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 »

Last month I gave a presentation to a meeting of the State Chamber of Commerce along with a representative from another state policy organization.  I was struck, and frankly dismayed, by the extent to which my co-presenter  spoke as if government and the private sector were opposing forces pitted against one another in a  zero-sum competition. In this view, taxes assessed on businesses and households extract dollars away from productive consumption and investment in the private sector in order to “grow government”.

It is certainly true that a vibrant private sector will always be the main engine of economic growth in a capitalist economy. Public spending can at times crowd out private investment, although, as economists like Brad DeLong argue, during times of sluggish economic growth like the present,  government spending can be vital for keeping the economy from grinding to a halt and for incentivizing private investment. But more fundamentally, this polarizing conception of “government versus the private sector” misses the important ways in which businesses, as well as families and communities, cannot thrive without a strong and effective public sector. You cannot have a vibrant, productive private sector without state and local government helping to: 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 »

For many state agencies, the first rounds of budget cuts over the past two years could be managed without greatly affecting key programs and services for the public. But as funding cuts go deeper and last longer, often a tipping point is reached where agencies are no longer able to simply tighten their belts but must abandon core aspects of their mission.

The state’s public television network, OETA, which plays a distinct role in covering public affairs and chronicling the lives of Oklahoma communities, has apparently reached such a tipping point. According to a recent article in the Journal Record (subscription only), the network will not be renewing the contracts of the studio staff of the Oklahoma News Report – anchors Gerry Bonds and George Tomek and meteorologist Ross Dixon -  for the upcoming year. All three were contract employees paid for by donations to the OETA Foundation. While the nightly news broadcast will continue to air, staffing reductions, increased workloads, and funding cuts will mean the end of new episodes of several locally-produced programs – Tulsa Times, Oklahoma City Metro and State of Creativity – that shed a spotlight on notable Oklahomans and current affairs. In addition, the agency has enacted a strict hiring freeze and will no longer offer weather broadcasts.

Over the past two years, state appropriations for OETA have been cut by 19.1 percent, from $5.2 million in FY ‘09 (excluding one-time capital funding) to $4.2 million for next year. As we showed in our FY ‘11 Budget Highlights, half of all appropriated agencies have seen state funding cut by 15 percent or more during this period. With one-fifth of this year’s budget being funded with non-recurring revenues, the chances for any quick or substantial improvement in the budget outlook for OETA or most any other agency are slim.

Despite the cuts, OETA will continue to operate, but with fewer staff shouldering greater workloads and responsibilities, and with fewer programs that are able to tell of the lives and deeds of the ordinary and extraordinary Oklahomans who make up the fabric of this state. Their loss of funding is our loss as well.

The state’s deep and prolonged budget crisis has taken a serious toll on public services in Oklahoma.  We have seen rate cuts to providers of community-based health services, elimination of violence prevention programs for at-risk youth, closures of facilities for persons with mental health and addiction problems, and layoffs of hundreds of teachers and public employees, to cite just a few examples (see our updated compilation of state and local cuts). Overall, as we laid out in our FY ‘11 Budget Highlights fact sheet, state appropriations have been cut by almost $400 million, or 7.2 percent, compared to FY ‘09, and more than half of all appropriated state agencies must absorb state funding cuts of at least 15 percent.

Yet the impact of the downturn would have been genuinely catastrophic had Congress not provided substantial fiscal relief to the states as part of last year’s stimulus bill.  Formally known as the American Recovery and Reinvestment Act,  the stimulus bill provided states money in two basic forms – a State Fiscal Stabilization Fund, intended primarily for common and post-secondary education, and enhanced federal matching funds for Medicaid. Over the past two years, the Legislature approved the use of $1.375 billion in stimulus funds, allocated as follows:

Read the rest of this entry »

As the dust settles on the 2010 legislative session that adjourned on May 28th, we’ve now released a detailed summary of the major highlights of the state budget for the upcoming year.  Our fact sheet includes a set of seven tables and charts, including this one, which compares total state appropriations over the past twelve years:

Read the rest of this entry »

From time to time, we use the OK Policy blog to post contributions that offer interesting perspectives on important policy issues for the state. Michael Lipsky is a Distinguished Senior Fellow at Demos, a non-partisan public policy research and advocacy organization. An expanded 30th Anniversary edition of Michael’s book, Street Level Bureaucracy, will be published this month. This post originally ran on the Demos blog, ideasactionblog.org

The first week in May was Public Service Recognition Week. Although the week in principle is dedicated to all public service workers, most of the attention went to the civilian federal workers who number two million throughout the country and overseas.

But there are other public service workers who deserve more than passing recognition: the 15 million men and women who work in state, county and municipal governments around the country. Read the rest of this entry »