On budget, Oklahoma lawmakers’ rhetoric, reality conflict (The Oklahoman)

By The Oklahoman Editorial Board

THE Republicans who hold a supermajority in the Legislature often claim they want to reduce the size of government. When they announced the latest state budget, legislative leaders declared it reduced spending by $102.1 million. Here’s the problem: That “cut” is mostly an accounting fiction.

In a recent blog post, David Blatt, a state budget expert who runs the Oklahoma Policy Institute, notes that the budget-savings claim touted by legislators “doesn’t quite hold up …”

The appropriation measures approved by lawmakers in the recently concluded session included funding for the coming budget year (fiscal year 2015) and “supplemental” funding for agencies in the current budget year (fiscal 2014), which ends June 30. In all, lawmakers voted to spend $110.1 million on 2014 supplemental appropriations.

“A supplemental is usually made during the session to address a hole in an agency’s current year budget that requires immediate funding,” Blatt notes. Yet when he reviewed this year’s supplemental appropriations, only $38.5 million of the total fit the definition. The remaining $71.6 million involved “ongoing or one-time funding that appear to address funding needs for next year.”

In a nutshell, legislators placed 2015 spending on the 2014 books to create 2015 “savings” that exist only on paper.

OK Policy is a liberal think tank, but similar remarks have been made by Republicans, including state Treasurer Ken Miller and Rep. David Dank, R-Oklahoma City. Blatt notes the $47.7 million supplemental appropriated to the Oklahoma Health Care Authority to reduce provider rate cuts is “exactly equal to what is supposedly being cut from the agency in FY 2015.” A similar gimmick was used to mask spending in the Oklahoma House of Representatives’ budget, which we’ve previously noted.

In another instance, lawmakers actually acknowledged the accounting gimmick in writing: “In the case of a $718,620 appropriation to the Ethics Commission that was also labeled a FY 2014 supplemental, the Legislature even passed a follow-up bill specifying that the funding would only be made available at the start of FY 2015,” Blatt wrote.

If lawmakers honestly accounted for all 2015 state budget spending by placing it on the books for 2015, Blatt said, there would be virtually no reduction in government spending — even though lawmakers technically had $188 million less to spend.

Total FY 2015 appropriations are $7.193 billion, which is nearly unchanged from last year’s $7.197 billion budget, Blatt said. “A flat budget may not play as well on the election mailers for certain legislators as a 1.4 percent cut, but it better reflects what happened.”

Blatt also identifies another questionable budget maneuver: Most state agencies’ appropriations primarily come from next year’s General Revenue Fund collections. If those collections fall more than 5 percent below estimates, a revenue shortfall is declared and each agency’s appropriation is cut by a corresponding amount.

But when an agency’s appropriation comes from other funds — including prior year general revenue — Blatt notes those funds aren’t reduced during a shortfall. Guess whose budget falls into the latter category? Blatt points out the Legislature’s funding comes “entirely from prior year General Revenue and is thus shielded from potential cuts.” Only one other state entity (the Space Development Industrial Authority, believe it or not) was given the same treatment.

Blatt’s analysis provides an important public service. Not only does he expose the gap between lawmakers’ budget-cutting rhetoric and reality, but he also highlights their tendency to exempt themselves on those occasions when spending cuts are not accounting gimmicks.



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