or any “lawfully recognized business entity or other entity” as a condition “for the benefits purported to be conferred ... as a result of the use” of the federal funds.
Further, the report must include “the programs for which the federal funds are used, by distinct categories,” and must “identify the priority or rank of the federal funds in descending order, with the funding source the agency relies on to the greatest extent listed first and the funding source the agency relies on to the least extent listed last.” In view of those requirements, consider the State Board of Education. It has 28 programs listed under just one category: “support of public school activities.”
The sole exception to the mandates in SB 271 is that any agency which receives federal funds that require any level of security clearance in order to administer those funds will be exempt from the disclosure requirements. A fiscal analyst for the Legislature advised the lawmakers that SB 271 will not have “any significant additional impact on the budget or state appropriations.” Don’t believe it.
According to the state’s Comprehensive Annual Financial Report prepared by the Office of Management and Enterprise Services, total federal funds spent by Oklahoma State agencies have risen dramatically. In the fiscal year 2004, federal funds to state agencies totaled $4.3 billion; a decade later federal funding to the state had climbed to $6.7 billion.
The previous year Oklahoma State and local governments received almost $7.5 billion in federal funds, according to the U.S. Census Bureau. Public records show that at least 32 state agencies received federal funds at some point during the last three fiscal years, and that aid ranged from a few thousand dollars up to several million dollars; two state agencies received more than a billion dollars in federal aid. Some agencies receive nearly all of their funding from legislative appropriations of state funds, but the budgets of several state agencies are comprised largely of federal funds.
In Fiscal Year 2017, the Oklahoma Health Care Authority, this state’s Medicaid agency, got a state appropriation of $991 million to augment the $3.2 billion in federal aid it received, and the Department of Human Services received $651.5 million from the Legislature and $1.49 billion in federal assistance.
That same year the State Health Department received almost $210 million in federal aid; the Department of Mental Health and Substance Abuse Services, $35.6 million; Department of Veterans Affairs, $96.6 million; the State Board of Education, $731.65 million; Career- Tech, $4 million; State Regents for Higher Education, $6.4 million; state Department ofEmergency Management, $39.7 million; Officeof Juvenile Affairs, $17.9 million; Oklahoma Water Resources Board, $5.8 million (FY ‘18);state Department of Libraries, $2.77 million;Department of Public Safety (parent agency of the Oklahoma Highway Patrol), $20 million; Oklahoma Department of Transportation, more than $600 million for state/local road/ bridge repairs/replacement; Department ofRehabilitation Services, $109.6 million; Officeof Disability Concerns, $125,000; the Okla- homa Conservation Commission, $26.7 million (FY ‘19); Oklahoma Military Department, $32.5 million; Oklahoma Department of Corrections, $1.7 million; Oklahoma Bureau of Narcotics and Dangerous Drugs Control, nearly $852,000; Board of Medicolegal Investigations, $47,600; Oklahoma Arts Council, $743,000.
To comply with the requirements of SB 271: somebody in those agencies will have to specify what federal funds were received and for what purpose, and what action was taken or was prohibited as a condition of utilizing those funds; somebody will have to rank the priority of those funds to each particular agency’s operations; somebody will have to compile all of that information and prepare a report about it for the Legislature and the Governor; and somebody will have to post all of those reports on the internet.
Furthermore, if history is any guide, most if not all of those reports will be read by legislators about as frequently as an encyclopedia is.
The edicts in SB 271 will take time to accomplish, and for several agencies, they will require the time and effort of multiple employees. Don’t be surprised if, during the next budget cycle, several agencies request additional FTE in order to meet the new mandates. So much for efficiency.