Stimulus may cover half of Oklahoma's shortfall

Federal stimulus money could take care of more than half of the state’s $900 million budget hole, a key budget negotiator says.

Of the $2.6 billion in federal money earmarked for Oklahoma over the next two years, indications are about $500 million can be used for budget stabilization and programs for the 2010 fiscal year, said state Rep. Ken Miller, chairman of the House Appropriations and Budget Committee. House Speaker Chris Benge said work on crafting the state’s budget is in its infancy.

Legislators still could finish a week earlier than May 29, the scheduled last day of this year’s session, especially if uncertainty over federal stimulus funds can be cleared up shortly, said Benge R-Tulsa.

Miller said he remains optimistic the state, which has a $7.1 billion budget this fiscal year, will finish this fiscal year, which ends June 30, in the black.

It’s estimated state revenue will be down about $612 million for the 2010 fiscal year compared with this fiscal year. Increased expenses for employee benefits probably will increase the deficit to about $700 million, Miller said.

The $900 million hole was determined by including more than $180 million of one-time revenue sources and carryover money used last year to balance this fiscal year’s $7.1 billion budget. Declining federal money coming into the state, mostly for Oklahoma’s Medicaid program, also contributed to the shortfall. Some of the stimulus money can be used to make up the reduction in federal money, such as Medicaid funds.

The state could have between $50 million and $100 million in cash reserves, which with available stimulus money should reduce the deficit to about $350 million, he said. The governor also has some discretionary federal stimulus money that could be used to erase some of the shortfall.

All agencies and departments can expect some cuts, Benge said.