Legislators are scheduled to vote today on a budget bill that would fund state government for the upcoming 2011 fiscal year based on an agreement announced Thursday by the governor and legislative leaders.
The $6.7 billion budget is dependent upon about $300 million in so-called revenue enhancements ï¿½ including a stepped-up effort using cameras on highways to nab uninsured motorists, which is expected to bring in $50 million, and encouraging residents to pay state sales tax on all Internet and catalog purchases, which is expected to bring in about $32 million.
The agreement, reached about 9:30 p.m. Wednesday and announced to lawmakers in closed meetings Thursday before details were released in the afternoon, erases a $1.2 billion projected deficit with $1.4 billion in available cash, raising money and invoking a moratorium on tax credits.
"Many agencies and programs will still feel the pain of the budget crunch and that was unavoidable," Gov. Brad Henry said. "But despite some bumps along the way, we were able to strike a bipartisan agreement that will help Oklahoma recover from these trying economic times."
The deal calls for using about $540 million in federal stimulus funds, about $272 million from the state's Rainy Day Fund and raising about $180 million in various ways and diverting $150 million from investors to state funds through tax credit moratoriums. It leaves about $100 million in cash on hand for legislators next year.
So-called cost recovery or revenue enhancement measures include increasing the fee for getting certified copies of driving records, which is expected to raise $11.4 million, and 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 put into an account with the Oklahoma Health Care Authority, which should be matched about 3-to-1 with federal funds.
The budget tax credit moratoriums include a two-year moratorium on oil and gas drilling incentives that is expected to free up about $81 million for state coffers; plans are to eventually transfer that into a tax credit.
Special Senate and House budget committees approved the general appropriations measure, House Bill 1561, within a couple hours after the budget deal was announced Thursday. The Senate is scheduled to take up the measure this morning; the House will follow suit this afternoon.
The proposals to generate additional funds are included in separate bills that legislators will take up in the six remaining days of the session. Legislators must finish their work by 5 p.m. May 28.
The bills must not only pass, but receive two-thirds votes of the members in each chamber in order for them to take effect as soon as the governor signs them. Failure would mean the measures won't take effect until 90 days after the session ends, or late August.
The budget document in HB 1561 is dependent upon all those measures being in effect by July 1, the start of the fiscal year.
Failure of any of the measures won't derail the budget. Instead, it would result in less money coming into state coffers; the decreased revenue would be subtracted from the last agency listed in HB 1561, said Rep. Ken Miller, R-Edmond, chairman of the House Appropriations and Budget Committee. The last agency listed on the measure is the state Education Department, which the governor fought to keep its budget cut to a minimum.
House and Senate Democrats, who have enough members in each chamber to kill the so-called emergency clauses in the bills, said earlier they would exercise that option if certain items weren't in the budget agreement.
Three of four items sought by Democratic legislators are in the budget ï¿½ about $5 million to restore funding for the senior nutrition program, a reduction in available tax credits, and keeping intact most of the funding for a rural development program, the Rural Economic Action Plan, which is targeted to receive $12.4 million.
Democrats also pressed for a hospital provider fee, which is not in the budget.
Rep. Scott Inman, D-Del City, the House Democrats' designated leader for next session, said the inclusion of the new insurance fee on health claims satisfies House Democrats' desire for a new funding source to keep budget cuts to state agencies below 10 percent.
Inman and Senate Democratic leader Charles Laster of Shawnee said they were pleased.
"I'm convinced the additional money from the (insurance) claims fee would not have been in the budget had it not been for the work of the Democrats in the House and Senate," Laster said.
Cuts to most education, public safety and health care agencies were kept near 3 percent.
Cuts to most other state agencies are about 7 percent, much less than the 10 to 12 percent cuts that some agency heads feared.
The proposed $6.7 billion budget is about 7.6 percent less than the $7.2 billion budget for the 2010 fiscal year that was approved last session. But shortly after the 2010 fiscal year started, revenue came in significantly below estimates and 7.5 percent across-the-board cuts were instituted against most state agencies, many of which already were cut 7 percent in the original 2010 fiscal year budget.
Republican legislative leaders and the governor, left with $5.4 billion to spend this session, earlier agreed on how to use nearly $600 million in the Rainy Day Fund and federal stimulus money to plug a nearly $300 million hole at the end of the 2010 fiscal year.
"This budget represents the tough decisions we have said all session would be required to fill a $1.2 billion shortfall, which inevitably will touch every aspect of state government," said House Speaker Chris Benge,R-Tulsa. "This budget insulates vital government services like public safety, transportation, health care and education from dramatic cuts while also leaving our state in a fiscally sound position for the next Legislature and beyond."
"In divided government," said Senate President Pro Tempore Glenn Coffee, R-Oklahoma City, "parties have to work together to do the people's business. During a tight budget year, this agreement provides a responsible reduction in spending and protects taxpayers from a tax increase."