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Pressure mounts for Oklahoma legislators to reach a state budget agreement

BY MICHAEL MCNUTT Published: May 9, 2010
It’s expected the state has a budget hole of about $600 million after using $223.5 million from its savings account, the Rainy Day Fund, and the remaining $515 million of federal stimulus money.

If no new revenue is found, either by generating more revenue through new programs, by raising fees or by cutting tax credits, state agencies are looking at cuts of about 10 percent.

Most state agencies have been cut 14.5 percent since the start of this fiscal year as the state’s revenues have come in below estimates because of low natural gas prices and the national recession.

The large size of the budget hole in the 2011 fiscal year budget and concern over the 2012 fiscal year budget are making it especially challenging this year, Meacham said. The 2012 budget will be difficult to develop because so much one-time funds — such as the federal stimulus and Rainy Day money — were used in the 2011 budget, he said. Also, legislators and the governor, before taking up the 2011 budget, had to take care of a nearly $300 million deficit in the current 2010 fiscal year.

The longer budget discussions take, the more clamoring for money or suggestions in how to find revenue occur. Three rallies from groups asking for more money occurred last week at the state Capitol. House Democrats held three news conferences last week calling for a cut or reduction in tax credits.

"Everybody is feeling the effects of the cuts we’ve already done,” Meacham said.

"They’re even that much more fearful of further cuts to come because they see all the damage that’s been done so far,” he said.

Henry earlier this year proposed $750 million in revenue enhancements.

They included repealing the rural small business and the small business capital credit programs, which would bring in nearly $50 million to the state coffers.

But rural legislators complained, saying at least one city in a rural area was winding up transactions that required the use of the tax credits. A special Senate budget committee last week passed legislation that called for eliminating both of the small business credit programs. A special House budget committee failed to approve the measure. None of the House Democrats agreed to support the measure, said House Appropriations and Budget Committee Chairman Ken Miller, R-Edmond.

Meacham said the governor and legislative leaders are "very close” to working out a compromise on the two tax credit programs.

Other ideas suggested by the governor include collecting sales tax on Internet sales and expanding a crackdown on uninsured motorists by using an automated system that would check all vehicles driven in the state. Only Oklahoma motorists are checked now during traffic stops. He’s also suggested refinancing bond issues at today’s lower interest rate, possibly saving tens of millions of dollars.

Legislators publicly haven’t warmly embraced the ideas. The governor’s also suggested merging several state agencies, but a bill seeking to merge or combine agencies has failed to gain traction.

Contributing: Julie Bisbee, Capitol Bureau


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