By DAVID BLATT & GENE PERRY
Published: 5/25/2011  1:45 AM
Last Modified: 5/25/2011  2:33 AM

With the latest budget agreement, most state agencies now face a third consecutive year of funding cuts. Almost all agencies will have seen their funding cut by more than 10 percent in this period, and many by more than 20 percent.

Despite reduced budgets, agencies must deal with higher employee health care and retirement costs, general inflation, and, in most cases, caseload growth. With fewer staff and resources, the ability of state agencies to perform their core missions continues to weaken.

For example, public school enrollment rose by 15,000 students between 2008 and 2010, yet next year's appropriation to common education will be 10 percent less than in fiscal 2009. This means fewer teachers and support staff, reduced course offerings and larger class sizes.

Oklahoma prisons are at 96 percent capacity with almost 8,000 more inmates and fewer staff than in 1995, which creates a dangerous situation for corrections officers, inmates and communities.

From 2009 to 2010, calls for police to help the mentally ill increased by 50 percent, and police spent hours transporting mental health patients across the state to find treatment. The Department of Mental Health and Substance Abuse Services has eliminated at least 164 mental health and substance abuse beds. Even before the cuts, Oklahoma was ranked 46th in the nation for mental health services.

Putting together the budget was never going to be an easy task. With revenues only partly recovered from the recession, and with one-time stimulus and "rainy day" fund money mostly exhausted, the state faced a large shortfall.

Leadership deserves credit for attempting to protect our most vulnerable populations by targeting available funds for Medicaid, human services, mental health, and rehabilitative services, as well as ensuring that public safety was spared the full brunt of cuts. 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.

Still, the budget agreement is no cause for celebration. Those who negotiated the budget will say they played the best hand possible given the cards they were dealt. However, this obscures their choice to not play with all the cards in the deck.

The decision to allow another cut in the top income tax rate and not consider serious revenue options, such as eliminating unnecessary tax deductions and exemptions, severely constrained what could be done to limit the magnitude of cuts.

It also meant that the revenue enhancements that were adopted were once again primarily one-time fixes, which won't do anything to address the ongoing budget gap. They will in fact complicate the budget outlook in subsequent years, even assuming the economy continues to recover.

The steady corrosion of our public sector affects all of us. Without more sources of revenue, we will continue to fall short of what is needed to provide our school children and college students a quality education, protect the public health and environment, assist our most vulnerable families, seniors, and persons with disabilities, and administer justice.

We have a choice. We can pay what is needed to tackle public problems today. We can invest in the infrastructure and sound budgeting practices that will make a foundation for future prosperity. Or we can let our problems fester, let our public sector fall apart, and hand off the hard decisions to our children.

The choice is ours.

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David Blatt is director and Gene Perry is policy analyst of the Oklahoma Policy Institute, a state policy think-tank. okpolicy.org