Jan
26
Budget agreement cause for concern
Filed Under Uncategorized
Governor Henry and legislative leaders have reached an agreement that they say will close the $1-billion shortfall in the current year’s budget. The terms include the following:
Under the proposal, the monthly allocation for state agencies will continue to be reduced by 10 percent for the rest of FY 2010 to reflect slumping revenue collections.
In an effort to protect some priority areas, a handful of agencies in education, health and public safety will subsequently receive additional appropriations to supplement their budgets this year and reduce their share of the overall reduction. Even with that action, every state agency will receive some level of targeted cut for the current fiscal year.
As part of their budget pact, state leaders have agreed to assign priority status to K-12 schools, higher education, the Oklahoma Health Care Authority and the Department of Corrections, and provide each agency with a supplemental appropriation.
Under the terms of an earlier agreement, K-12 education will receive $50 million to address a shortfall in the HB 1017 Fund. Another $80 million will then be divided between K-12 schools and higher education based on their overall percentage of general revenue. The OHCA will be allocated $33 million in a supplemental appropriation and the DOC will receive $7.2 million.
If you add up the figures in the last paragraph, you get $170.2-million in supplemental appropriations. But remember that the state also has to pay back the $233-million in various cash reserve funds it has used to fill gaps over the last seven months. That means the budget agreement will actually cost $403.2-million out of the Rainy Day and/or stimulus dollars. And that’s before a single dollar is spent in Fiscal Year 2011.
OFRG argues that the Rainy Day Fund needs to be as full as possible for FY 2012 because stimulus funds will no longer be available, leaving a $600-million dollar hole in the budget, about the same amount as the Rainy Day Fund has. If you take the $403-million out of the Rainy Day Fund to fill gaps this year, the new governor and new legislative leaders will have a much harder time making ends meet.
While we applaud the continuation of 10% cuts for most state agencies, there needs to be a concerted effort to identify programs to be cut and efficiencies to be made in every agency.
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[...] friends over at Oklahomans for Responsible Government have a blog post up on the FY ‘10 budget agreement expressing dismay over the use of (an unspecified amount [...]