Budget Deal Surfaces

As the countdown to the end of the regular legislative session moves from days to hours, a budget for the next fiscal year has emerged. It appears Senate Bill 860 will be the vehicle for the budget. According to budget documents, the Legislature will appropriate $6.8 billion. Another bill, House Bill 2400 adds a $1,000 teacher pay raise to the total budget. However, it has yet to get traction in the Senate.

Governor Fallin said it was difficult to get to this point.

“Developing a budget in this difficult fiscal and political climate is never easy. This plan keeps our government from shutting down. It is not an ideal budget, but it avoids draconian cuts to our core services such as education, health and human services, and public safety; unfortunately, it leaves many agencies facing cuts for the sixth year in a row. It puts some recurring revenue on the table, but does not address the structural budget challenges that I have been working to fix since I took office. Year after year, I have repeated my warning about our reliance on one-time funding and our eroding tax base, and yet again we have crafted a budget that only fixes some of the defects in our funding formula,” said Fallin.

Twelve agencies are given flat or slightly higher budgets, while other agencies are likely to receive cuts between four and ten percent. The Department of Education is one of the agencies receiving a flat budget. Lawmakers have agreed to add $18 million to the Education Department’s budget with a trailer bill. Superintendent of Public Instruction Joy Hofmeister is thankful the Legislature has found a way to avoid cutting education.

“While the budget crisis has been a formidable challenge for all involved, I am deeply grateful that the Oklahoma State Legislature has worked hard to successfully make the school funding formula whole for common education. This has been a tough process and many state agencies have weathered steep cuts, but legislators deserve praise for prioritizing education on behalf of Oklahoma’s schoolchildren,” said Hofmeister. “Under the trailer bill, the Legislature will ensure that the funding formula is preserved and that the state fulfills its statutory obligation to cover 100 percent of the health insurance costs so vital for educators. This agreement is welcome news for Oklahoma schools after a year of uncertainty and financial hardship.”

Even if a budget is passed by Friday, Fallin predicts more heavy lifting will need to be done next year.

“Let there be no mistake, there is still work to do. When legislators return next year, they will already face a $400 million hole caused by one-time funds and $100 million of obligations coming due over the next 12 months that will need to be paid. Hopefully, in the months that follow they will begin putting together a real plan to address the budget to fill that hole when they return in February of 2018 – an election year when we know it is difficult to pass revenue measures,” said Fallin.

Revenue enhancements are making their way through the process as well. However, several groups have vowed to challenge the measures because they were heard after last week’s deadline for revenue generating bills. It means even if Sine Die happens on time, a successful challenge could force deeper cuts or a special session later this year.



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