$50 Million Revenue Estimate A Mystery As Those Involved Contradict Each Other, Point Fingers

There is a mystery that still hangs over Governor Henry's plan to raise $50 million in new revenue from a statewide system of highway traffic "spy" cameras to catch insurance scofflaws and the mystery is this: Why does no one seem to know for certain where that income estimate came from?

It's an important question because if the estimate is not accurate, there's a hole in the revenue side of the budget that will have to be filled some other way. In addition, the perception appears to be growing that despite years of planning, the system was placed for bids with far too many unanswered questions.

There also appears to be information about the system itself that contradicts other information. For example, the governor's budget suggests 220 of the cameras. Yet a DPS document outlining specifications mentions only "12 to 20" cameras. Questions from vendors, and DPS responses, indicate confusion in other areas of the plan as well ranging from how the system will be administered to where fines would be paid.

The McCarville Report Online has asked everyone in a position to know where the estimate came from after noticing that the Department of Public Safety, charged with putting information together for bidders and in overall charge of the plan, responded "Unknown" to questions from several bidders about the source of the estimate, and how it was derived.

The Governor's Office Says The Treasurer Helped Put The Estimate Together; The Treasurer's Office Says The Governor, Senate President Pro Tem and House Speaker Put It Together; The House Speaker Says It Came From The Governor; An Expert Says The Estimate Is 'Probably Worthless'

TMRO first asked Governor Henry's spokesman, Paul Sund, where the estimate came from. He replied, "I think OSF budget division and Scott's (Meacham) staff put that together after looking at what some other states were doing."

But Treasurer Scott Meacham, via Deputy Treasurer Tim Allen, said, "the revenue estimate was based on responses to a DPS RFP (Request For Proposal) and was reduced (from an original estimate of $95 million) by agreement between the Governor, Pro Tem and Speaker...."

Senate President Pro Tem Glenn Coffee, on vacation in Arkansas, apparently could not be reached by his staff.

House Speaker Chris Benge, spokeswoman Jennifer Monies said, "just indicated that number came from the governor. Other than that, he is unaware of the source."

Former Rep. Wayne Pettigrew, a national officer of InsureNet, one firm interested in the state contract that also retains Barry Switzer as a consultant, followed closely the development of information about the new system.

He tells TMRO, "As far as I know, it is 6 months anticipated revenue from a vehicle insurance verification system that has a national database. I believe it assumes a 24% uninsured rate on 70% of the vehicles (from Oklahoma) and a 70% collection rate on the fines levied. I do not know what the anticipated uninsured rate is for the out-of-state vehicles. I think the RFP from DCS (Department of Central Services) went to a single state type system for the database (not the InsureNet one) and so this number ($50 million) is probably worthless now."

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The $50 Million Question: Origin Of Governor Henry's Highway Traffic Camera Revenue Estimate

Governor Henry's budget hinges, in part, on the generation of $50 million in new revenue from fines levied against uninsured motorists nabbed by a new statewide system of highway traffic cameras, but there seems little agreement today the system will generate that sum and the origin of the estimate itself is in question.

It seems no one knows for certain where that revenue estimate came from. One of those who has followed development of the system says the $50 million figure "is probably worthless now."

The Department of Public Safety, which handled the requests for information (RFI) and the requests for proposals (RFP) from bidders, flatly says it doesn't have a clue about the estimate. "Unknown" is how DPS responded to two questions from potential vendors who asked upon what basis the estimate was made.

Paul Sund, Henry's director of communications, told The McCarville Report Online, "I think OSF budget division and Scott's (Meacham) staff put that together after looking at what some other states were doing."

A Tuesday inquiry to the treasurer's office has not yet been answered.

Former Rep. Wayne Pettigrew, a national officer of InsureNet, one firm interested in the state contract, followed closely the development of information about the new system. He tells TMRO, "As far as I know, it is 6 months anticipated revenue from a vehicle insurance verification system that has a national database. I believe it assumes a 24% uninsured rate on 70% of the vehicles (from Oklahoma) and a 70% collection rate on the fines levied. I do not know what the anticipated uninsured rate is for the out-of-state vehicles. I think the RFP from DCS (Department of Central Services) went to a single state type system for the database (not the InsureNet one) and so this number is probably worthless now."

It is estimated that more than 750 motorists without insurance would have to be fined per day to produce $50 million for the state given that the vendor would be paid 25 to 30 percent of the fines collected for administering the system. DPS reports there are 3.9 million vehicles in the state with 3.5 million of them being properly insured. That means there are 400,000 uninsured vehicles; at 750 per day, 273,750 fines would be levied in the first year. That appears to indicate that even if the system produced $50 million in the first year, revenue would drop dramatically in year two and following years unless huge numbers of additional vehicles go uninsured. Those in the industry say that's unlikely and, using this analysis, they view the future revenue stream from the system as tenuous unless huge numbers of out-of-state vehicles are included.

The initial plan, apparently, was for a system that would scan out-of-state license plates as well to catch those uninsured motorists and Governor Henry cited that as a large part of the revenue stream and the Department of Central Services Request For Proposals (RFP) sent on behalf of DPS does mention the multi-state function, as does a question-and-answer document on the DCS website.

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Henry's Spokesman Denies Auditor Search

By The Oklahoman's Tony Thornton on www.newsok.com ~ Governor Brad Henry's office is taking issue with a higher education official's statement concerning a potential vacancy in the state auditor's job.

Paul Sund, Henry's communications director, said no one representing Henry contacted Greg Sawyer about possibly filling state Auditor and Inspector Jeff McMahan's position.

A federal grand jury indicted McMahan and his wife Friday, accusing them of taking bribes from southeast Oklahoma businessman Steve Phipps in return for favorable treatment.

The indictment prompted some legislators to call for McMahan's resignation. Henry said McMahan should step aside during the criminal proceedings.

Sawyer, an associate vice chancellor for higher education, told The Oklahoman Friday he was approached weeks or months ago about replacing McMahan if the job came open. On Friday, he wouldn't name who contacted him, saying only it was someone representing the governor.

"We have contacted no one about the auditor's job, and anyone who suggests otherwise is not telling the truth," Sund wrote in an e-mail Saturday night.

"We are quite disappointed that someone would distort the facts and say that we contacted him about taking over the auditor's post when that never happened," Sund said.

Sawyer said Sunday the person who contacted him months ago about the potential opening was Tony Hutchison, Henry’s state finance director.

Sawyer said Hutchison told him, “If you’re interested, you need to let somebody know.”
Sawyer said he then spoke twice to Gerald Adams, Henry’s chief of staff.

“I don’t want to get in a debate with Paul Sund or anybody. ... I understand they don’t want to make it look like they’re pushing Jeff out,” Sawyer said.

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Daxon Challenges Henry On Vacation Details

Oklahoma Republican Party Chairman Tom Daxon said Friday he is asking the governor's office to disclose specific and detailed information about the chief executive's Spring Break vacation, where he traveled and stayed, how much the trip cost, and who covered the costs of his trip.

Daxon said that during this crucial week at the state Capitol – while legislative leaders have announced and overwhelmingly passed a bipartisan state budget agreement – the governor has apparently been out of state on vacation.

"This week has been an important time for the people's business," said Daxon. "And while the governor has been out of pocket, his financial guru Scott Meacham has been making threats about using the veto pen to shoot down the bipartisan budget. I'm hoping the governor will return next week and that cooler heads will prevail. He should also address questions about where he has been."

All week, Daxon said, the governor's staff members have refused to answer detailed questions about the governor's trip. Friday's edition of the Tulsa World reported the governor's staff was "mum" on the chief executive's whereabouts.

And earlier in the week, the governor's communications director, Paul Sund, responded acrimoniously when Senate Co-President Pro Tempore Glenn Coffee mentioned that the governor appeared to be out of state on a Spring Break trip. "Paul Sund has flippantly swatted away questions about the governor's trip by saying such inquiries are 'cheap shots.' I think the governor and his family, like many other families, should be able to take a vacation, especially during the Spring Break period," said Daxon. "But I also think the public has a right to know about his whereabouts when others are speaking on his behalf."

Daxon noted that Sund's refusal to answer questions about the governor's vacation comes close on the heels of "Sunshine Week" – a national event during which most media outlets focus on the need for openness from government officials. "I'm sure the governor's communications staffers will claim that I'm just posturing by asking these questions," said Daxon. "While I acknowledge that I'm in a partisan position as the Republican state party chair, I'm also asking serious questions that deserve respectful and detailed answers."

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