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Oklahoma budget negotiators kept 2012 fiscal year in mind

Even though the Democratic governor and GOP legislative leaders won’t be at the state Capitol next year, they worked to leave some funds available for the next governor and House and Senate leaders.

BY MICHAEL MCNUTT Published: May 23, 2010
"Even though we’re not all going to be here, we realized it’s our responsibility to try to manage that process as best we can.”

Budget negotiators dipped into the Rainy Day money set aside for 2012, leaving $100 million for the next governor and legislative leaders of the next legislative session, Meacham said. The $100 million will be transferred to a fund instead of being kept in the Rainy Day Fund so all the money can be used, Meacham said. The Rainy Day Fund has provisions that would allow the state access to only about $37.5 million next year, he said.

"I really feel a lot better about next fiscal year,” Meacham said. "We’ve started to finally see a bottom and actually an improvement in Oklahoma’s economy over the last few months.”

State revenues have shown some growth the past three months, he said. He looks for that trend to continue. The state’s constitution allows lawmakers to spend only 95 percent of the money authorized in the budget. In most years, lawmakers have the remaining 5 percent to carry forward to the next fiscal year; with the revenue shortfall, lawmakers didn’t have that money available this fiscal year.

Meacham said lawmakers likely will have that 5 percent reserve, or about $260 million, at the beginning of the 2012 fiscal year. Lawmakers also should have a full cash flow reserve fund, or about $380 million.

That $740 million should help lawmakers with the 2012 fiscal year budget "even if the economy is not back all the way,” Meacham said.

This is the eighth and last budget package to be prepared by Henry and Meacham. Henry elected in 2002, cannot seek a third successive term.

Meacham, tabbed by Henry to serve as the state’s finance director, eventually was appointed treasurer to fill the unexpired term of Robert Butkin, who resigned. He was elected to a full four-year term in 2006. Meacham has said he is not seeking re-election.

During Henry’s first year in office, Democrats controlled both the House of Representatives and the Senate. Oklahoma was in an economic downturn and had only about $100 million in its savings account, the Rainy Day Fund.

During his last year as governor, Republicans controlled both chambers. The state was in the throes of a longer, deeper recession. Coffee and Benge cannot seek re-election because of 12-year legislative term limits.

Benge said he, Coffee and Henry realized in August when revenues first started coming in below estimates that "we had a tough job ahead of us.”

"We all pledged or spoke about the need to work together and we’ve done that,” he said.

Revenue Proposals
In addition to making cuts to state agencies and using nearly $1 billion in cash, savings and federal stimulus funds, the 2011 fiscal year budget package depends on several proposals to generate new revenue to help make up a $1.2 billion shortfall.

The proposals are projected to raise about $180 million. They include:

• Expanding the state’s vehicle insurance verification program by using cameras mounted on state highways to record and ticket motorists driving without insurance. The idea is expected to raise about $50 million. The Public Safety Department is seeking proposals on the idea, but the system likely would involve cameras taking pictures of vehicle tag numbers. The computerized system will check the tag against a national database; if it’s determined the vehicle is not insured, a citation will be generated and issued to the vehicle’s owner. The system would not keep tag information on motorists who have vehicile insurance, state Treausrer Scott Meacham said.

• Develop a procedure to collect sales tax on Internet and catalog sales not currently being collected. Out-of-state businesses without a store or building in the state are not collecting sales taxes on sales made over the Internet, telephone or via mail order. Oklahomans are supposed to calculate the amount of state sales tax owed on such orders and pay the tax when filing their income tax returns. The state will spend money to make taxpayers aware that they owe the tax, and will work with merchants to point out the total does not include sales tax that is owed the state. It’s expected efforts would produce about $36 million.

• A new 1 percent fee insurance companies will pay on health care claims, which is expected to generate $78 million. The insurance fee will be used to stabilize the state’s Medicaid program. Money will be placed into an account with the Oklahoma Health Care Authority, which manages the state’s Medicaid program. The money should be matched 3-1 with federal funds.


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