A couple of the notable charts are excerpted below.

The state’s annual appropriated budget for FY ’12 is $6.511 billion. This is the third straight year of decreased funding for state agencies; total appropriations for next year will be $250 million less than in FY ’07.Of total appropriations, 89.2 percent, or $5.811 billion, will go to the ten largest agencies in the core areas of education, health care, human services, public safety and corrections, with all the remaining appropriated agencies – 68 of them -  dividing up the remaining 10.8 percent ($699 million). This pattern of roughly 9 out of 10 appropriated dollars going to the ten largest agencies is long-standing and consistent; last year, as we showed here, the ten largest agencies received 89.5 percent of state funding.Click here for a table comparing the share of the total budget for each of the top agencies the past two years.

Our message on this year’s budget has been laid out in this blog post and this op-ed.  In short:

The agreement shows that legislative leaders and the Governor worked to minimize the damage, especially where cuts in state funding would have entailed a corresponding loss of federal matching funds…  However, this agreement is not cause for celebration. State agencies are now facing a third consecutive year of funding reductions and budget cuts, which will continue to corrode their ability to perform their core missions…. This outcome was not inevitable. Those who negotiated the budget will say they played the best hand possible given the cards they were dealt. However, we must recognize that a choice was made not to play with all the cards in the deck. Their decisions not to put serious revenue options on the table and to allow a cut in the top income tax rate to take effect seriously constrained what could be done to limit the magnitude of funding cuts.

We hope you will take a look at the FY ’12 Budget Highlights and share copies with others who may find it of interest. You can also click here for all our latest budget fact sheets and issue briefs, here for our budget blog posts, and here for our comprehensive Online Budget Guide.

share this post

State revenue collections in March topped prior year collections for the first time since December 2008 and the official estimate for a second consecutive month, State Treasurer Scott Meacham announced today.

Collections beat the official estimate by an impressive $81.4 million, or 25.5 percent. For the third quarter of FY ’10, collections fell short of the estimate by just 2.4 percent; by comparison, for the second quarter, revenues were more than 27 percent below the estimate.

Compared to the same month in 2009, collections in March were $6.4 million, or 1.6 percent, higher. The chart below, which we have been using in recent months to put this year’s collections in a longer-term perspective,  reveals the extent to which March marks a sharp and decisive upturn in revenues. The month’s collections were back to just over 90 percent of the average collection for the same month over the past five years.  In each of the previous nine months, collections remained mired below 85 percent of their five-year average.

The upturn is important in several respects. Improving gross production and personal income tax collections indicate the economic recovery is taking hold in the state, as the Treasurer noted in his press release and a media availability I attended. The rebound will help the state repay funds that were borrowed in prior months to keep the budget balanced and ensure that deeper cuts to this year’s budget, beyond those already agreed to and implemented, will be unnecessary.  It also gives policymakers some confidence that the worst is truly over and that they have less need to safeguard against a recurrence of this year, when revenue estimates proved overly optimistic and agencies were forced to absorb repeated cuts once the new fiscal year began. This could factor into decisions about whether to use the full amount left in the Rainy Day Fund ($374 million) to shore up next year’s budget, rather than leaving a portion in reserve for FY’11 and FY ’12.

However, it must be emphasized that regardless of how strongly revenues recover during these latter months of FY ’10, it has no bearing on the amount of revenue that is available to the Legislature for appropriation in FY ’11. The final, binding revenue estimate was certified by the Board of Equalization in February.  There is no authority and no opportunity to recast the die and alter that certification based on economic conditions or economic projections.

However, changes to revenue-related laws approved by the Legislature during session can lead to a revised certification. This means that the various revenue enhancements that Governor Henry proposed in his FY ’11 budget, or those that OK Policy has recommended as worthy of consideration in our just-released issue brief, could still be used to mitigate the extent of next year’s budget cuts.  The Treasurer noted again today that without these additional revenues, no agency will be spared double-digit cuts and these will affect Oklahomans in profound ways.  Even if the improving fiscal landscape is encouraging, the progress is too little and too late to spare the Legislature the really hard decisions in the weeks ahead.

share this post