State Revenue Still Coming Up Short, Budget Cuts Continue
By Dave Jordan, NEWS 9
OKLAHOMA CITY -- October state revenue collections continue to show a decline, leading state leaders to order more budget cuts.
State Treasurer Scoot Meacham said it's the tenth month in a row revenue is below expectations, leading to another five percent reduction in monthly state budget allocations. The five percent cuts will continue through June because of declining revenue.
The Department of Corrections is feeling the pinch. It receives the majority of its funding from the state. Spokesman Jerry Massey said the D.O.C's 4,700 employees could see furloughs as early as March if necessary funding doesn't come through.
"We've got to make up about $22 million in the funding shortfall. Obviously, we've got hiring freezes and we've taken money from canteens," Massey said. "We're hopeful they'll see us as an issue that needs to be addressed through additional funding."
However, in spite of the negative numbers, the state treasurer hopes the worst numbers are behind us.
"I am cautiously optimistic that October collections could show our economy has finally bottomed and we may start seeing some recovery in actual revenue collections," Meacham said in a press release. "While the shortfall for the fiscal year prior to October was 26 percent below the estimate, October’s shortfall was 18.2 percent."
Meacham estimated there was a $600 million gap in the budget. So far, $155 million was used from other state funds to avoid a complete economic collapse. However, that money must be repaid by June 30th and Rainy Day funds will have to be used.
Governor Brad Henry said the decline is expected given the state of the economy and expects state leaders will have to use the state's Rainy Day Fund.
"Those reductions have already forced a number of painful actions, from cuts to the senior nutrition program to furloughs at critical agencies such as the Department of Corrections," Henry said. "To prevent deeper cuts and protect basic core services in education, public safety, health care and a variety of other critical areas, I believe we will have to tap the Rainy Day Fund. Oklahoma voters created the state savings account to protect vital services in times of economic emergency, and there is no question we are facing such an emergency."
Meacham said positive national economic news could mean Tuesday’s revenue report is showing the worst of the recession in Oklahoma and recovery will begin in a few months.
The preliminary reports show General Revenue Fund collections in October were $374.4 million. That amount is $116.1 million below the prior year and $83.3 million below the estimate.
Low oil and natural gas prices on top of the depressed economy have contributed to revenue declines.
Since the start of the fiscal year, the state has cut about $21 million using the 5 percent budget reduction.