Another year, another budget hole for lawmakers to address (Associated Press)

By Tim Talley

OKLAHOMA CITY (AP) – Oklahoma budget writers are bracing for yet another gaping hole to work around for the upcoming fiscal year – the third consecutive year with a significant shortfall.

Officials estimate a $600 million deficit for the budget that’ll pay for public safety, health care and infrastructure starting July 1.

The 2017 fiscal year deficit, as well as last year’s $1.3 billion shortfall and $611 million one the year before, are all due to lower revenue from oil and natural gas production and the impact of various tax cuts and deductions.

Lawmakers have tapped agency revolving accounts, such as the state’s Rainy Day reserve fund, as well as other one-time sources of money to help balance budgets and avoid deeper cuts. Appropriations leaders say similar steps will be needed for legislators in the 2017 session, which begins in January, to balance the next state budget.

“We do expect another tough year of having cuts. I hope it’s the last,” said Sen. Kim David, R-Porter, chair of the Senate Appropriations Committee. “I’m optimistic that the economy is going to turn around.”

The current $6.8 billion state budget is $896 million – or 15.1 percent – below the state’s budget in 2009 when adjusted for inflation, according to the Oklahoma Policy Institute, a Tulsa-based think tank that supports additional funding for state services. More than half of all appropriated agencies have had their budgets slashed by at least 20 percent during that period.

“There are a lot of things that are contributing to a structural budget deficit,” said David Blatt, the institute’s president and a critic of some of Oklahoma’s tax subsidies for businesses and industries. “Even when oil prices recover, we’re going to continue to face problems if we don’t fix the chronic budget deficit.”

Republican Rep. Leslie Osborne, who heads of the House Appropriations Committee, said years of shortfalls will likely force lawmakers to find new sources of money to pay for spending proposals that are part of the GOP’s 2017 agenda – including pay raises for teachers and many state workers, who have not had a pay raise since 2007.

“We’re looking at the best way to do a pay raise,” she said.

Lawmakers again will be asked to consider capping or eliminating many tax credits – including the one for electricity generated by zero-emission facilities.

“We truly are trying to take a measured approach,” Osborn said, adding that lawmakers will be asked to look for long-term solutions instead of relying on stop-gap measures.

State Treasurer Ken Miller said many GOP legislators are reluctant to admit the state has a revenue problem. But resorting to one-time sources of revenue to fill chronically occurring budget shortfalls are “actions that speak louder than words,” he said.

The Republican, who used to lead the House Appropriations Committee, has suggested reining in tax credits and broadening the state’s tax base to include retail and other services.

“You don’t have enough recurring revenue to meet your spending needs,” he said. “Every now and then you have to face reality.”

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