Whoever is elected governor this year will have to deal with leading Oklahoma out of its budget woes.
And the new governor will have to do it without the help of about $1.2 billion in reserve funds — a state savings account gradually built up to nearly $600 million and a similar amount in federal stimulus funds — that legislators and Gov. Brad Henry have available to draw from this session.
Lt. Gov. Jari Askins and Attorney General Drew Edmondson, both Democrats, and state Sen. Randy Brogdon and U.S. Rep. Mary Fallin, both Republicans, said they’re prepared to resuscitate Oklahoma’s ailing economy.
Voters will elect their political party nominees July 27; Oklahoma’s 27th governor will be elected Nov. 2.
Henry cannot seek a third successive four-year term.
He faced a budget hole of about $700 million and had only about $70 million in the state’s Rainy Day Fund in 2003, his first year in office.
Rising energy prices in subsequent years led to record revenues for the state, only to see the state’s economy turn flat in 2008 and nosedive in 2009 because of falling energy prices and the fallout from the national recession.
It’s likely most of the Rainy Day Fund, the state’s savings account, and all the federal stimulus funds will be used to take care of an estimated $530 million deficit at the end of this fiscal year as well as to fund agencies and operations in the 2011 fiscal year, which starts July 1.
The state’s revenue failure this year is estimated at nearly $730 million, but 5 percent and 10 percent cuts in monthly allocations to state agencies have trimmed the amount to about $530 million.
States aren’t targeted to receive additional federal stimulus funds for the 2012 fiscal year, which will start six months after the new governor takes office.
Edmondson: ‘Brutal’ year
Edmondson said, "2011’s going to be brutal.” Tapping the Rainy Day Fund in the upcoming session will be "unavoidable,” he said.
"The question then is how far into the Rainy Day Fund will they go,” he said.
About $450 million is available for legislators to spend to make up for declining revenues this fiscal year; legislators can tap the remaining $150 million by declaring an emergency.
"I would anticipate the next governor would have little remaining in the Rainy Day Fund ... and will go into office halfway through a fiscal year that’s at best a standstill and likely another year of decline,” Edmondson said.
"The immediate task of the next governor is to stimulate the economy, to grow jobs and to bring growth revenue into the state coffers,” he said. "There is no other source at least on the horizon to meet the needs of state government if we don’t grow the economy.”
Estimates show legislators this session will have about $1.3 billion less than last session to spend. The $5.3 billion that legislators are projected to have available to spend next year is the lowest since the $5.36 billion budget for the 2005 fiscal year.
Brogdon: Cut the budget
"The only logical and prudent thing to do is to cut the budget,” Brogdon said.