State Agencies To See Cuts If New Budget Passes

Tuesday, November 14th 2017, 9:09 am
By: Grant Hermes

A new budget plan could be the end of this year’s special session if lawmakers can agree to pass it, filling the state’s $215 million budget hole. 

According to a lawmaker who released an outline of the cuts to News 9, 49 agencies would see cuts to their budgets amounting to a total of $60 million. Among them are state agencies in charge of higher education, health care and public safety. On average, agencies would be told to slash budgets by 2.5 percent. 

According to the outline, the State Regents for Higher Education would see the largest cut at just over $17 million. Oklahoma already ranks last nationwide for spending on higher education.

The Oklahoma Health Care Authority, the agency in charge of monitoring Soonercare and other health care programs for low-income Oklahomans, would be cut by $15 million. 

Core agencies like the departments of public safety, transportation, mental health and substance abuse, and human services. Those agencies would be asked to cut between $2 million and $4 million from their budgets.

Also among the proposed cuts is a $2.7 million cut to the State Board of Career and Technology Education which oversees the state’s technical schools and 45 skill centers and adult basic education programs. The State Supreme Court would also see a $1.6 million reduction. 

The deepest cut would be levied against the Alcoholic Beverage Law Enforcement Commission, which would lose $1 million of it’s just more than $3 million budget. ABLE is in charge of monitoring alcohol law related violations including the sale of alcohol and tobacco products to minors. It’s also responsible for overseeing the modernization of state alcohol laws recently passed by Oklahoma voters. 

Those agencies not seeing cuts include the State Election Board, Commissioners of the Land Office and the Board of Trustee for the Oklahoma Schools of Science and Mathematics. The latter pair have triple and double the budget of ABLE, respectively. 

The beleaguered departments of education, corrections and rehabilitation services would also avoid cuts under the new budget along with the state Department of Health, which was recently caught in a scandal over mismanaged funds. 

Another $30 million would be taken from state funding supposed to go to the repair of Oklahoma’s roads and bridges and put towards healthcare. According to the most recent report card from the American Society of Civil Engineers, Oklahoma’s bridges received a D+ grade and state roads earned a D. 

Approximately $60 million would come from a combination of money from agency revolving funds. Totals from October show the state had roughly $1.2 billion in revolving funds, which essentially operate as savings accounts for agencies to rely on during lean budget years. A spokesperson for the Office of Management and Enterprise Services said the full $1.2 billion wasn’t actually available for lawmakers. Some is already earmarked for future agency use. 

Finally, $48 million is expected to come from a recently passed tax on the gross production of so-called “legacy” oil and gas wells. The tax isn’t so much new as is a new start date. The tax, which is an increase to 7 percent, was scheduled to start July 1, 2019. Should this plan be signed by Gov. Mary Fallin, it would start closer to a year and a half before the original start date. 

Senate leadership said Monday the deal was struck with members of the House and Fallin, a surprising announcement given recent statements by Senate leadership and Fallin about the use of one-time funds and cuts to agencies. As recently as last week Fallin told reporters she wouldn't support a bill with "draconian" cuts saying she'd keep lawmakers at the capitol until Christmas if needed. 

She and Senate leaders also balked at the notion of using one-time funds, like dipping into the state’s revolving funds, hoping to find a re-occurring solution that would help alleviate the predicted $400 million budget hole for the next fiscal year. Similar moves to use one-time money caused the Moody’s rating agency to give Oklahoma a negative rating.

Not in this new agreement, an increase in the gross production tax on oil and gas for new wells. The GPT had been the sticking point between Democrats and Republicans for the last six months. Democrats were holding out for an increase in the tax from the state’s current 2 percent to at least 5 percent. 

The latest budget proposal to include a GPT increase would have raised the tax to 4 percent. It failed by five votes last week. 

Because the new plan doesn't include a tax that hasn't already been passed, Republicans can pass it without the support of Democrats by voting a simple majority. 

This latest budget fix is expected to be heard in committee Tuesday afternoon. The earliest it could be voted on by the House is Wednesday afternoon. Lawmakers hope to send this latest budget fix to the governor's desk by Friday.