Talks on developing Oklahoma's legislatively appropriated budget of $7 billion are progressing and seem to be ahead of schedule, budget negotiators say.
House Appropriations and Budget Chairman Scott Martin, R-Norman, said last week that budget negotiators with the House of Representatives, the Senate and the governor's office are the closest they've been at this point in the session in the five years he has been involved in budget talks.
Republican legislative leaders said last week that they could finish their work by May 24, or a week earlier than lawmakers are authorized to stay in session this year.
With Gov. Mary Fallin and Republican legislative leaders striking a deal last week on three key agreements, budget talks will accelerate on coming up with a spending package for the 2014 fiscal year, which begins July 1, said Preston Doerflinger, who serves as finance secretary on Fallin's Cabinet.
Talks have been underway for weeks between GOP legislative leaders and the Republican governor.
Doerflinger confirmed that House and Senate budget leaders, along with the governor's office, each have been preparing a budget with a quarter-percent cut in the top personal income tax rate built in. That would amount to about a $40 million reduction in revenue during the first fiscal year of its implementation.
One of the agreements deals with reducing the state's top personal income tax rate from 5.25 percent to 5 percent, but not until Jan. 1, 2015. With the tax cut postponed a year, budget negotiators instead will replace its lost revenue with a $60 million appropriation for state Capitol repairs, which is part of the income tax-cutting deal.
“With that put to bed, we know what we have to work with,” Doerflinger said. “We've agreed on revenues.”
Lawmakers have about $213 million in additional revenue through increased tax collections this year to appropriate. They also could have some additional funds as well from various accounts.
Much attention has been paid recently to the governor's office and legislative leaders considering an increase of between $75 million and $100 million for public schools. Some of the additional money would pay for unfunded requirements passed by legislators the past couple of years. Earlier changes approved but not funded by lawmakers include better reading education and end-of-instruction exams in public schools.
Doerflinger said he is hopeful to get $46 million of new money to pay for recommended changes in a five-year plan to improve child welfare operations at the Department of Human Services. The plan is part of an agreement to settle a federal lawsuit.
“It's just a matter of keeping DHS at the forefront and realizing that we're under the settlement agreement,” he said.
Doerflinger, who served several months last year as interim director of DHS and worked on finalizing the Pinnacle Plan, said the plan originally called for an additional $30 million for the 2014 fiscal year, which is in the second year of the plan.
The plan called for legislators to appropriate $30 million in funding each of the first two years. Lawmakers last year appropriated $25 million. The plan among other things calls for hiring more child welfare workers, recruiting more foster parents and moving away from caring for abused and neglected children at shelters.
Doerflinger said the agency needs at least $40 million in extra money in the upcoming fiscal year to allow changes to occur more quickly than expected as well as reduce an increased allocation for the third year of the plan, from an additional $20 million to $12 million.
“It starts to get slippery if we're not around that $40 million number to continue the efforts that have been started under the Pinnacle Plan,” Doerflinger said.
Fallin's budget proposal also calls for an additional $40 million to pick up Medicaid costs for about 61,000 Oklahomans who are eligible for Medicaid but are not enrolled in the health care program.
Fallin also is seeking an additional $16 million for state mental health services, which would be used to pay for a third community crisis center in the state and beef up funding of programs intended to reduce suicide and prescription drug abuse.
Fallin also wants money to go to a program that helps children and families with children who are suffering serious emotional issues.
Lawmakers have passed bills calling for pay increases for state troopers and corrections officers, which are under discussion, as are bonuses for state workers who have gone at least two years without an increase in pay.