Revenue Failure, What's That?
A revenue failure occurs when collections going to the General Revenue Fund (link) fall below 95 percent of the certified estimate (see revenue estimates). The Director of the Office of Management and Enterprise Services declares a revenue failure and reduces funds going to agencies by however much is necessary to bring spending into balance with revenue collections. The Oklahoma Constitution specifies that in the event of a revenue failure, each appropriated agency must be cut in equal proportion to their share of total appropriations from the General Revenue Fund.
There have been four revenue failures since 2000, in budget years 2002, 2003, 2009, and 2010. The budget year 2009 cuts were later restored.
When a revenue failure is declared, the Legislature can use up to 3/8ths of the Rainy Day Fund to prevent budget cuts. The Rainy Day Fund was tapped to address mid-year shortfalls in budget years 2003 and 2010.