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Oklahoma legislators reach $6.7 billion budget deal

BY MICHAEL MCNUTT Modified: May 20, 2010 at 11:13 pm •  Published: May 20, 2010

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 � 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.

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