American Bank & Trust Co. has begun construction of a new corporate headquarters on a 2.5 acre property it owns near 61st Street and Yale Avenue in Tulsa. The building, totaling over 75,000 square feet, will be a state of the art smart technology facility.

"As American Bank celebrates its 40th year in business, we are excited to make this investment in Tulsa," said Frazier Henke, President and Chief Executive Officer. "This new facility will allow us to provide our current and future customers with a more convenient banking experience, while yielding additional space for bank growth."

The building, which includes a multi-lane drive-thru and parking garage, will house lending, trust and corporate offices. Additional space not utilized for bank operations will be available for lease.

Manhattan Construction Company is the builder and Davies Architects is the architectural firm handling facility design. American Bank & Trust, member FDIC, is a locally owned, full service bank and trust company with four locations in Tulsa.

Ann Barnhardt describes herself as a an “an old-school commercial hedge broker specializing in CATTLE and GRAIN.” And she just shut down her business by delivering a passionate and chilling open letter posted on her website.
 
“I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not,” she writes. And then she unloads: 

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette. [Emphasis added]

The letter caught the attention of Rush Limbaugh on Thursday.

“The letter from the hedge fund guy sounds particularly filled with vitriol, but he’s right about something,” Limbaugh said after reading an excerpt. “Corzine was that firm, and the customers’ money is gone, and it’s like $600 million of it, and it’s gone, and they’re trying to get it back, it’s a miniature Madoff in that sense. And somebody did steal that money. Somebody at that firm, which is now bankrupt and 1,100 people or thereabouts have been laid off, somebody stole the clients’ money. It is a big deal to a lot of people.”

The entire letter follows (courtesy of Zero Hedge by way of The Blaze):
 
BCM Has Ceased Operations (source)
Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
 
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
 
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
 
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.
 
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
 
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
 
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
 
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
 
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
 
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
 
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
 
As for me, I can only echo the words of David:
 
“This is the Lord’s doing; and it is wonderful in our eyes.”
 
With Best Regards-
 Ann Barnhardt

On Wednesday, the liberal Oklahoma Policy Institute (OPI) released a report challenging the findings of a May 2011 OCPA study that projects growth in the state’s share of Medicaid expenditures under Obamacare. Earlier this year, OCPA collaborated with Cato Institute senior economist Jagadeesh Gokhale, Ph.D., to undertake a comprehensive, ground-up study of the likely impact that the expansion of Medicaid under Obamacare will have on Oklahoma’s budget.

While I certainly appreciate and welcome OPI’s willingness to venture into this important conversation, their report is nothing more than reprint of absurd cost estimates by the Oklahoma Health Care Authority and the Congressional Budget Office and a summary of various studies by left-leaning organizations – the Kaiser Family Foundation, the Robert Wood Johnson Foundation and the ultra-liberal Urban Institute.

By contrast, OCPA and Cato did not pull from any other studies; instead, Gokhale started from scratch, looking at all the relevant factors that lead to Medicaid expenditure growth, analyzing data from apolitical databases (the U.S. Census Bureau, the Medicaid Statistical Information System State Datamart, the Oklahoma Health Care Authority, the Bureau of Labor Statistics, etc.) and projecting historical growth trends into the future.

The OPI report claims that OCPA’s projections – and remember, these are only projections – are based on “mistaken assumptions and methodologies.” I would start by countering that Mr. Gokhale is a Ph.D. scholar, a member of the Social Security Advisory Board and one of the most highly regarded research economists in the nation. In short, the man and his abilities are bona fide. That doesn’t mean his assumptions and methodologies couldn’t be mistaken, but as we’ll show below, they’re not.

OPI’s criticisms of our study warrant a response. Below, Gokhale offers a point-by-point response to the OPI report (quotes from the OPI report are in italics, while Gokhale’s responses are in bold).

“A May 2011 report released by the Oklahoma Council of Public Affairs (OCPA) and co-authored by Jagadeesh Gokhale and Angela Erickson of the Cato Institute departs wildly from these national and state-specific studies in contending that the Affordable Care Act will impose enormous new spending obligations on the state budget. The OCPA/Cato study concludes that “implementation of [the ACA] would increase Oklahoma’s Medicaid spending by $11.4 billion during the law’s first ten years (2014-2023), which would represent a 35 percent increase over estimated Medicaid spending” in the absence of the law. As a result, they contend that total state Medicaid expenditures in the first decade under the law would exceed $40 billion, which would clearly place huge and unmanageable strains on the state budget.”

“The OCPA/Cato Institute’s cost estimates cover a longer time period – from 2014 to 2023 – than do either the CBO and Holahan-Heady studies (2014-2019) or the Oklahoma Health Care Authority (2014-2020).”

Correct. We are interested in the full decade’s cost, beginning from program inception.

“The additional three or four years covered by OCPA/Cato includes a period where the federal share of costs for newly-eligible Medicaid enrollees de-clines to 90 percent. Still, even accounting for the inclusion of the additional years at a slightly higher state share, their conclusion that state Medicaid costs will rise by $11 billion and 35 percent due to the ACA is far out of line with the other studies that all project additional state costs of less than $1 billion and an increase of no more than 6 percent (under the Holahan-Heady “enhanced outreach scenario”).”

Based on my responses below, who is "out of line" is debatable.

“Despite the inclusion of a two-page methodological appendix, one cannot determine exactly how the OCPA/Cato Institute study arrives at its estimates based on the information in its report.”

I have authored other studies (methodology index begins on page 34) where the methodology used in the OCPA study is more detailed and illustrated with charts on historical trends that the OCPA study extrapolates. Indeed, the studies done by the Urban Institute, CBO and others base participation and cost estimates not on long-term historical trends (the correct approach), but on single year (2007) estimates. It is inappropriate to make projections on a limited subset of data, which by construction does not average across years of high and low participation and cost growth.

“Participation Assumptions: The OCPA/Cato report assumes an additional 321,000 Medicaid recipients in 2014, which is in between the number of new Medicaid recipients assumed by Holahan-Heady (357,000 under the standard participation scenario and 470,000 under enhanced outreach) and by OHCA (137,000 standard, 180,000 enhanced). The significant difference is that OCPA/Cato assumes that a very high proportion of those who will sign up for Medicaid will be “old eligibles, who will be reimbursed at the regular federal match rate (approx. 65 percent) rather than the enhanced rate (90 to 100 percent). OCPA/Cato projects that by 2014, there will be 104,000 “old eligibles enrolled in Medicaid, rising to 142,000 by 2023. By 2023, “old eligibles” will constitute 40 percent of their total increased Medicaid population of 359,000.”

Our estimates are based on the Current Population Survey data for Oklahoma, derived by applying current Medicaid eligibility rules by detailed demographic and eligibility categories. In contrast, the studies by the Urban Institute and others base their projections on behavioral "simulations," of which the methodology is sparsely described. Furthermore, these simulations were developed in 2009, well before Obamacare was enacted, and were validated only for 2007 – these simulations did not account for trends in eligibility, enrollments, benefit recipiency, etc. during the past decade which is important because estimating spending growth from a level difference versus a trend difference (with and without Obamacare) would produce very different estimates. That is, matching some features from a given historical year does not imply that the rates of change incorporated in the model’s equations would produce projections consistent with observed past trends.

From the language of these studies, the researchers looked at the “new equilibrium,” not the transition process, which must occur on the path to “equilibrium.”  That can lead to various problems – the new equilibrium may not be achieved for a long time and the transitional process may involve high costs. This approach seems inappropriate.  

In a simulation model (unlike a strictly data-based projection model, such as the OCPA study) ancillary behavioral specifications could affect the outcomes; without understanding how the model is constructed in detail, it’s difficult to say how that “black box” simulation works. Finally, although they build in reactions to things such as non-compliance penalties for individuals and employers to the individual mandate, it’s not clear how those reactions are calibrated. There’s no information in the past that would provide a means to implement it.

Indeed, there are several other questionable assumptions made in the Urban/simulation model (compromised because of data constraints, limited information about the type of health insurance plans and their features such as premiums, cost sharing. etc.) – far too many to have a reasonable degree of confidence on the simulation model’s operation.

“Their paper states: Oklahoma’s Medicaid spending will surge because the federal government will provide only the state’s regular match rate for those who were Medicaid eligible but not enrolled under pre-PPACA laws, also known as the “old eligibles”.

“But given that Oklahoma’s Medicaid program currently covers only adults who are parents of dependent children with incomes below 37 percent of the federal poverty level, how many “old eligibles are there in the state who are not en-rolled? According to OHCA, there are only 61,000 uninsured individuals who are currently eligible but un-enrolled in Medicaid – 44,000 children and 17,000 adults. This total “old eligibles” population is less than half of the 142,000 “old eligibles on which OCPA/Cato bases its projections. The surge in enrollment among the “old eligibles” assumed by OCPA/Cato goes well beyond any “woodwork effect” due to enhanced outreach efforts and the individual mandate that all other studies take into account in calculating state costs, and appears to be more of a pure “thin air” effect.”

Again, our estimates of current enrollees by detailed eligibility categories are taken from the Medicaid Statistical Information System State Datamart (MSIS), a non-partisan administrative database. The estimates of non-enrolled “old eligible” is based on the Current Population Survey data for Oklahoma. These data are weighted to provide a representative sample of the state’s population, with weights provided by the U.S. Census Bureau. In short, the figure of 61,000 uninsured individuals who are currently eligible for Medicaid but un-enrolled is inaccurate.

“Expenditure Assumptions – The OCPA/Cato brief provides very limited data to explain how it calculates Medicaid costs under the ACA. However, it starts by asserting: Currently, 23 percent of the Oklahoma population is en-rolled in Medicaid (828,000 enrollees) at an average cost of $4,195 per person. A non-disabled adult on Medicaid in Oklahoma costs nearly $4,500 annually. Both the population figure of 828,000 and the per person costs of $4,500 are overstated. Currently as of August 2011, there are just over 733,000 total enrollees in Medicaid; for the last complete fiscal year, OHCA reported an average of 707,453 members enrolled each month. The OCPA-Cato number thus overstates enrollment by some 13 to 17 per-cent, which affects their projections of the program’s cost from 2014 to 2023.”

Again, a critique based on a single year’s data point is simply not valid. Our projections are extrapolations of historical trends – the only sensible way to make estimates of future enrollments and benefit receipt. Our enrollments are based on CPS data, which is a representative sample of the Oklahoma population. It’s debatable whether our enrollment estimate is an overstatement or the other studies understate their enrollment estimates. The same remarks apply to cost estimates.  

The authors of the critique claim that we base our per person costs on the average for non-disabled adults. That’s incorrect. A careful reading of the methodology we provide would clarify that the total cost estimates are based on aggregating the product of benefit recipients and average costs, both estimated separately for each eligibility category and separately for each demographic group – by age and gender.

“Even more significantly, their average annual cost for a nondisabled adult – the population that will account for the great bulk of the growth in Medicaid enrollment under the ACA – is fundamentally flawed. It appears from the report that their baseline average cost of nearly $4,500 per adult recipient reflects the average cost per enrollee who receives Medicaid-paid health services rather than the average cost of all enrollees in the program, including the significant percentage of enrollees who receive no services.”

This claim is incorrect. It’s true that our tables show "new enrollees from among “old eligibles" resulting from Obamacare. But the average cost per benefit recipient (not per enrollee) – by detailed demographic and eligibility category – is applied to our estimate of new beneficiaries (not enrollees) who would qualify under pre-Obamacare eligibility rules. In fact, not all new enrollees from "old-eligibles" are assumed to be beneficiaries. Based on estimates from our data sources on alternative insurance coverage, we estimate and exclude from our new enrollment estimates of those individuals who would not receive Medicaid benefits because they are healthy or would obtain benefits from alternative (employer sponsored/private) insurance sources.

“The average cost of all Medicaid enrollees, including those who are enrolled but do not receive services in a given year, is much lower: for FY 2007, the average cost per adult enrollee was $2,716, or 40 percent less than the OCPA-Cato figure, according to the Kaiser Com-mission on Medicaid and the Uninsured. However, it appears that OCPA-Cato carries forward their substantially higher per-care-recipient cost across the entire population of enrollees in projecting Medicaid expenditures from 2014-2023. This substantially inflates their projections of the total cost of Medicaid expansion.”

Again, current average costs are not appropriate to apply to cost estimates for 2014-23. Those must be adjusted for expected health care cost growth – again, extrapolating from historical trends rather than basing projections on a single year’s cost estimate.

“It is worth noting that the average adult cost for current recipients in both the OCPA/Cato and Kaiser Commission data are based on a population composed largely of pregnant women, who will have relatively high per person expenditures than other adults. A good case can be made that the expansion population will be less expensive than the cur-rent population because it will include a large number of young and healthy adults.”

Our cost estimates are, again, distinguished by eligibility groups.

“In its calculations, OHCA projects the annual per person costs of those newly enrolled in Medicaid at $2,529 in FY 2014, rising to $2,916 by FY 2010. This is also some 40 percent less than OCPA/Cato’s base-line figure of $4,500 per person in 2009.”

See above.

“Compounded together, the faulty assumptions in the OCPA-Cato Institute report that exaggerate the share of new Medicaid recipients who are “old eligible,” the number of current Medicaid recipients, and the expenditure per recipient produce highly inflated estimates of the future cost of the Medicaid budget.”

“Finally, we should note that the OCPA/Cato Institute report looks only at state Medicaid costs and fails to consider any anticipated savings or offsetting revenue associated with implementation of the ACA. However, several studies at both the national and state levels that have considered a broader range of cost, savings, and revenue factors associated with the law have concluded that the cost of the health care law will be less for states and could even yield net savings. A July 2011 report from the Robert Wood Johnson Foundation (RWJF) states that, “State governments will collectively save between $92 billion and $129 billion from 2014 to 2019 because of provisions in the Affordable Care Act that are designed to reduce the uninsured population and provide federal funding for functions that, in the past, have been financed by states and localities.””

Our estimates subtract hospital cost savings form extending coverage to the uninsured. It is not appropriate to say that "state costs" would be low because of "revenues factors." Those revenues would pay for increased costs of providing for new beneficiaries and would reduce state budget deficits. But the costs would, nevertheless, be higher.  Our study was about estimating new costs from the introduction of Obamacare.

In summary:

1. The studies cited by the Oklahoma Policy Institute provide very sparse methodological detail to have any confidence in their estimates.

2. When it’s available, the methodology from these studies appears to be based on ad-hoc assumptions within a “black-box” simulation model. In contrast, OCPA’s study takes a much simpler approach, is completely data based, and makes projections based on longer-term historical trends in eligibility, enrollments, benefit receipt, and average benefits distinguished by detailed demographic and eligibility categories. They are not based on single-year averages of these variables.

3. A claim that our study is "wildly out of line" is simply not credible. Administrative records and micro-survey historical data in our report are based on representative samples of the state’s population. OCPA and Cato would counter with the opposite claim: other studies, particularly those simulation model studies such as done by the Urban Institute – wildly under-represent the likely costs of Medicaid expansion under Obamacare for Oklahoma.

Thorny issues of “intangible property” taxation and the broader structure of Oklahoma’s tax system are the focus of a major task force of legislators and private citizens. They are facing a year’s-end deadline to outline a way forward for the state in terms of adequate taxation to finance government that leaves room for a vibrant and growing economy.

The task force meets this week in Tulsa.

While there is some agreement among policy analysts and members of the
two political parties on the need to limit the potential economic harm
flowing from a legal interpretation of state taxes on intangibles, there
is striking diversity on how other parts of the tax code should be
treated, and what are adequate or fair levels of taxation.

While the item taxed may be theoretically “intangible,” the response and worry over the impact of such taxation has been tangible, indeed, for the past two years. Prior to a controversial judicial decision, so-called intangible personal property was taxed only via “unit valuations.”

However, the outcome in the state Supreme Court case of “S.W. Bell vs. State Board of Equalization” (2009) triggered the possibility that localities might begin to tax intangible property in other ways.

Ultimately that legal decision has led to a range of analysts tackling the tax system of Oklahoma, including the state’s two leading multi-issue public policy “think tanks.”

In a presentation last month to the task force at its state Capitol meeting in Oklahoma City, Michael Carnuccio of the Oklahoma Council of Public Affairs argued that intangible personal property should be exempt from ad valorem taxes. He said the state Constitution should be amended to restore the exemption that existed before the Supreme Court decision.

The conservative “think tank” executive pointed out that no surrounding states tax intangible personal property and, in fact (according to the Tax Foundation) only ten states do so. Carnuccio said allowing such taxation to take effect would put Oklahoma “at a significant disadvantage” for business location decisions, and lead many companies to relocate out of the state.

Carnuccio echoed other analysts in arguing that “the volatile, subjective and constantly changing nature” of such taxation would make it difficult to administer. Such taxes penalize and stifle research, innovation, development and capital generation, he said.

OCPA is the state’s leading free market research organization, with a mission to promote policy ideas “consistent with the principles of free enterprize, limited government, and individual initiative.”

In his presentation at the September hearing, David Blatt of Oklahoma Policy Institute warned doing away with “taxation of intangible property for centrally assessed entitles” could yield revenue loss and make assessments difficult. However, he said, expansion of the tax on locally-assessed entities might lead to substantial tax hikes and make assessment more difficult.

Blatt said the best outcome, on the “intangible” issue, would be a state constitutional amendment to restore “the status quo ante,” i.e. to limit intangible property taxation to centrally-assessed entities.

Oklahoma Policy Institute describes its mission as providing “independent, data-driven information, analysis and ideas on state policy issues.” The group is regarded as a progressive or liberal think tank.

Roots of the current discussion among the policy groups and across the broad spectrum of thought in the Legislature can be traced directly to the 2009-10 Legislature, and that hugely controversial state Supreme Court decision in the S.W. Bell case.

The September 2009 High Court ruling concluded that only items specifically listed in Article 10, Section 6A of the state Constitution are exempt from “intangible” property tax levies.

The state Chamber, in a set of talking points circulated at the state Capitol in 2010, made the case for what became S.J.R. 61 (and the current task force). The Chamber contended that the Court edict meant “that such things as trademarks, software, patents, licenses, contracts, customer lists, goodwill, etc.; are now taxable as intangible personal property.”

Implementation of the court decision had the potential negatively to impact Oklahoma’s business climate, as no locally assessed companies then paid such taxes. The Chamber, working with legislative leaders, relied on state constitutional provisions that allow “in lieu of” levies to lay the basis for a temporary alternative.

As The Chamber memo contended at the time, “Presently Oklahoma businesses are liable for a state franchise tax. By creating a small business activity tax that would be paid in lieu of ad valorem tax on intangible personal property, we can eliminate the current franchise tax and save Oklahoma businesses from a large tax increase that will inevitably result from the State Supreme Court’s ruling.”

The Chamber argued that its solution would “in the end … neither increase or decrease taxes. It is designed to be revenue neutral.  As such, there will be no effect on education, counties or others that are recipients of ad valorem taxes.”

Then-Senate President Pro Tem Glenn Coffee of Oklahoma City, the first Republican pro tempore in state history, crafted Senate Joint Resolution 61 to address the Oklahoma Business Activity Tax (BAT) code and create a way out of the widely-perceived crisis created by the court decision.

S.J.R. 61 required a levy “to be paid in lieu of any taxes on intangible personal property.” However, most businesses and individuals received an equal, corresponding tax credit, with exceptions for “S” corporations and general partnerships.

The Chamber memo said the law would focus on “the potential problem of assessment of ad valorem tax on intangible property” and require “businesses to calculate a tax of 1 percent of net revenue to be reported to the Oklahoma Tax Commission for data collection purposes only for tax years 2010, 2011 and 2012.”

In sum, the “BAT” was created in lieu of intangible personal property taxes for the years 2010-12, suspended the franchise tax, and capped the BAT at 2010 franchise tax amounts.

Perhaps of greatest significance, the bill created “a task force to review the different types of taxes imposed on businesses and individuals in Oklahoma and develop recommendations and proposed legislation to provide increased simplification and fairness to the state’s tax structure. The task force shall also have the responsibility of recommending amendments to the Oklahoma Business Activity Tax Code. The task force shall submit its report on or before January 1, 2012.”

Creation of the task force was an important achievement in Coffee’s latter days as Senate President Pro Tempore.

The panel resulting from that law met last month in Oklahoma City, and is gathering in Tulsa this week.

The Task Force on Comprehensive Tax Reform is chaired by state Sen. Mike Mazzei of Tulsa and state Rep. David Dank of Oklahoma City, both Republicans. This week’s session is Thursday (October 20) at the Spirit Bank Center, located at 105th and Memorial in Tulsa.

The intangible tax examination has led to a broader and at times introspective look at the way Oklahoman’s are taxed, and how state and local government in the Sooner State are financed.

Reuters is reporting that the unofficial gauge of human misery in the United States rose last month to a 28-year high as Americans struggled with rising inflation, high unemployment and oppressive government mismanagement.

The misery index — which is simply the sum of the country’s inflation
and unemployment rates — rose to 13.0, pushed up by higher price data
the government reported on Wednesday.

The data underscores the extent that Americans continue to suffer even two years after a deep recession ended, with a weak economic recovery imperiling President Barack Obama’s hopes of winning reelection next year.  Click here for more.

In related news, Oklahoma’s jobless rate rose to 5.9 percent in September the U.S. Bureau of Labor Statistics and Oklahoma Employment Security Commission reported on Friday.  While Oklahoma’s jobless rate was the seventh lowest in the nation, based on what some economists refer to as a "business establishment" survey, a smaller household survey shows the state’s labor force including people working and looking for work also rose last month.

According to newsok.com, both employment and unemployment rose in Oklahoma last month, which could be an indication that discouraged workers are making their way back to the job market, said John Carpenter, commission spokesman. Employment rose by about 3,000 workers (0.2 percent) between August and September, and unemployment increased by 4,600 (or 4.8 percent) during the same period.

“When they move back into the job market, that usually means the job market is getting better and they see opportunity,” Carpenter said.

Four of the 11 industries in the report posted job gains in September: construction, mining and logging, manufacturing and information. The largest monthly loss came in the leisure and hospitality industry, which was down 1,600 jobs.

Click here for more from newsok.com.