Oklahoma House GOP receives grim budget picture
State agencies may have to take stronger action than 5 percent cuts, one lawmaker says

BY MICHAEL MCNUTT Comments 4
Published: October 20, 2009

Meeting for the first time since the legislative session ended in May, House Republicans were told Monday nothing indicates state revenue will improve in the near future.

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"No discussion about a special session but we did have a pretty extensive discussion about the budget and brought everyone up to date on revenues,” House Speaker Chris Benge said after a 90-minute closed meeting with all but two of the 61 Republican House members.

State tax collections have come in 26 percent below estimates for the first three months of the 2010 fiscal year, which began July 1. As a result, state allocations to agencies and departments have been reduced 5 percent each of those months.

"There is a real possibility that we’re going to see further cuts,” said Benge, R-Tulsa. "We ought to be prepared for that and agencies ought to be prepared for that. I don’t see anything out there right now that’s going to turn that around.”

Benge said no decision has been made on a special session.

"We still have discussions and meetings planned with the governor and (Senate) pro tem to talk about that,” he said.

Legislators also can tap into the state savings account, the Rainy Day Fund, or use some of the available federal stimulus money. The Rainy Day Fund has nearly $600 million, and the state has about $600 million in available stimulus funds.

However, legislators were hoping to use that money for the 2011 fiscal year budget. Tax revenue for the state general fund has come in below estimates by nearly $400 million this fiscal year.

Legislators return in regular session in February. Legislative action is needed to tap into the Rainy Day Fund or to allocate more federal stimulus money.

"Unless revenue dramatically improves, we’ll have to take a different course of action than a 5 percent reduction,” said House Appropriations and Budget Committee Chairman Ken Miller, R-Edmond. "That course of action’s not decided, but it is being discussed amongst the leadership.

"We hope to make it into the legislative session without convening in special session, but certainly if the leadership — the speaker, the pro tem and the governor — determine a different course of action, we stand ready to take action.”

The budget outlook for the 2011 fiscal year appears uncertain.

The state has used most of its available cash reserve funds for this year’s budget and to help meet revenue shortfalls at the beginning of this fiscal year.

Low natural gas prices and the corresponding reductions in drilling and production are blamed for the continued slump in state revenue, House Republicans were told. Low output from the state’s energy sector has a significant ripple effect on other business activity, resulting in severely reduced revenue from income and sales taxes, as well.