By Jason Doyle Oden
Now that the final calculations have been made on revenues collected for the previous fiscal year, it’s been revealed the mid-year revenue failure cuts of seven percent were too deep. The state must now decide how to spend $140.8 million from the fiscal year which ended on June 30.
June was the last month for FY 2016 collections. That month’s revenue’s missed the estimate by 12.6 percent to end the fiscal year $514.3 million short, about 9.4 percent.
Governor Fallin signaled she might call a special legislative session to use the $140.8 million as a means for a teacher pay raise. If that doesn’t happen, the funds would be redistributed proportionally back to the state agencies.
Finance Secretary Preston Doerflinger indicated he would favor a special session.
“Many agencies have needs, but the fact is this money would do more good for Oklahoma in the form of a teacher pay raise than it would equally distributed to agencies,” Doerflinger said. “A lot of agencies – mine, for one – simply don’t have as compelling a case for the money as education, particularly our teachers.”
The two cuts last fiscal year totaled seven percent. After the final count was made, it was determined that a cut of 4.4 percent was needed.
One place the money cannot go, but seems to be a popular idea, is the Rainy Day Fund. Doerflinger said it was because the money is not a surplus, just an accounting quirk.
“Calling these funds a surplus is like taking $7 out of someone’s pocket, giving them $2.50 back and congratulating them on a $2.50 surplus,” Doerflinger said. “Let’s be clear: These are funds that are available because an emergency cut level can now be reduced, not because revenues were above expectations. The state is still in a challenging revenue environment due to energy sector contraction and other factors. If this were a true surplus, there would be a Rainy Day Fund deposit, which isn’t happening.”
Doerflinger stands by the decision to reduce allocations by seven percent.
“We stand by the cut level we approved because instead of cutting agencies yet again, which would have happened if the cut level was too small, the state gets the chance to address a major priority in teacher pay,” Doerflinger said.
The possible move by the Governor to call the special session for teacher raises comes as Oklahoma voters get ready to decide the fate of a one-cent sales tax proposition to fund teacher raises and other educational purposes in Higher Education in November.
The $140.8 million will be held until a decision is made whether Fallin will call the Legislature back to work.
