Budget Agreement Reached

Governor Mary Fallin, Senate President Pro Tempore Brian Bingman and House Speaker Jeffrey W. Hickman today announced an appropriated state budget agreement for Fiscal Year 2016.

Under the agreement, the FY 2016 appropriated budget will be $7,138,920,521, which is $74.3 million, or 1.03 percent, less than FY 2015’s appropriated budget.

The agreement preserves current funding levels for common education, a major victory considering the state had $611 million less in certified revenue available this legislative session than was appropriated in FY 2015. Education continues to be the state’s largest investment, with more than 50 percent of all appropriated dollars going toward education expenses.

Other agencies protected from appropriation reductions through flat or increased appropriations include the Department of Corrections, Department of Public Safety, Oklahoma Health Care Authority, Oklahoma Department of Mental Health and Substance Abuse Services, State Department of Health and Office of Juvenile Affairs, among others.

Additionally, the agreement preserves the funding necessary to maintain the state’s current eight-year transportation plan and county government’s five-year road and bridge plan. It also appropriates $15.9 million to the Department of Human Services to fully fund FY 2016 Pinnacle Plan costs.

Under the agreement, 49 agencies receive funding cuts ranging from 0.75 percent to 7.25 percent, eight agencies receive appropriation increases and 12 agencies receive flat appropriations.

To address having $611 million less in certified revenue than was appropriated in FY 2015, the agreement accesses $150 million from the Rainy Day Fund and reconciles $125.2 million from agency revolving funds. It produces additional revenue by accessing other state accounts, modifying apportionments and implementing new tax initiatives to reduce tax fraud and collect past due taxes.

In a major transparency and fiscal reform, the general appropriations bill, House Bill 2242, will for the first time display all funding available to agencies in order to present the full funding picture of state government. Previously, only legislative appropriations figures were contained in these bills. Legislative appropriations today comprise about 40 percent of state spending.

Governor Mary Fallin:

“At the beginning of this legislative session, I said that improving educational attainment, addressing over-incarceration and boosting health outcomes need to be priorities for the state of Oklahoma. This budget reflects those priorities and will allow us to continue to make progress in those areas.

“In a year with a $611 million budget hole, today’s agreement takes extraordinary steps to shield common education, our largest and one of our most important expenses, from budget cuts. Under this budget agreement, approximately 51 cents of every dollar appropriated by state government will continue to go toward education.

“The budget also protects and in some cases increases funding for health and public safety while preserving all funding necessary to keep intact the state’s eight year transportation plan as well the five year county road and bridge plan. I’m extremely proud of the work the Legislature and my office have done to produce a fiscally responsible budget that adequately funds core government services even in the face of significant budget challenges.

“I’m also proud of the preliminary steps this budget takes to begin addressing our structural budget challenges to make budget writing more flexible and transparent in the future. In addition to the fiscal reforms in this budget, we’ve also enacted policy to review all tax incentives every four years and require use of performance informed budgeting so the state can make better use of its resources.”

Senate President Pro Tempore Brian Bingman, R-Sapulpa:

“We knew this would be a difficult budget year, but we believe we have delivered a responsible agreement that includes strategic spending cuts and much-needed apportionment reform. In a year when we were faced with a significant shortfall, difficult decisions had to be made to produce a balanced budget.

“The Senate this year emphasized a more comprehensive examination of state spending to identify efficiencies, and structural reforms to give the Legislature greater flexibility in the appropriations process. We have also been meeting with state agencies for months in a collaborative effort to consider how they might be able to operate more efficiently in anticipation of these necessary cuts. This budget reflects our commitment to fiscal responsibility, while adequately funding core services.

“We are pleased that we were able to protect funding for critical priorities like education, while ensuring that the Department of Transportation’s eight-year plan will remain unaffected. Given the challenges we faced this year, we believe we have reached an agreement on a fiscally responsible budget that will allow us to make continued advancements in areas of need like education and transportation.”

House Speaker Jeffrey W. Hickman, R-Fairview:

“I’m pleased we were able to reach agreement with the Governor and the Senate on a budget which prioritizes essential services as we make adjustments caused by the state’s structural budget challenges. To have a budget which makes no cuts to our public schools, protects our Eight-Year-Plan for safer roads and bridges in Oklahoma, continues our investment in critical reforms at DHS, and preserves public safety with dollars redirected to the critical needs in juvenile affairs and the crisis in our state prisons, is a tremendous achievement with the funding issues we faced.”