Oklahoma agencies have $1.2 billion stashed away in revolving funds

As lawmakers grapple with an estimated $500 million shortfall in the Oklahoma budget, agency revolving funds receive little scrutiny in budget discussions, fiscal experts say.
BY PAUL MONIES pmonies@opubco.com Published: February 27, 2011

Copyright 2011 - The Oklahoman

As Oklahoma lawmakers and Gov. Mary Fallin grapple with an estimated $500 million shortfall in the annual budget, state agencies have a combined $1.2 billion stashed away in their revolving funds.

Leading the way is the Transportation Department's revolving fund for county roads and bridges, which had more than $159 million. The University of Oklahoma Health Sciences Center had almost $63 million in its education and general revenue revolving fund. The boll weevil eradication revolving fund had a balance of $2 million.

At the other end of the scale, the minority business development revolving fund at the Commerce Department had just $1. The Agriculture Department's junior livestock auction revolving fund totaled $43.

Those figures are from the Office of State Finance, which provided the December balances for the last three years for more than 500 revolving funds at state agencies. The information was collected via an open records request by The Oklahoman.

Revolving funds are not part of the annual appropriations from the general revenue fund and are usually funded by fees or other sources, said state Comptroller Brenda Bolander. Depending on how they were set up, some revolving funds have designated functions and can only spend money on certain activities.

Other revolving funds might collect fees for one purpose and divert a portion of those fees to the state's general revenue fund, Bolander said. That's how revolving funds work at some of the regulatory boards such as the accountancy board.

Lawmakers tap revolving funds

Still, spending from many revolving funds is at the discretion of each state agency. Lawmakers also tap revolving funds to make up shortfalls in other agencies. That can pave the way for some interesting accounting games during budget negotiations, said Jonathan Small, fiscal policy director at the Oklahoma Council of Public Affairs, a conservative think tank based in Oklahoma City.

"The revolving funds are where a lot of this discussion needs to be had," said Small, a former budget analyst at the Office of State Finance. "That's a whole lot of money for us to be hearing that oxygen masks are going to be taken off children and old people are going to be lying in the street."

Many times, the revolving funds are an afterthought in budget discussions, Small said.

"In the budget hearings, most of the discussion is about what appropriations the agency needs and not necessarily their other funding sources," Small said. "A lot of times the members don't have a clue about what's in an agency's revolving fund. The agency knows way more about what's in there and what's spent than the legislator does."

The money from the wire transmitter fee revolving fund at the Oklahoma Bureau of Narcotics and Dangerous Drugs Control was central to recent allegations of bribery against former Democratic state Sen. Debbe Leftwich and Rep. Randy Terrill, R-Moore.

Prosecutors allege Terrill won legislative approval last year to move money from the wire transfer fee fund to the state medical examiner's office to pay for a new position that was offered to Leftwich as a bribe. In exchange, Leftwich would agree not to run for re-election to her Oklahoma City senate seat and clear the way for a Republican candidate backed by Terrill, prosecutors charged.

Look at state agency revolving fund balances for more...

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