We’ve seen plenty of examples of cuts to our state’s core services in recent years, as well as chronic underfunding that is causing us to fall short of many of our common goals. One of the most dramatic examples is the plight of the state Medical Examiner’s office.

The Medical Examiner is responsible for investigating homicides, suicides, and other violent or suspicious deaths. They also investigate deaths from diseases which may pose a risk to public health. Recent reports have brought to light the extent of our failure to provide this important service and the real human costs.

The Medical Examiner’s Office lost its accreditation in 2009, after inspectors assigned it the lowest score a state agency has ever been given. Dr. Collie Trant, the Chief Medical Examiner at the time, cited a “chronic lack of funding and support for the agency.” He wrote, “The core of our problem is lack of money. A new, state of the art facility has been talked about for years. That is certainly a need, but the immediate crisis is people, training, space, and equipment. The immediate crisis cannot wait on a new building sometime in the future.”

continue reading Getting what we pay for

Last week we reported that next year’s revenues are expected to be 7 percent below their levels of six years ago (FY ’07), even though costs are higher due to inflation, population growth, and increased caseloads

Elsewhere, people seem to have read a different budget estimate than the one we saw. Two elements of the discussion show a growing disconnect between Oklahoma’s budgetary politics and reality.

First, Governor Mary Fallin and many others continue to advocate for reduction or elimination of the state income tax. A closer look at the budget shows that, of the $400 million forecast revenue growth from FY ’11 to FY ’13, fully  half comes from the income tax. Overall, the income tax is expected to provide $2.5 billion next year for General Revenue, the HB 1017 Education Reform Fund, and the ROADS Fund, which has helped restore the worst of our roads and bridges. Cutting this vital revenue support makes no budget sense. It also makes no economic sense.

continue reading Growing disconnect between budget politics and reality

The Office of State Finance today released General Revenue collections for July, the first month of FY ’12. Total collections were $385.0 million, which was $14.9 million, or 4.0 percent above July 2010, and $17.0 million, or 4.6 percent, above the certified estimate for the month. State Finance Director Preston Doerflinger noted:

While there was moderate growth in receipts, collections dipped from the overall double-digit growth rate for FY-2011.

While revenues continue to recover from their sharp decline during the downturn, the recovery remains only partial, as can be seen from this table:

continue reading Up or down?

On Monday, Governor Mary Fallin introduced her FY ’12 Executive Budget (click here for the full budget or here for appropriations total by agency).  Although state revenues have begun to rebound from the recession, the recovery is projected to remain slow and incomplete during the year ahead.  In December, the Board of Equalization certified available revenues of just over $6.1 billion for next year’s budget, which is some $600 million less than what was appropriated in the current budget year. Legislators used some $1.2 billion in non-recurring money from the federal stimulus bill, the state’s Rainy Day Fund, and assorted one-time measures to bring this year’s budget into balance.

In presenting her budget, Governor Fallin tried to strike a balance between a pair of principles and priorities. On the one hand, she insisted that the the budget would be balanced almost entirely through spending cuts and not revenue increases:

continue reading An initial look at Governor Fallin's FY12 Executive Budget

On his first full day on the job, new State Treasurer Ken Miller got to announce relatively good news on the state revenue front. December General Revenue (GR) collections were up 13.0 percent from one year ago and were 4.3 percent above the certified estimate.

As can be seen from this chart, December’s collections represent the largest month-over-month increase since the recovery began:

continue reading Quick Take: Latest revenue figures show progress, but steep climb remains

The State Board of Equalization met yesterday to certify preliminary revenue estimates for the upcoming budget year, FY ’12. These estimates will form the basis for the Governor’s Executive Budget that will be delivered in early February; the Board will meet again in mid-February to provide revised estimates that will be binding on the 2010 Legislature.

The preliminary FY ’12 estimates, developed by the Oklahoma Tax Commission and Office of State Finance, suggest that state revenue collections will continue to recover from their precipitous drop during the economic downturn, but that the recovery will remain slow and incomplete. As we see in the chart below, FY ’12 collections to the General Revenue (GR) Fund are expected to be $5.103 billion. That is an increase of  $500 million, or 10.9 percent, from FY ’10 but some $850 million, or 14 percent, below the pre-downturn peak of FY ’08. Next year’s collections will remain considerably below levels of six years ago, even as the cost of providing services rises due to inflation, population growth, and increased caseloads.

continue reading FY '12 revenue certification: It still adds up to more hard times

Last week I attended the annual State Fiscal Policy conference hosted by the Center for Budget and Policy Priorities, the top non-governmental organization analyzing state fiscal policy across the nation. The message we heard was clear and grim: As rough as the past two years of  revenue shortfalls and budget cuts have been here in Oklahoma and across the states, the upcoming budget year, FY ’12, is going to be even worse.

This chart created by the Center presents the story succinctly:

continue reading State budget outlook: With no more help from Washington, the worst is still yet to come

Note: As the economy continues to struggle and revenue collections remain well below pre-downturn levels, we thought this a good time to repost a blog we first ran in January of this year challenging an argument we continue to hear about the need to just keep cutting public budgets.

Last week I attended the Stand Up for Seniors advocacy forum which focused on the impact the state’s worsening economic and fiscal situation is having on programs serving seniors. State Treasurer Scott Meacham was among the elected officials who addressed the gathering. In laying out the budget challenges we are facing and the limited tools at our disposal for mitigating the severity of budget cuts, Treasurer Meacham shared a conversation he had a couple of months back with a friend who expressed frustration at the inability of state government to operate more like a business. Businesses in the downturn are responding by cutting back, reducing expenses and payroll, and simply doing whatever it takes to get through until the economy recovers. Why, asked his friend, can’t state government just do the same?

The Treasurer’s response, which he echoed in this Oklahoman article,  is worth sharing and elaborating upon, because it gets to the very heart of why the state fiscal crisis is so difficult and why this matters so much. Businesses are driven by supply and demand, and by the obligation to maximize profit for shareholders. To use the proverbial private sector example, if demand for widgets declines in a downturn, then Acme Widget company will produce fewer widgets. This may mean laying people off or even going out of business, which will have an unfortunate impact on employees, their families, and communities.  But there is no obligation on any widget maker to  produce more widgets than can be profitably sold.

continue reading Play it again: Why government can't be run more like a business

The latest revenue collections announced today (PDF) by Treasurer Scott Meacham continue to confirm that while revenues are recovering from their precipitous drop during the worst of the downturn, the recovery is slow and far from complete.

September’s General Revenue (GR) collections totaled $459.7 million, which is $25.9 million, or 6.0 percent, above last year and $7.5 million, or 1.7 percent, above the certified estimate. For the now-completed first quarter of FY ’11, collections are running $74.8 million, or 6.8 percent, ahead of last year, and $45.4 million, or 4.0 percent, above the certified estimate that formed the basis of this year’s appropriations.

As can be seen from the first chart, monthly collections have come in between 5 and 10 percent above the same month for the prior year in four of the past five months. While this shows that a recovery is under way, the gains have been far less than we might hope given the magnitude of the drop between January 2009 and February 2010.

continue reading Quick Take: Revenue collections recovering very slowly

This week OK Policy distributed a 4-page memo on the state budget to all candidates for state offices, which we have now released to a broader audience. The memo is intended to offer policymakers a clearer understanding of the budget situation they will face following the November election, while suggesting some guiding principles and specific recommendations for addressing the challenges that lie ahead. Here are some of the highlights of the memo: (Much of the information is contained in our most recent 2-page Budget Trends and Highlights fact sheet).

We begin by stating that:

The state budget crisis of the  past two years has put great strains on the public structures and institutions that Oklahoma families, businesses, and communities count on to help us meet our common goals as a state. Whoever wins the elections in November will face difficult choices in filling large budget holes and balancing the budget over the next two to three years.

Our overview of the past two years emphasizes the historic drop in state revenue collections and the importance that non-recurring revenues from the federal Recovery Act, state Rainy Day Fund, and other sources have had in mitigating the magnitude of budget shortfalls. However:

Even with these funds… this year’s appropriations of $6.714 billion represent an overall cut of 7.2 percent from FY ’09. Over half of all appropriated state agencies have absorbed funding cuts of at least 15 percent, and some cuts have been multiplied by the loss of matching federal dollars. These cuts have weakened the ability of state agencies and schools to fulfill their core missions and have contributed to a corrosion of the public structures and institutions that Oklahoma rely on to promote our well-being and invest in our future. Across state government, shortfalls have forced agencies to serve fewer Oklahomans in need, eliminate programs,  reduce hours of operation to the public, cut payments to private providers, and lay off or furlough employees.

continue reading This ain't over yet: Outlook and recommondations for navigating the ongoing state fiscal crisis