By Kirsten McIntyre, NEWS 9

OKLAHOMA CITY -- It's a new year but unfortunately, the problems of old linger behind. As Oklahoma heads into this new decade, the past is part of the future.

The state budget crisis looms overhead. Lawmakers return to work at the state Capitol at the end of the month and when they do, they have their work cut out for them.

A massive budget shortfall will force some tough decisions in the new decade.

"This is the deepest shortfall that we've experienced in state government and it even surpassed what we saw in the oil bust," State Treasurer Scott Meacham said.

Meacham estimates the shortfall at nearly three quarters of a billion dollars for the fiscal year that ends this June. A sluggish economy and lower-than-expected oil and gas revenues are to blame.

"The cuts that have implemented were necessary and they're not going to go away," said Meacham. "Agencies are going to face cuts."

Those budget cuts started last summer and were the first sign Oklahoma wasn't weathering the recession as well as believed. But even then the mood was still optimistic.

"The problems in Oklahoma you can say, gosh, we're having to cut 1.42 percent out of one month's allocations," said Meacham. "That's nothing compared to what other states are seeing."

The cuts started small but have now increased to 10 percent across the board for all state agencies.

The state's education system is seeing cuts.

"We already have problems getting new books and computers and everything else that we need," Norman High School student Amanda Herr said.

Prisons are also seeing cuts.

"Yes, people should be concerned if we don't have places to house inmates, if we don't have enough staff to watch them," Spokesperson with the Department of Corrections Jerry Massie said.

Yet, in spite of the gloom and doom the governor maintains Oklahoma is in a better place than most states.

"We're going to have to use Rainy Day funds and we're going to have to use stimulus dollars to get thought this and we're trying to look at this as a big picture for both the 2010 budget and the 2011 budget," Governor Brad Henry said.

The governor has said he's in ongoing talks with legislative leaders on how to spend the money and so far, he doesn't think a special session will be needed.

Besides trying to get through the end of this budget year, which ends in June, state leaders are also looking ahead to 2011.

Already, they know they'll have about $1 billion less to spend.