Oklahoma Legislature Finalizes Regular Session

Associated Press

OKLAHOMA CITY -- The Oklahoma Legislature adjourned its 2010 regular session Friday with a focus on the same thorny issue that lawmakers faced when they convened four months ago -- a massive state budget shortfall.

The state House and Senate took up dozens of bills on the Legislature's final day, including several that put the finishing touches on a $6.7 billion budget for the fiscal year beginning July 1. Legislative leaders and Gov. Brad Henry hammered out details of the budget deal last week.

Lawmakers convened the session Feb. 1 while facing a $1.2 billion shortfall in the upcoming year's budget, the result of low energy prices and faltering state and national economies.

Officials have worked to fill the budget hole with a combination of state agency budget cuts, suspension of tax credit programs, fee increases, and appropriations from the constitutional Rainy Day reserve fund and federal economic stimulus money.

Henry characterized the budgeting process as "very difficult and very challenging" as the Legislature wrapped up its work.

"It was painful at times," Henry said. "We had to make some very, very difficult and painful decisions in the budget negotiations."

The governor, who is serving the last year of his second and final term due to term limits, said he was proud of officials for shielding core services like education, health care and public safety from the deepest cuts.

"I think it was a very difficult, challenging session, but I'm very proud of how we got through this session, from substantive policy to the budget. We've done some good things," Henry said.

Republican legislative leaders seemed to agree with the Democratic governor.

"With the revenue decline and the budget picture the way it looked going into this session ... it was going to be very, very tough," said House Speaker Chris Benge, R-Tulsa. "I think we've taken a very difficult situation and made the best of it."

"We campaigned on bringing long overdue reform and fiscal responsibility to state government," said Senate President Pro Tem Glenn Coffee, R-Oklahoma City, "and while we're not claiming to have finished the job, we believe we got a strong start."

Lawmakers were required by the state Constitution to adjourn by 5 p.m.

In the Legislature's final hours, lawmakers gave final approval to a measure that doubles fees for moving oversize and overweight vehicles on state roads. The measure would raise about $16 million a year and help balance next year's budget.

They also enacted last-minute changes to several tax credits that had been targeted for suspension. Lawmakers deferred for two years tax incentives for investments in new jobs and rehabilitation of historic buildings. A one-year deferment was allowed for certain wind-industry investments.

The deferment means the state still must eventually pay for the tax credits.

"These do have implications out in 2013, 2014 and 2015," Coffee said. "I think basically everybody is gambling that hopefully in those outer years we're going to see a recovery and maybe the cash flow to help address that."

Lawmakers also agreed to extend a tax credit for coal production after a two-year moratorium.

Lawmakers passed legislation asking voters to decide on an increase in the size of the Rainy Day fund. Currently the fund holds up to 10 percent of funds certified for the general fund in the prior year. The ballot measure will increase that to 15 percent.

The fund contained about $600 million at the beginning of this year but has been tapped to fill holes in the state budget. Lawmakers have about $100 million left from the fund to spend next year.

Lawmakers also created an Energy Stabilization Fund, similar to the Rainy Day fund, that would remove volatility from oil and natural gas tax collections and help stabilize the budgeting process.

That bill, a legislative priority for Benge, would establish a three-year average of gas and oil collections by the state that would be available for appropriation.

Whatever is collected above that amount would be set aside in the stabilization fund for distribution when prices are low. Benge said the fund would become active in 2015 to help mitigate budget shortfalls like the one expected next year.

Lawmakers hesitated over some measures drafted to cut state government costs, including one that would have consolidated 10 state agencies into others and made another agency self-funding to save an estimated $5 million.

Agency officials and some lawmakers opposed the measure, saying it would diminish the effectiveness of the consolidated agencies. Benge pulled the measure from consideration in the Legislature's final hour when it appeared headed for a lengthy debate while many other bills awaited action.

The GOP-dominated Legislature touted several policy accomplishments during the four-month legislative session, including legislation that makes sweeping changes in the state's workers' compensation system. Supporters said it would reduce the cost of the system, lower workers' compensation insurance rates and provide better care for injured workers.

Lawmakers pushed through other proposals dear to conservatives, including a measure authorizing legislative leaders to hire an attorney to challenge the federal health care overhaul; other bills place new restrictions on abortion. Henry vetoed several of the abortion bills but the measures became law after the Legislature overrode the vetoes.

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