Big budget problems won’t be solved until parties find a way to work together (Capitol Updates)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

With a $1.3 billion hole, the budget was always going to be ugly. The final numbers are much better than they could have been, thanks to the hard work of the House and Senate Appropriations Chairmen, Rep. Earl Sears and Sen. Clark Jolley respectively, and their Vice-Chairmen, Rep. Dennis Casey and Sen. Greg Treat. No doubt, what Rep. Sears called a “soft landing” didn’t come easily. Having said that, the results and the way they got there were uglier than they needed to be.

Despite efforts to make structural changes in the budget, much of it, as in the past few years, is funded by “one-time” money that won’t be dependably available again. In answering questions on the House floor Rep. Sears said as much as 60 percent to 80 percent of the budget hole is filled with non-recurring revenue, which creates a problem for next year.

The largest item of this type is the $200 million bond issue to continue funding the 8-year road plan. The plan was supposed to be funded by current “off-the-top” revenue. Legislators decided to sell bonds to pay for the roads and free up the $200 million for current operations. The other option would have been to pass a revenue source to pay for the road plan or to postpone the roadbuilding for a year, but legislators were politically unwilling or unable to do either. Next year, if the budget is short again, which it is predicted to be, legislators will have to borrow more money to make up for the $200 million deficit now baked into the budget, plus $15 million per year debt service on the $200 million in bonds.

The challenge for legislators is that the structural problems in the state’s budget can’t be fixed by process changes like eliminating “off-the-top money” or more transparency or better planning. We actually have a “structural deficit,” which means not enough revenue to pay for the agreed upon amount of government. The leadership and the governor were willing to work toward dealing with that by proposing increased cigarette taxes and gasoline taxes. These likely could have passed if the leaders were willing to match these regressive taxes with progressive taxes based more on ability to pay or benefit received from the economy. But leaders took these off the table.

Discussions broke down — or never really happened — because the Democratic minority and the Republican majority haven’t yet figured out how to deal with each other. Even with overwhelming Republican majorities it’s likely going to take Democratic votes, especially in the House to pass truly difficult measures. In a legislative setting the majority can usually pick up a few votes in the minority caucus by meeting individual objections of enough minority members. But when the majority party needs the cooperation of most of the minority members, the minority is going to feel entitled to at least some influence during the process.

To fix the big problems in our budget like education, public safety, healthcare and corrections, not just with money but with other difficult changes, the two parties are going to have to find a way to talk to each other. One can argue whether the Republicans were unwilling to give on anything or the Democrats’ demands were too much, but this year neither side figured out how to get together. Maybe this was a learning experience for next year.