News » State

Lawmakers continue work to lessen Oklahoma budget woes

by

comment
From left, Dr. Mickey Hepner, UCO, State Auditor Gary Jones, State Representitive Scott Inman, and State Senator Clark Jolley, talk in front of the stage before the start of the Annual State Budget Summit held at the Will Rogers Center, 1-28-16. - MARK HANCOCK
  • Mark Hancock
  • From left, Dr. Mickey Hepner, UCO, State Auditor Gary Jones, State Representitive Scott Inman, and State Senator Clark Jolley, talk in front of the stage before the start of the Annual State Budget Summit held at the Will Rogers Center, 1-28-16.

Following state leaders declaring revenue failure in December and a $177 million midyear budget trim, lawmakers faced a grim situation this week when returning to the Capitol.

Last week, Gov. Mary Fallin told reporters the $900.8 million budget hole was an opportunity. Crafting the state’s fiscal year 2017 budget requires creativity, hard work and “rolling up our sleeves.”

“I see this budget shortfall as an opportunity to be able to fix things — be able to clean our house, frankly — and to get things in order so that we can pay for things we need to pay for,” Fallin told Tulsa World.

Opportunity wasn’t how David Blatt, executive director of Oklahoma Policy Institute, described the revenue failure and midyear cuts. The group explores funding cuts and their impact on state agencies and residents.

Over the last year, dwindling tax dollars created job losses for state employees, increased wait times for mental health treatment, raised college tuitions, eliminated services for people with developmental disabilities, reduced payments to health care providers and forced further cuts to public schools.

Blatt said a drop in oil prices only partially contributed to the budget crisis.

Shrinking monthly tax collections came on the heels of several cuts to the state’s personal income tax, which resulted in a $1.022 billion loss over the course of more than a decade, according to The Institute on Taxation and Economic Policy.

From left, State Representitive Scott Inman speaking, with Chuck Hoskin Jr., Cherokee Nation, Dr. Mickey Hepner, UCO, State Senator Clark Jolley, and State Auditor Gary Jones, during the Annual State Budget Summit held at the Will Rogers Center, 1-28-16. - MARK HANCOCK
  • Mark Hancock
  • From left, State Representitive Scott Inman speaking, with Chuck Hoskin Jr., Cherokee Nation, Dr. Mickey Hepner, UCO, State Senator Clark Jolley, and State Auditor Gary Jones, during the Annual State Budget Summit held at the Will Rogers Center, 1-28-16.

‘Reasonable solutions’

Waiting for tax collections to improve isn’t the answer, nor is doubling down on cuts and relying on one-time revenues, Blatt said during Oklahoma Policy Institute’s Jan. 28 State Budget Summit at Will Rogers Theatre & Event Center.

“We do have a chance to look at how we develop our budgets and try to put into place some more long-term planning and foresight into the process,” Blatt said.

The nonprofit group supports a repeal of the most recent income tax cut, which dropped to 5 percent Jan. 1. The repeal is one of “five reasonable solutions” introduced during the summit. Other solutions are adopting combined corporate reporting, ending the state’s double deduction, enacting a tax on online sales and accepting federal funds for health care — Medicaid expansion.

All options generate recurring revenues into Oklahoma’s coffers, according to Oklahoma Policy Institute.

During the event, Norman Mayor Cindy Rosenthal, state auditor Gary Jones, Sen. Clark Jolley, Rep. Scott Inman, Cherokee Nation Secretary of State Chuck Hoskin Jr. and University of Central Oklahoma business dean Mickey Hepner addressed the bleak budget situation.

“We are stuck in a place where a train wreck is coming,” Hepner said. “All the levers we could use to stop it aren’t available to us. So the crash, in the terms of the state budget, is coming in the next few months.”

From left, Norman Mayor Cindy Rosenthal speaking, State Representitive Scott Inman, Chuck Hoskin Jr., Cherokee Nation, Dr. Mickey Hepner, UCO, State Senator Clark Jolley, and State Auditor Gary Jones, during the Annual State Budget Summit held at the Will Rogers Center, 1-28-16. - MARK HANCOCK
  • Mark Hancock
  • From left, Norman Mayor Cindy Rosenthal speaking, State Representitive Scott Inman, Chuck Hoskin Jr., Cherokee Nation, Dr. Mickey Hepner, UCO, State Senator Clark Jolley, and State Auditor Gary Jones, during the Annual State Budget Summit held at the Will Rogers Center, 1-28-16.

Lawmakers’ reactions

“We are not going to solve this problem by raising taxes,” said Jolley, R-Edmond. “We are not going to solve this problem by budget cuts. ... We’ve got to take a multi-solution approach to get us out of this because it was a multi-approach that got us here.”

The Senate Appropriations Committee chairman advocated for examining “off-the-top” money, funds that divert dollars away from the general revenue fund. Agencies and programs, such as the Oklahoma Department of Transportation and the college scholarship program, fall in the “off-the-top” spending category and void the appropriations process. Typically, the state distributes $3 billion to “off-the-top” spending each year.

Last May, Fallin signed a $7.1 billion budget, which included funding for common education, human services, corrections, public safety, juvenile affairs and other agencies.

House Minority Leader Inman described a perfect storm as he cited causes of the budget shortfall. He blamed approval of a low horizontal drilling tax, a high number of tax credits and personal income tax cuts.

“We are here because you have a group of elected officials who would rather govern by political philosophy than by political reality,” said Inman, D-Del City.

It’s difficult to predict the budget outcome during a session with a fiscal crisis of historic proportions. However, lawmakers can continue to work for solutions thanks to a handful of proposed legislation measures.

Print headline: Budget frontlines, Faced with a revenue shortfall, Fallin points to opportunity. Others want long-term solutions, lessening the need for annual cuts.

Latest in State

Add a comment