Have legislators grasped the seriousness of Oklahoma’s budget crisis? (Capitol Updates)

Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

The feeling of crisis continues to permeate the consciousness at the Capitol as revenue figures continues to tumble. When the $900 million shortfall for next fiscal year was announced in December some saw it as an opportunity to both stem the growth of government and make government smaller. Then in February the shortfall grew to $1.3 billion and a revenue failure of 3 percent was declared for the current budget year. Last week an additional 4 percent revenue failure was declared. This means for the last half of the current fiscal year state agency budgets must be cut by a total of 7 percent. Since the cuts will be sustained over half a year, the agencies are in effect receiving a 14 percent cut going forward for the rest of the year. Then they have to brace for an additional $1.3 billion cut beginning July 1. And who knows if all the revenue certified to come in next year will actually be received.

In discussing the situation, Governor Fallin’s Finance Secretary Preston Doerflinger said the governor and the legislative leadership recognize the severity of the situation and are working on solutions. But he says there are still rank and file legislators who have yet to grasp the seriousness of the challenge at hand. If that’s true it’s likely because rank and file legislators haven’t been part of the budget process. The crisis provides the opportunity to invite them back in. Doerflinger says this is a long term problem that will require tough, long term solutions. It’s difficult to get legislators to vote for tough, probably unpopular measures if they haven’t been part of developing the solutions.

One way to demonstrate the severity of the situation is to take a look at the numbers for some of the core agencies. An annualized 7 percent cut will require common education to take a $109 million hit before July 1. The Oklahoma Healthcare authority faces a $63 million cut. Higher Education will be cut $56 million; the Department of Corrections $27 million and the Department of Mental Health $22 million. Even the Department of Public Safety will lose $5 million. This, after losing 20 percent to 25 percent of their budgets over the past 7 or 8 years. This can’t be handled by a few furloughs, early retirements and unfilled vacancies. If the cuts actually come to pass, school children, sick people, college students and many other citizens will see decreases in quality of services.

Occasionally word spreads at the Capitol of what’s being talked about. A percentage of the problem can be handled by moving money around and patching together one-time funding as in the past, but not all of it. Bonds, tax rate increases, tax credit reductions and repeal of some sales tax exemptions are all on the table. No matter what they come up with, there will almost certainly be more budget cuts. I do think the leadership is working hard to get beyond the slogans and deal realistically with the situation. The sooner they can let everyone else in on their thinking the better. You have to allow time for a few false starts to finally get to the solution.