The recent history of state appropriations, displayed here from our FY ‘11 Budget Highlights fact sheet, shows a  series of successive ups and downs:

We see that the state appropriated budget for the current year, FY ‘11, is 5.8 percent less than two years ago and slightly less than the budget in FY ‘07.  With revenue collections having plummeted by more than 20 percent compared to pre-downturn levels, only the  adoption of various revenue enhancements and the injection of almost $2 billion in non-recurring revenues from the federal stimulus bill, Rainy Day Fund and other sources have averted more drastic cuts to agency budgets. Still, over half of all appropriated state agencies will have absorbed funding cuts of at least 15 percent, and across state government, shortfalls have forced agencies to eliminate programs and services, reduce hours of operation to the public, cut payments to private providers, and lay off or furlough employees (our online budget presentation runs through the full story).

Some have drawn a different conclusion from these numbers.  If you look at the period prior to the downturn, you see a substantial increase in the state budget – about $1.9 billion in growth between FY ‘04 and FY ‘08. Doesn’t that suggest that state government grew too big, and that the current period represents more of a healthy correction that a crisis? In addition, even with the cuts of the last two years, state appropriations remain 8 percent higher than they were in FY ‘06.  If the state could operate with a $6.2 billion budget six years ago, surely it should be able to manage with a $6.7 billion budget in FY ‘11? Read the rest of this entry »

Treasurer Scott Meacham today announced that General Revenue (GR) collections for the first month of the new state fiscal year, FY ‘11, came in 9.9 percent above the prior year and 11.9 percent above the official certified estimate. The sales tax and corporate income tax saw the strongest growth compared to July 2009, while personal income tax collections were off by 0.1 percent from a year ago, likely reflecting the persistence of weak employment numbers.

Although one must be careful of drawing conclusions based on a single month, July’s collections confirm that revenues are continuing the upswing seen in recent months and should further dispel fears that the state will face a third consecutive year of revenue shortfalls requiring mid-year cuts.  It now seems far likelier that the economic projections made in February that formed the basis of this year’s budget underestimated the speed and strength of the economic recovery. If GR continues to come in above 100 percent of the estimate over the course of the full year, the surplus will go to replenishing the Rainy Day Fund. Read the rest of this entry »

My decision to take vacation over the final week of July and first week of August allowed me to avoid not only some of the worst of the summer heat wave here in Oklahoma but also much of the heated controversy that followed the release of OK Policy’s issue brief on State Question 744, the ballot measure that would peg education funding in Oklahoma to per pupil expenditures in neighboring states. We set out four main arguments that have led us to take a position opposing the measure, the most compelling of which is the strong likelihood that mandating an estimated $1.7 billion increase in funding for common education over three years without a new revenue source would set the state even  further behind in our other areas of public investment that all Oklahomans, including our schoolchildren and teachers, depend on.

Our position was strongly praised by the Oklahoman in a written editorial and this video editorial by editor Ed Kelly (you’ll first get a short commercial for an investment company):

Read the rest of this entry »

Last week, Treasurer Scott Meacham presented the preliminary data on full-year collections to the state’s General Revenue fund for FY ‘10, which ended June 30th.  He emphasized both the magnitude of the decline in collections from the prior year – $945 million, or 17 percent – and the shortfall in collections compared to the initial certified estimate for the year, which, at 15 percent, may have been the largest mid-year shortfall in state history.

We’ve now gone further back to see where the drop in state revenue collections leaves us. The numbers are pretty striking:

Read the rest of this entry »

Today, Oklahoma Policy Institute released an issue brief exploring State Question 744, the proposal that will appear on the November ballot that would peg Oklahoma’s education spending to the regional average per pupil expenditure in six neighboring states. On our website you can read the full issue brief or a one-page summary; you’ll also find links to the  language of the ballot measure and to the websites of the pro- and anti-SQ 744 coalitions. Here is the press release that we put out explaining why we believe SQ 744 to be the wrong solution for Oklahoma:

State Question 744, the proposed constitutional amendment that would peg the annual education budget in Oklahoma to funding levels in six neighboring states, is the wrong solution to a real problem, according to a new issue brief from Oklahoma Policy Institute.

“We know that education funding in Oklahoma has failed to keep pace,” said David Blatt, OK Policy’s Director and the report’s author. “However, the challenges faced by common education in Oklahoma are shared across the broad spectrum of state government. By mandating huge spending increases for common education without an overall expansion of state revenues, SQ 744 creates the strong likelihood of setting the state further behind in all our other critical areas of public investment, including higher education, health care, human services, and public safety. This outcome would harm all Oklahomans, including our schoolchildren and teachers.” Read the rest of this entry »

A new poll from the Pew Research Center presents interesting findings about the state of public opinion regarding the state fiscal crisis.  A late June poll of 1,001 adults found a majority of respondents saying that states should fix their own budget problems by cutting services or raising taxes,  rather than relying on additional help from the federal government (In the poll, just 26 percent agreed that,”The federal government should give more money to states, even if it increases deficit,” compared to 56 percent who said, “States should take of this, by rising taxes or cutting services). However, when asked about the actual options for balancing state  budgets, solid majorities of Americans said no to everything:

Pew Research/National Journal Congressional Connection Poll, June 2010

The message from the American public couldn’t be clearer: balance the budget, but don’t cut services and don’t raise taxes. With such a strong popular mandate from the voters, is it any wonder that our elected officials are so eager to make the tough political choices?

July 1st marks the start of the new state fiscal year in most of the country – but as glad as state Governors, fiscal directors and legislators will be to see the end of the annus horribilis of 2010,  don’t expect to hear the sound of Champagne bottles being uncorked or bands striking up “Happy Days Are Here Again” to usher in the new year.

As noted in a new report from the Center on Budget and Policy Priorities:

Dismal state revenue collections caused by the severe recession are setting the stage for a new round of state budget cuts as fiscal year 2011 begins in most states on July 1. The states’ cumulative budget shortfalls will likely reach $140 billion in the coming year, the largest shortfall yet in a string of huge annual gaps that date back to the beginning of the recession. Read the rest of this entry »

Each year, the State Board of Equalization meets three times to review and approve projected revenues for the upcoming fiscal year – in December, February and June. At this year’s June meeting, which took place earlier this week, the Board approved a packet that included revised revenue projections that are extremely important for the new fiscal year set to begin July 1st. Read the rest of this entry »