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Oklahoma lawmakers should boost alcohol taxes, agency heads say

After hearing the state could face a budget shortfall of nearly $800 million in the next fiscal year, department heads make their case before a conference of children advocates.
BY MICHAEL MCNUTT Modified: October 14, 2010 at 12:41 pm •  Published: October 14, 2010

— Legislators should consider increasing the tax on alcohol and beer to help pay for treatment costs and not send as many nonviolent offenders to prison, instead of simply making additional cuts in the next fiscal year, health and human services agency heads said Wednesday.

"We have to cut corrections, we have to cut public safety and fund preventive programs and treatment programs instead," Mental Health Commissioner Terri White said. "We can't take any more cuts."

Health Commissioner Terry Cline said his agency's funding has been slashed 15 percent in the past two years, which has forced cuts in services and employees.

"One or two years of cuts to that infrastructure could result in decades of loss in terms of well-being for constituents in our system." He said legislators should look at how the state's education and criminal justice systems are funded.

They made the comments after a fiscal policy expert told a conference the state could be facing a budget shortfall of nearly $800 million for the 2012 fiscal year, which begins July 1.

Lawmakers and the governor next year won't have as many one-time funds, such as federal stimulus money and savings, as they did this year to deal with a $1.2 billion shortfall, David Blatt, director of the Oklahoma Policy Institute, a policy think tank, told those attending an annual conference of the Oklahoma Institute for Child Advocacy at the University of Central Oklahoma.

Projections show collections of existing sources of revenue will be about $1.1 billion short to balance the 2012 fiscal year budget, Blatt said. This fiscal year's budget is $6.7 billion.

Legislators will have available $100 million they stashed away after draining the state's Rainy Day Fund, and will have other cash on hand to bring the shortfall down to nearly $800 million, he said.

"Revenue growth is unlikely to fill a hole of that size," he said.

Contacted later, state Treasurer Scott Meacham, Gov. Brad Henry's budget adviser, said he expects the state will have revenue growth of about 3 percent, or about $139 million. That means, along with some available cash, such as additional federal stimulus funds this year for the state's Medicaid program and common education that Blatt didn't include in his estimate, the budget hole would be closer to about $450 million.

"It will be another year of cuts," he said. "We're going to have a shortfall. The question is: How much growth are we going to get?"

White said it is cheaper to treat those with drug, alcohol and mental health issues than it is to incarcerate them. The average cost to maintain an inmate in prison is $48 a day, a figure that jumps to $175 a day if in a prison mental health unit — providing mental health services to someone in the community costs $25 a day, while providing substance abuse services in the community costs $15 a day.

Alcohol tax proposed

Howard Hendrick, director of the Department of Human Services, said the state should look at increasing the alcohol tax for the same reason voters were asked in 2004 to approve a tobacco tax increase — to help pay for treatment and medical costs associated with the use of the product.

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