Cuts will need to be made in agency budgets in the next fiscal year as the state sees a decrease in money available to spend, Gov. Brad Henry said. The state Board of Equalization met Monday to certify projections of a 4.4 percent drop in the state budget — from $7.1 billion to $6.8 billion — for the 2010 fiscal year, which begins July 1. "We’re all in this together,” Henry said after the meeting. "Every agency is going to have to tighten their belts.” Lower prices for oil and natural gas mean the state gets less money from the gross production tax on the two commodities. Slips in individual income tax collections and motor vehicle tax collections put less money in state coffers. Henry will use the projections to make his budget proposal. Revenue projections will be revised in late February, with lawmakers using the data to set agency budgets. "It will be difficult to raise teacher pay or state employee pay,” Henry said. "It’s going to make it tough on many agencies after having a standstill budget this year.” Agencies should be prepared to suggest cuts and increase efficiency. But Henry said he doesn’t expect furloughs or job cuts. "It’s very likely that we’ll make some surgical cuts,” Henry said.
We’re all in this together. Every agency is going to have to tighten their belts.”
Henry will guard Rainy Day FundTax breaks aren’t likely, the governor said. "We will have to look at those with a microscope and have to know exactly what the impact will be,” Henry said. Despite the economic outlook, Henry said he will continue to protect the Rainy Day Fund. When Henry came into office in 2003, the state was facing a $700 million budget shortfall and a Rainy Day Fund with $72 million in it. The Rainy Day Fund now has about $700 million. "It makes sense to conserve our Rainy Day Fund,” he said. "Even though there will be many people who will call on tapping the Rainy Day Fund, never say ‘never,’ but my position is going to be consistent.”