Governor Kevin Stitt is taking a longer view in his approach to fixing a revenue failure and crafting the state’s next budget. On Tuesday during a press conference meant to demonstrate the state’s supply of personal protective equipment (PPE), Stitt faced questions from the local news media as to why he suddenly cancelled Monday’s Board of Equalization meeting as the Legislature passed bills to patch the current budget, as well as, grant the governor special powers during the health emergency due to the COVID-19 outbreak.
Stitt wants a combination of funds from savings and for state agencies to cut expenses to patch the budget.
“Asking the state government to also cut expenses by one or two percent is very reasonable in the current situation were in. So, we’re talking about agency cuts. We’re talking about how do we protect agencies going forward. We’re talking about how much of the money to spend out of savings,” said Stitt.
That didn’t sit well with Legislative Leaders on Tuesday. House Speaker Charles McCall and Senate President Pro Tempore Greg Treat reminded Stitt that the trio of budget stabilization bills were passed by a veto-proof majority.
“The position the Legislature stated by veto-proof majorities Monday is not changing. The Legislature will not authorize cuts to core services during a pandemic response because the public needs its services right now. The state’s reserves, which exist for emergencies just like this, are sufficient for services to continue uninterrupted. The legislative branch controls the power of the purse, and we have made our position clear on behalf of our constituents across the state,” said McCall.
Treat said the Legislature’s actions to back fill the estimated $416 million revenue failure for this fiscal year’s budget is protecting Oklahomans’ access to state services.
“The Legislature, both Republicans and Democrats by overwhelming margins, took the necessary actions to protect state services from deep budget cuts. In the midst of a catastrophic health emergency, we must prevent budget cuts to public schools, health care, first responders and other core state services. The Legislature is a co-equal branch of government vested with the authority to write the budget. We take that role seriously. I am hopeful that the governor signs all the legislation that was sent to his desk this week,” said Treat.
Senate Minority Leader Kay Floyd said Senate Democrats will stand with Treat on the budget fix.
“Today, Governor Stitt floated a proposal to cut funding for state agencies by one to two percent. Oklahoma Senate Democrats were disappointed to hear this and are strongly opposed to budget cuts to core services. Every day dedicated and hard-working state employees are on the frontlines of Oklahoma’s efforts to combat the spread of COVID-19. Now is not the time to be reducing much needed resources for state agencies. Oklahoma Senate Democrats call on Governor Stitt to act quickly to prevent a revenue failure by convening the State Board of Equalization and signing the budget bills passed by the Legislature.”
House Minority Leader Emily Virgin took to her Facebook page after the Governor’s press conference. She contends Stitt is holding off on signing the three bills and convening the Board of Equalization because money was left out of the Digital Transformation Fund.
“One of those funds we decided would not be backfilled was the Digital Transformation Fund housed in the Governor’s office. In last year’s budget, $15 million was allocated to that fund. There is currently $8.4 million in that fund to continue digital transformation efforts through June 30, when a new state budget would take effect. The amount that fund might not receive because of our actions yesterday is less than $250,000.
Because we carved out the Digital Transformation Fund, the Governor is now threatening not to approve of the whole package of bills passed to address the revenue failure. In his press conference today, he mentioned state agencies taking cuts of 1-2%. This is far lower than what would actually happen if we didn’t fill this revenue hole because the cuts would take place over a compressed time period, or what is actually left in this fiscal year. No matter the amount, though, this is NOT the time to be cutting core services. More people than ever are depending on these services, and we have a responsibility to provide them,” Virgin posted.
During the press conference, after being pressed for further explanation by the media, Stitt said he is looking at a long term solution, not a quick fix.
“We’re in the middle of negotiations of the budget, not only for 2020, but 2021, and in nine months, we’ll be back up in here in January talking about the 2022 budget. So, within nine months we’ve got three issues that we’ve got to solve. And so, just trying to think through that,” said Stitt.
If things get settled on Wednesday, there is still a chance for the Board of Equalization to meet this week to certify the revenue failure. Without that certification, certain aspects of the budget fix will not go into effect.
Stitt says he’ll continue to work with Legislative Leadership.
“We’ll be working with the House, the Senate the rest of this week and also into next week to work on a good budget for next year,” Stitt said.
You can watch Governor Stitt’s complete press conference below.
If the Governor wants to shrink the size of the government by a percent or two, it’s good by me. The fact that the Democrats have joined the Republicans in lockstep on objecting to this effort tells me that the Governor is on the right tract.